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Competition: Good for business

Competition: Good for business

Sally Johnson, Practising Consultant, explains how competition law is relevant to businesses of all sizes.

Do you think the competition regulator is only interested in large, dominant businesses?  Not true.

The CMA (Competition and Markets Authority) has announced it is asking 120 law firms in Yorkshire and Humberside to help make sure their small and medium sized business clients are better informed about competition regulations.

A 2015 survey asked businesses with 10-250 employees about their awareness of illegal unfair trading and anti-competitive business practices. In the Yorkshire and Humberside region:

  • Only 29% of those surveyed knew that setting the price at which others can resell your product is illegal and only 53% knew that bid-rigging is illegal.
  • Under 20% were aware of the rewards and immunities when reporting anti-competitive collusion (‘cartel’) activity.
  • Over 40% were unaware of the possibility of imprisonment for some anti-competitive behaviour.
  • Only 41% knew that dominant firms are under a special responsibility not to allow their conduct to impair competition.

The survey concluded that most businesses want to do the right thing.  Businesses agreed activity like bid rigging and price fixing are not good for the consumer, and in the end that is not good for business. Many were surprised that agreeing with a competitor not to compete (‘market sharing’) or sharing sensitive price information could be illegal. But they complained that in the guidance on the CMA’s website about where to draw the line, there is too much jargon and too much complexity even in the so-called “quick guides”.

The CMA has asked local lawyers in Yorkshire and Humberside to help out, by drawing the available CMA information to their clients’ attention and being available to help explain it.

Smaller businesses, wherever based, could benefit from some clarity. The CMA materials link can be found here and if you would like to know more, please contact us and let us know what you find confusing, and we will provide some examples in plain English of what is permissible and what is not.

For more information on how Competition Law might affect your business, please contact Sally Johnson on 01228 552207 or sj@burnetts.co.uk.

About the author

Sally Johnson profile photo

Sally Johnson

Sally is a Practicing Consultant in the Dispute Resolution team at Burnetts.

Published: Friday 19th August 2016
Categorised: Corporate Law, Commercial Dispute Resolution, Legal Services in Newcastle, Regulatory, Small Business / New Business

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