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Competition Act - Chapter II prohibition

Competition Act - Chapter II prohibition

The Chapter II prohibition bans conduct that amounts to abuse of a dominant position in the relevant market and affects trade within the UK.

Generally, a company is unlikely to be considered dominant if it has a market share of less than 40%. However, other factors will also be relevant when assessing dominance. The Act gives specific examples of types of conduct that are likely to be considered an abuse. These include:

  • Charging excessive prices
  • Forcing buyers of one product to buy another product from you by 'tying' the products
  • Charging prices that are artificially low to prevent competitors from being able to enter or continue in the market
  • Refusing to supply products to another business, preventing that business from competing in another market.

A business found breaching the Chapter II prohibition can be fined up to 10% of worldwide turnover. They can be investigated by the Competition and Markets Authority (CMA) and ordered to stop their illegal behaviour. There are no exemptions from a breach of the Chapter II prohibition. However, there is limited immunity for conduct of minor significance. The CMA won't fine an undertaking with a turnover of less than £50 million per year.

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