Civil Engineering Reference
In-Depth Information
Chapter 21
Regulatory Matters
CompetitioninConstruction
21.1 Competition law in the UK: Introduction
Competition law has become a very important issue for businesses operating in the
UK construction industry. Until April 2014, competition law in the UK was enforced
by the Office of Fair Trading (OFT) and it regarded the UK construction industry
as a priority area for enforcement. Even though the OFT's enforcement functions
transferred to a new Competition and Markets Authority (CMA) in April 2014, it
is expected that the CMA will continue to pay close attention to the UK construction
industry contractors and members of the supply chain must therefore ensure that they
know and conduct their activities in accordance with the competition rules. In this
chapter, we give a practical overview of anti-competitive agreements and the types
of behaviour which breach the Competition Act 1998. We also consider the penalties
forbreachingcompetitionlaw(whichincludescriminalsanctionsforindividuals)and
the OFT's leniency regime.
21.2 Competition law: Overview
he main competition legislation in the UK is the Competition Act 1998 (henceforth
'the 1998 Act'). The 1998 Act sets out two prohibitions, namely:
•
the prohibition of anti-competitive agreements (the Chapter I prohibition); and
•
the prohibition of abuse of a dominant position (the Chapter II prohibition).
These prohibitions are modelled on their EU counterparts, Articles 101 and 102 of
the EC Treaty. While EU competition law applies in parallel to the domestic compe-
tition regime, this chapter will focus on the UK prohibitions under the 1998 Act. The
Chapter I and Chapter II prohibitions are discussed in more detail below.
The 1998 Act is supplemented by the cartel provisions contained in sections
188-202 of the Enterprise Act 2002 (henceforth 'the 2002 Act'). Section 188 intro-
duced a cartel offence into UK law, making participation in cartel arrangements a
MacRoberts on Scottish Construction Contracts
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© 2015 John Wiley & Sons, Ltd. Published 2015 by John Wiley & Sons, Ltd.
