Tackling anti-competitive practices
Businesses and consumers will find it easier to challenge firms they believe are acting anti-competitively, under proposals contained in a new consultation published by the Department for Business, Innovation and Skills.
The proposals for facilitating ‘private actions’ have two key aims:
* To increase growth, by empowering small businesses to tackle anti-competitive behaviour that is stifling their business.
* To promote fairness, by enabling consumers and businesses to obtain redress for losses they have suffered due to anti-competitive behaviour.
While lawyers believe private actions could be critical to challenging anti-competitive behaviour, research by the Office of Fair Trading (OFT) shows that business experience sees this as one of the less effective aspects of the current UK competition regime.
Private actions can also be complex and costly for individuals and small to medium enterprises (SMEs), and they are often reliant on their case being prioritised for OFT investigation.
Although the total damage caused by anti-competitive behaviour may be very large, the individual loss for each business or consumer harmed is often small, making the expense of going to court impractical. This can mean that even when the perpetrators of a price-fixing scandal are caught, consumers and businesses may still lose out.
The specific proposals in the new consultation will make it easier to challenge anti-competitive behaviour through private-sector led challenges by:
* Allowing the Competition Appeal Tribunal to hear more kinds of competition cases and granting it additional powers to allow SMEs to quickly and cheaply challenge behaviour that is restricting their ability to grow.
* Introducing an opt-out collective actions regime for competition law, which would enable consumers and businesses to collectively bring a case to obtain redress for shared losses.
* Promoting Alternative Dispute Resolution to ensure that the courts are the option of last resort.
* Ensuring private actions complement the public enforcement regime, in particular by protecting the incentives provided for companies to whistle-blow on cartels.
Views are sought by 24th July.
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