The Competition Act 1998, which came into force on 1 March, prohibits anti-competitive agreements and behaviour. It gives the UK competition authorities the power to carry out dawn raids and to fine companies for breach of the Act. The maximum fine that can be applied requires companies to pay 10% of their turnover for three consecutive years.
The Chapter I prohibition bans agreements between undertakings and decisions by associations'of undertakings which prevent, restrict or distort competition in the UK and could affect trade. The Chapter II prohibition bans con duct which abuses a dominant position in the UK and could affect trade.
According to solicitors Lovells, the Director General of Fair Trading and the sectoral regulators have powers to carry out dawn raids, take copies (and, in certain circumstances, originals) of documents and require company employees to explain the content of documents. Obstructing an investigation can give rise to criminal liability.
