Businesses Empowered to Challenge Anti-competitive Practices

the gloves are off when it comes to anti-competitive behaviourSmall-business owners are set to find it easier to challenge anti-competitive behaviour and claim compensation, under new proposals unveiled by the Government.

By enabling small firms to contest anti-competitive behaviour — such as price fixing or abuse of a dominant market position by a big operator — the Government said that it hoped the changes would encourage business growth and promote fairness.

Key proposals included allowing the granting of further powers to the Competition Appeal Tribunal so that small businesses can make challenges faster and cheaper, as well as allowing more kinds of competition cases to be heard.

The Government also wants to introduce a new opt-out collective actions regime, which would allow consumers and businesses to club together and bring a case forward for shared losses.

Current law means that taking a case to court is often complex and costly for businesses, while small firms were often reliant on their case being prioritised for investigation by the Office of Fair Trading in order to get a hearing, a government spokesman said.  While the present system imposes fines on those who infringe competition rules, no financial compensation is available for victims.

Announcing the proposals, business minister Norman Lamb said that small businesses would be “better equipped to represent their own interests, stop anti-competitive behaviour, and seek redress if they have suffered loss”.

“Our proposals will further help to boost productivity, innovation and growth for business, consumers and the wider economy,” he said.

The Confederation of British Industry (CBI) said that it welcomed the move towards financial compensation for victims of anti-competitive behaviour, but warned that the proposals could also “fuel litigation”.

“The Government’s preference towards ‘opt-out’ class actions, which group potential claimants together without naming individuals, will magnify the total amount of potential claims,”

said CBI director for competitive markets Matthew Fell.

The Government is currently consulting on the proposals, with results expected to be announced later this summer. Businesses can submit responses until 24 June 2012 at competition.private.actions@bis.gsi.gov.uk

Businesses Empowered to Challenge Anti-competitive Practices

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