Competition Law Breaches

Most local clients know they cannot reach agreements with competitors about the prices they will charge to customers. This is a serious breach of the Competition Act 1998 and could land them in jail. However, not all are aware that acting alone they could also breach the competition rules if they are in a local ‘dominant market position’. In May, the Office of Fair Trading provisionally found that the council-owned Cardiff Bus Company engaged in predatory behaviour designed to eliminate a competitor.

Roger Hann says “The company deliberately made a loss after another bus company, 2Travel plc, entered the market. Cardiff Bus is accused of providing a new ‘no-frills’ bus service which operated below cost and was withdrawn once 2Travel left the market. The OFT found that the Cardiff Bus Company, which carries an estimated 80,000 people each weekday in Cardiff, used its dominant position to run its ‘no-frills’ services with revenues so far below costs that it was impossible for its competitor to remain in the market. If you are concerned about conduct of another company or indeed that of your own business, call us for advice on competition law.

In another case in May, the OFT announced it was carrying out a number of on-site searches as part of a criminal investigation into suspected cartel conduct in relation to the market for marine hoses used to transfer oil. Searches were carried out at two addresses in the UK, one of which was a home address. This is the first time that the OFT has carried out a search at a home address as part of a cartel investigation. The allegations under investigation relate to a possible worldwide conspiracy between executives of a number of companies to rig bids, fix prices and allocate markets in the supply of marine hoses. Marine hoses are typically used by customers in the oil and defence industries to transport oil between tankers and storage facilities. The suspected cartel may have affected contracts worth hundreds of millions of pounds. The OFT's criminal investigation has been coordinated with investigations by the US Department of Justice and the European Commission. The OFT's investigation is being carried out under the Enterprise Act.

We can fully advise you on competition law and put in place for you a competition law compliance programme.

Call Roger on 01329 822333 for further information.