UK Antitrust Law: Competition Act 1998 Explained

What this document is

Antitrust law, known in the UK more commonly as competition law, is the body of rules that prevents businesses from distorting the market to the detriment of customers and rivals. It covers agreements that restrict competition, conduct by powerful firms that shuts out smaller competitors, and mergers that concentrate market power too heavily.

The main statute is the Competition Act 1998, which contains two key prohibitions usually referred to as the Chapter I prohibition (anti-competitive agreements) and the Chapter II prohibition (abuse of a dominant position). The Enterprise Act 2002 adds a criminal offence for individuals who dishonestly take part in hardcore cartel conduct, and it also governs the merger control regime.

Since the UK left the European Union, domestic competition law stands on its own feet, although the underlying principles remain closely aligned with the approach taken across Europe. Enforcement falls mainly to the Competition and Markets Authority (CMA), with sector regulators such as Ofcom, Ofgem, and the FCA holding concurrent powers in their own industries.

How to use this document

1. Identify whether competition law is in play. Look at the situation honestly. Are you discussing prices, customers, or territories with a competitor? Are you the largest player in a defined market? Are you imposing restrictions on distributors or retailers? If the answer to any of these is yes, competition law is likely relevant and worth thinking through carefully before acting.
2. Assess the risk category. Some conduct is treated as seriously harmful by default, such as price fixing, market sharing, bid rigging, and output restrictions between competitors. Other arrangements, such as exclusive distribution or selective retail networks, may be lawful depending on market shares and the wider commercial context. Understanding which category applies shapes everything that follows.
3. Check market position and commercial rationale. If your business holds a strong market position, conduct that would be unremarkable for a smaller firm can become problematic. Pricing below cost, loyalty rebates, refusals to supply, and tying products together can all attract scrutiny. Document the commercial reasons behind decisions so you can demonstrate legitimate business justifications later if needed.
4. Put a compliance framework in place. Practical compliance often matters more than paper policies. Train staff who deal with competitors or customers on what they can and cannot say, review standard contracts for problem clauses, and make sure there is a clear route for employees to raise concerns internally. A visible compliance culture can also reduce penalties if something does go wrong.
5. Take early advice if an issue emerges. If you receive a CMA enquiry, suspect your business may have been involved in something problematic, or see signs of anti-competitive behaviour by others affecting your trade, act quickly. Leniency is available for the first cartel participant to come forward, and early input from someone with competition experience can change the outcome significantly.

Common questions