EU AND COMPETITION
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Consider the impact of the Competition Act 1998
The enactment of Competition Act 1998 on 9 November last year was the biggest amendment to UK competition law for over 20 years. Agreements entered into after that date must now be vetted for compliance with the act before 1 March 2000, when it takes effect. The old provisions of the Restrictive Practices Act 1976, the Resale Prices Act 1976 and the Competition Act 1980 are repealed with some transitional provisions to be applied during the interim period. CA 1998 requires interpretation of UK competition law in compatibility with EC law. To assist this, it introduces the following two new blanket prohibitions akin to Arts 85 and 86 of the Treaty of Rome:
• agreements which have as their object of effect the prevention, restriction or distortion of competition within the UK; and • any conduct on the part of one or more undertakings which amounts to abuse of a dominant position. The penalties for breaching the prohibitions include: • fines of up to 10% of company's UK turnover; • infringing agreements will be void and unenforceable; • order for termination of infringements; • third parties may be able to sue for damages suffered as a result of a breach.
The Director General of Fair Trading (DGFT) will have the power to raid company premises if a breach is suspected; to inspect documents, demand information or explanations, and may make criminal sanctions for impending investigations.
your company The single currency was launched on 1 January this year with a three-year transitional period until June 2002. Companies will be prohibited from using their national currencies from that latter date and they will cease to be legal tender. Although the UK is not yet a
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member of the euro, there ore significant practical reasons why UK companies cannot afford to ignore the potentially far reaching effects of its introduction: • pan-European companies will insist on being invoiced in euros; • there will be increased industry consolidation across the "euro zone" leading to mergers; • there will be increased investment opportunities across Europe leg trade in euro bonds and debt and equity securities); • UK companies will be disadvantaged if they cannot deal in euros as their investment base will be narrower than other firms who can; • listings on other European stock exchanges will require at least some of a company's equities to be in euros; • accounting costs for billing in dual currencies will increase.