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The Competition Act

The Competition Act came into force on on 1 March 2000. It prohibits anti-competitive arrangements or agreements and abuse of dominance. Dominance is defined as a 40 per cent market share. The free market works on competition so where do you draw the line? Here are some practical guidelines:

Forbidden:

• fixing prices or other terms of business with competitors so as to restrict competition;
• exchanging information on prices or other terms to the same effect;
• fixing on-selling prices;
• splitting markets;
• refusing to accept an order so as to reinforce your dominance;
• taking part in a boycott eg of a supplier or of a customer;
• imposing unreasonable terms, if dominant;
• if dominant, tying in an advertiser.

Permitted

• There are exemptions if the effect is to improve production or distribution, or promote technical or economic progress - such as the current system of distributing newspapers and magazines.