View this page on Reckon Online

Reckon home page

Enterprise Act 2002

Amongst many other things, the Enterprise Act 2002 makes the Competition Commission determinative in merger cases and in market investigations (which replace complex monopoly investigations), and changes the substantive question for these investigations away from whether the specified matters operate, or might operate, against the public interest, to one of the following tests:

Other reforms to the competition regime related to procedures for the enforcement of competition law, discussed below (and subsequently further modified as a result of Council Regulation 1/2003).

The full text of the Enterprise Act 2002 is available in HTML chunks from the HMSO/OPSI website at:

http://www.opsi.gov.uk/acts/acts2002/20020040.htm

The Enterprise Act 2002 was amended by the Communications Act 2003 as regards its application to the media sector.

Enforcement of competition law

Section 16 provides a power (as yet not exercised) to give the Competition Appeal Tribunal jurisdiction to hear private court proceedings insofar as they relate to a competition law infringement issue.

Sections 17 to 20 amend the process for enforcement of the Competition Act 1998, Article 81 and Article 82:

Individual claims for damages following infringement decisions have been instituted in relation to the vitamins cartel (two cases) and the Genzyme abuse (one case). All these claims have been settled out of court without a substantive judgment from the Tribunal.

One representative claim for damages has been threatened by Which? in February 2007 following the football shirts infringement.

Section 12 also replaced the former "Competition Commission Appeal Tribunal" with the Competition Appeal Tribunal, making its separation from the Competition Commission clear (and some applications for judicial review of Competition Commission decisions are now heard by CAT).

Section 188 creates a new criminal offence for dishonest participation in some cartels (subject to a complex definition which is presumably not intended to capture all instances of dishonest participation in an infringement of Article 81 or the equivalent Competition Act 1998 prohibition). Criminal sanctions for cartels were presented as new when the Enterprise Act 2002 was introduced, but the English High Court has held in January 2007 (in an extradition case, and presumably subject to appeal) that price-fixing also falls within the ambit of the common law offence of conspiracy to defraud.

Merger inquiries

Sections 35 to 41 set out the general process for merger control, excluding special regimes such as the one applicable to mergers of water undertakers.

The Commission must decide whether there is a qualifying merger (implemented or in contemplation). Usually the OFT's findings will be sufficient to establish that this is the case. Special rules apply to GB passenger rail franchise awards.

If there is a qualifying merger, the Commission must decide whether the merger "may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services".

If so, it must decide what, if any, action to take or to recommend for others to take, "for the purpose of remedying, mitigating or preventing the substantial lessening of competition concerned or any adverse effect which may be expected to result from the substantial lessening of competition".

The Commission has a duty to remedy, mitigate or prevent the substantial lessening of competition or any adverse effect which may be expected to result from it. In setting or recommending remedies, it:

See also

This page is managed by Reckon LLP. Users are encouraged to contribute relevant views and links. Use the "Edit this page" or "Add a comment" button above to edit the text or to add comments and notes. Advice on making contributions (including trackback) is in the Guidelines.

Last changed by Shankar at 1:49 PM on Monday 23 July 2007.

Reference for this page:
Reckon Open "Enterprise Act 2002" 2007-07-23T13:49:25
Link within Reckon Open: [[Enterprise Act 2002]]