Member Article

New rules for price fixing challenges

Consumers and companies could have new ways to challenge business acting in an anti-competitive way, through new proposals by Competition Minister Jo Swinson.

The Government have published a response to a consultation on private actions in competition law, and suggest changes that will make it easier for consumers and companies to take collective legal action.

Changes include making the Competition Appeal Tribunal the main court for competition actions in the UK; and the introduction of a new opt-out collective actions regime, with protections, for competition law.

Jo Swinson said: “Competition is one of the great drivers of growth; it keeps our prices low and our businesses innovating. This is why it’s important that where there are businesses who abuse their position in the market, those who have been affected can take appropriate action.

“I’m pleased to announce these changes which will make sure that consumers and businesses can resolve any disputes quickly and easily, and help them get their money back. Businesses who want to voluntarily offer compensation will be able to do so through collective settlement and will be protected from expensive and lengthy legal action.

“Actions like price-fixing or imposing unfair trading terms can really harm businesses, particularly small businesses, and restrict their ability to grow; and that is why we will create a fast-track system in the courts for businesses to restore justice as quickly as possible. These changes will empower consumers and businesses, and continue to improve on the UK’s position as a world-class competition regime.”

Under the “opt-out collective regime,” representative bodies will be able to take a group or collective action in court, and groups of consumers or businesses will automatically be included unless they opt-out.

Businesses accused of wrongful behaviour will only pay back what was lost by the consumer or other businesses should they lose the case.

Which? Executive Director, Richard Lloyd, said: “This will give consumers more power against unscrupulous businesses. In the small number of cases where this will apply, collective legal action and settlements will automatically include everyone who has been affected so more people should get redress and sooner.

“The proposals will help to put consumers in the driving seat and will also act as a meaningful deterrent to dodgy or dishonest firms. This is good for consumers, responsible businesses and the wider economy.”

Katja Hall, CBI Chief Policy Director, said: “The Government has let the litigation genie out of the bottle by adopting US-style collective actions. By grouping potential claimants together indiscriminately these ‘opt-out’ actions fail the growth test and will fuel a litigation culture in the UK.

“It is absolutely right that victims of competition law breaches are properly and swiftly compensated but there are better ways to do this than resorting to litigation, like using alternative dispute resolution.”

This was posted in Bdaily's Members' News section by Tom Keighley .