Proposed changes to competition law announced

Competition is one of the drivers of growth in a healthy economy, but too often small businesses get the raw end of the deal by being taken advantage of by larger businesses. Now, the government is proposing to make changes to make it easier to take action against other businesses acting in an anti-competitive way. Currently, when a business fixes prices, imposes unfair trading terms or carries out other types of behaviour that distort competition, other businesses that have been harmed as a result often find it difficult and costly to go to court and seek remedies. Now the government has announced changes that will make it easier for small and medium-sized businesses when they do have a dispute, making sure that the problem is resolved quickly and fairly, and which will help them get any money they’re owed back. Under new proposals announced at the end of January, it will be simpler for individuals and other business to take collective legal action against anti-competitive companies and a proposed fast-track through the courts should help small businesses fight anti-competitive practices that stifle their growth. The changes include : Making the Competition Appeal Tribunal (CAT) the main court for competition actions in the UK, including a fast track option for other businesses. This will allow it to hear more cases and swiftly resolve disputes for consumers and businesses. Introducing a new opt-out collective actions regime for competition law. Appropriate representative bodies will be able to take a group or collective action in court, and groups of consumers or businesses will automatically be included in the action. If they don’t want to be part of the claim they will have to opt-out. This comes after consumer group Which? highlighted that, in systemic cases of mis-selling, a collective action can offer a better resolution. Promoting Alternative Dispute Resolution (ADR), to make sure that wherever possible any disputes are resolved without getting to court stage, saving time and money for those involved by avoiding lengthy cases and legal fees. As part of this, businesses that have had claims made against them will be able to propose collective settlements to the CAT, allowing them to nip the issue in the bud quickly and with reduced costs. To illustrate how a business might take advantage of these changes, the government has given the example of a medium-sized garage suffering losses because of a supplier abusing its position by withholding spare parts to drive up prices. In this instance, the car garage could put the case to the CAT. If it appeared that prolonging the situation would bankrupt the garage, the CAT could act quickly and fast-track the case to provide an injunction, resulting in the supplier having to restart their supply. Businesses accused of anti-competitive behaviour will have several safeguards, including making sure that if they lose the case they only pay back what was lost by the consumer or other business and don’t face excessive costs. The changes were announced in response to the consultation on ‘Private Actions in Competition Law’, which proposed improving the way the UK helps individuals or businesses challenge anti-competitive practices in court.
Competition is one of the drivers of growth in a healthy economy, but too often small businesses get the raw end of the deal by being taken advantage of by larger businesses. Read about changes