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Monopoly
Provisions of the Fair Trading Act 1973
The prohibition of abuse of a
dominant market position in the Competition
Act 1998 is intended to be the principal weapon against
anti-competitive behaviour by monopolists. However, the complex and
scale monopoly provisions of the Fair Trading Act 1973 (FTA) will
continue to be used, albeit in limited circumstances. It is not
intended that the prohibitions in the Competition Act and the FTA
monopoly provisions should be used in parallel to investigate the
same matters.
A scale monopoly exists where one
firm has at least 25% of a market. A complex monopoly exists where
two or more firms together account for at least 25% of a market and
engage in similar conduct. The FTA enables the DGFT, the Utility
Regulators and the Secretary of State to refer possible monopoly
situations to the Competition Commission for them to investigate
and, if they find a monopoly situation to exist, to decide whether
it operates against the public interest. The Competition Commission
makes their report to the SoS. If the Competition Commission find
that a monopolist does act against the public interest it is for the
SoS to decide what remedies, if any, to impose. Remedies may take
the form of behavioural remedies (eg stopping particular practices)
or structural remedies (eg divesting specific parts of a business).
The complex monopoly powers of the
Fair Trading Act fill a gap between the two prohibitions. For
example, they allow investigation of markets where there is parallel
behaviour by companies but no actual agreement.
The policy is that use of the scale
monopoly powers should be limited to situations where a prior
infringement of the prohibitions in the Competition Act has already
been proven and where the DGFT believes there is a real prospect of
further abuse by the same company. The structural remedies available
under the scale monopoly powers may be the only effective means of
preventing further abuse. This policy does not apply to the
regulated utility sectors. The Government's
Response (July 1998) to the Utilities Review Green Paper made
clear that full use of the scale monopoly provisions is to be
retained for these sectors.
• procedures for handling Monopoly references and reports.
Recent
and current FTA Monopoly Inquiries & Cases
Recent Cases
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Supply
of cars
 Please
click the button to view our FactSheet and FAQ (Frequently
Asked Questions) on the EC Block Exemption for
Cars.
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Supermarkets
The Competition Commission
report on the supply of groceries to stores was published on
10 October 2000. The Director General of Fair Trading was
asked to agree a code of practice on supermarket/suppliers
relations with the major supermarkets. The Secretary of
State announced on 31 October 2001 that she had asked the
Director General to seek undertakings from the four main
supermarket chains to comply with the Code. On 18 December
2001, the supermarkets gave undertakings to comply with
code.
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Supply
of fresh processed milk in Scotland
The Competition Commission
report on the supply of fresh processed milk to middle
ground retailers in Scotland was published on 18 December
2000. Although the reporting group reached an adverse
finding no recommendations for remedies were made as the
required two-thirds majority of the group was not achieved.
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Supply
of banking services by clearing banks to SMEs
The Competition Commission
report on the supply of banking services by clearing banks
to small and medium sized enterprises was published on 14
March 2002. It had been referred to the Competition
Commission on 20 March 2000, and delivered to Ministers on
19 October 2001.
July 2002 - Big Four
Banks agree to Competition Commission remedies for Small and
Medium Size Enterprises
October 2002 – Eight
main clearing banks agree to Competition Commission remedies
for Small and Medium Size Enterprises
October 2003 - Main
eight clearing banks agree to undertakings to ease switching
of accounts
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Current
Inquiries & Cases
(not yet published)
We do not announce
publication dates for Competition Commission reports in advance.
Our administrative target is to publish monopoly reports within 10
weeks of receipt of the report, but that may be shorter or longer in
any particular case depending on a number of factors.
However, you can request to receive
a copy of the DTI press release announcing publication of any of the
forthcoming monopoly reports/cases mentioned below when those
reports are published. To join the mailing list for a particular
report, simply send an email - with the report title as the subject
heading - to: monopannounce@dti.gsi.gov.uk. Clicking on the
link in the relevant case will open up such an email for you.
Information on the Beer
Orders is on a separate page.
Most of
the above documents are in Adobe Acrobat PDF format. To
view them on-line you need to use the free PDF file viewer
Acrobat Reader from Adobe Systems Incorporated. You may
download it directly from the UK Adobe web site by clicking
the icon below.
DTI Contact
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