Briefings
Brands and Rights: 10 things you need to know about the Enterprise Act
Directors, Shareholders & Owner Managers
Intellectual Property
Mergers and Acquisitions
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| June 2003 |
MdR's HOT 10
- Came into force 20 June 2003
- OFT investigatory powers strengthened
- Cartels criminalised
- Directors disqualification for up to 15 years for competition law breaches
- Scope of competition law damages widened
- Merger referral changes
- Introduction of market investigation references
- Introduces Super-complaints by consumer bodies
- Consumer law enforcement strengthened
- Two stage scheme for the approval of Business Codes
Came into force on Friday 20 June 2003
These provisions apply now and need to be immediately addressed.
OFT investigatory powers strengthened
Greater powers to investigate companies and other bodies suspected of breaching certain provisions of the Competition Act 1998 ("CA'98") including the right to require the supply of information, obtain search warrants, visit premises and take copies of papers and electronic documents.
Cartels Criminalised
A new criminal offence with a maximum of 5 years' imprisonment or unlimited fine will be introduced for individuals dishonestly participating in the most serious types of cartel agreements, such as those relating to price fixing, bid-rigging, market sharing and agreements to limit production or supply
Directors Disqualification
OFT and sector regulators can apply to the court for a Competition Disqualification Order (CDO), disqualifying someone from being a company director for up to 15 years if it considers that the director's behaviour contributed to a company's breach of the CA'98.
Competition damages
Extends scope for damages claims, enabling third parties or consumer bodies to apply for compensation on behalf of named individual consumers who suffer as a result of a breach of certain provisions of the CA'98.
Mergers
The OFT, rather than the Secretary for Trade and Industry, will now decide whether to clear a merger or refer it to the Competition Commission. Mergers that qualify for scrutiny by the OFT will be those where either the UK turnover of the target is above £70 million or those where the combined enterprise supplies 25% or more of a particular good or service within a substantial part of the UK.
Market investigation references
The OFT and certain regulators can refer markets to the Competition Commission for a public investigation where a feature of a market prevents, restricts or distorts competition.
Super-complaints
Consumer bodies (such as Which?) will be able to complain about market features that harm consumers.
Enforcement of Consumer Laws
There will be a single enforcement regime under which the OFT and other bodies will be able to seek court orders where there is evidence of a breach of certain consumer laws.
Two stage scheme for the approval of Business Codes
Stage 1: A code sponsor (e.g. a trade association) promises that its code meets the OFT's core criteria.
Stage 2:The sponsor must demonstrate that such code is working well in practice.
On passing the second stage, codes can use and display the OFT 'approved code' logo to increase confidence. A codes website will eventually be set up.