Block Exemption

Section 6 of the Competition Act 1998 allows a category of agreement to be exempted wholesale from the Chapter I prohibition. If agreements which fall within a particular category are, in the opinion of the CMA, likely to be exempt agreements, the CMA may recommend that the Secretary of State make a 'block exemption order' specifying that category. An agreement which falls within a category specified in a block exemption order is exempt from the Chapter I prohibition, and the exemption itself is referred to in the Act as a 'block exemption'.

A block exemption is not unconditional: a block exemption order may impose conditions or obligations subject to which a block exemption is to have effect, and the order may provide that breach of a condition cancels the exemption automatically, that the CMA may cancel it by written notice for failure to comply with an obligation, or that the CMA may cancel it where it considers a particular agreement is not in fact an exempt agreement. An order may also be time-limited, ceasing to have effect at the end of a specified period.