Last amended by Digital Markets, Competition and Consumers Act 2024 in 2024. Enhanced CMA powers and introduced the strategic market status regime for digital firms.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
The Competition Act 1998 is the primary UK statute prohibiting anti-competitive agreements and abuse of a dominant position. Modelled closely on Articles 101 and 102 of the Treaty on the Functioning of the European Union, it introduced the 'Chapter I prohibition' against agreements that prevent, restrict or distort competition, and the 'Chapter II prohibition' against abuse of a dominant market position. The Competition and Markets Authority (CMA) enforces the Act with power to impose fines of up to 10% of worldwide turnover.
Key Points
- Chapter I prohibition — anti-competitive agreements, decisions, and concerted practices (s.2)
- Chapter II prohibition — abuse of a dominant position in a market (s.18)
- Individual exemptions available if agreements improve production/distribution and benefit consumers (s.9)
- Block exemptions may be granted by the Secretary of State (s.6–s.8)
- CMA has power to investigate and impose penalties of up to 10% of worldwide turnover (s.36)
- Private actions — persons harmed may seek damages in the Competition Appeal Tribunal
- Leniency regime incentivises cartel members to self-report in exchange for reduced penalties
- Chapter I prohibition: agreements that prevent, restrict, or distort competition (s.2)
- Chapter II prohibition: abuse of a dominant market position (s.18)
- CMA can impose fines of up to 10% of worldwide turnover
- Leniency programme for cartel whistleblowers
- Private actions for damages before the Competition Appeal Tribunal
- Exemptions available where agreements meet efficiency criteria (s.9)
Parts & Sections
Amendments History
2002 — Enterprise Act 2002
Created the Office of Fair Trading (later CMA), introduced criminal cartel offence, and reformed merger control regime.
2013 — Enterprise and Regulatory Reform Act 2013
Abolished OFT and Competition Commission, replacing them with the Competition and Markets Authority (CMA).
2002 — Enterprise Act 2002
Created the OFT (now CMA) and introduced the criminal cartel offence.
2024 — Digital Markets, Competition and Consumers Act 2024
Enhanced CMA powers and introduced the strategic market status regime for digital firms.
Frequently asked questions
- What is the main purpose of the Competition Act 1998?
- The Competition Act 1998 is the primary UK statute prohibiting anti-competitive behaviour. It introduces two main prohibitions: the Chapter I prohibition against agreements that prevent, restrict, or distort competition, and the Chapter II prohibition against the abuse of a dominant market position. The Act is modelled closely on Articles 101 and 102 of the Treaty on the Functioning of the European Union.
- Who enforces the Competition Act 1998 and what penalties can they impose?
- The Competition and Markets Authority (CMA) enforces the Act and has the power to investigate infringements. If an undertaking intentionally or negligently commits an infringement of the Chapter I or Chapter II prohibition, the CMA may require it to pay a penalty of up to 10% of its worldwide turnover. The CMA replaced the Office of Fair Trading and Competition Commission following the Enterprise and Regulatory Reform Act 2013.
- Are there any exemptions for agreements that might restrict competition?
- An agreement is exempt from the Chapter I prohibition if it contributes to improving production or distribution, or to promoting technical or economic progress. Crucially, the agreement must allow consumers a fair share of the resulting benefit. Additionally, the Secretary of State may grant block exemptions for certain types of agreements under specific sections of the Act.
- Can I claim compensation if I have been harmed by anti-competitive practices?
- Yes, individuals or businesses harmed by anti-competitive behaviour may seek damages through private actions. These claims are brought before the Competition Appeal Tribunal. The Act also includes a leniency regime that incentivises cartel members to self-report their involvement in exchange for reduced penalties.
- What does the Chapter II prohibition cover regarding dominant market positions?
- The Chapter II prohibition makes it illegal for one or more undertakings to abuse a dominant position in a market. This conduct is prohibited if it may affect trade within the UK. The CMA can investigate such behaviour and impose fines of up to 10% of the undertaking's worldwide turnover if an infringement is found.