The EC Competition Law (Articles 88 and 89) Enforcement Regulations 1996

Explanatory Note

(This note is not part of the Regulations)

These Regulations make provision for the investigation of, and the making and enforcement of decisions in respect of, agreements or practices on which it appears to the Secretary of State the United Kingdom has a duty to rule under Article 88 of the EC Treaty.

Article 88 applies to cases where the Council of Ministers of the European Community has not made regulations under Article 87 giving effect to Articles 85 and 86 of the EC Treaty. Subject to the possibility of exemption under Article 85(3), Article 85 prohibits agreements between undertakings which have as their object or effect the prevention, restriction or distortion of competition within the common market and which may affect trade between Member States. Article 86 prohibits the abuse by one or more undertakings of a dominant position in the common market or in a substantial part of it in so far as it may affect trade between Member States.

No implementing regulation has been made under Article 87 in respect of air transport services between Member States of the European Community and countries outside the European Community or in respect of international maritime tramp vessel services.

Regulation 3 empowers the Secretary of State to request the Director General of Fair Trading to carry out a preliminary investigation where it appears to the Secretary of State that the United Kingdom might have a duty to rule on whether an agreement or practice is prohibited by Article 85 or 86.

Regulations 4 and 5 provide that the Secretary of State may, following such a preliminary investigation, decide to take no further action in respect of the agreement or practice, or in the case of an agreement, declare that the exemption provided for in Article 85(3) applies. Alternatively, the Secretary of State may decide to refer the matter to the Monopolies and Mergers Commission for investigation and report. Regulation 14 provides that the Secretary of State may accept enforceable undertakings from the persons concerned instead of making a reference to the MMC.

The Regulations make provisions for the publication of decisions to take no further action or exemption declarations made by the Secretary of State following a preliminary investigation (regulation 6) and for the procedures to be followed with regard to the MMC’s investigation and report (regulations 7 to 13, and 15 to 18).

Following a report by the MMC which concludes that an agreement exists which falls within Article 85(1), the Secretary of State may declare an exemption or make an order for the purpose of terminating the infringement (regulations 19 and 21(1) and (2)). Where the MMC concludes that an infringement of Article 86 has occurred, the Secretary of State may make an order for the purpose of terminating the infringement (regulation 21(3) and (4)).

As an alternative to making an order, the Secretary of State may accept enforceable undertakings from the persons concerned (regulation 22).

The regulations also enable the Secretary of State to make orders where the Commission of the European Communities authorises the United Kingdom to take measures under Article 89 of the E.C. Treaty (regulations 21(1) and 21(3)).

The regulations contain provisions for the enforcement of orders (regulation 24) and provide for an offence of providing false or misleading information (regulation 25), and for restricting the disclosure of information with respect to a particular business obtained under the Regulations except for permitted purposes (regulation 28).

Regulation 30 provides that the regulations may not be used to investigate agreements or practices which have ended before the regulations come into force.

The Regulations come into force on the day after they are laid before Parliament.