Enterprise Act 2002

The Enterprise Act 2002 has wide-ranging implications for businesses and consumers.

The Enterprise Act 2002 makes a number of important reforms, which are designed to crack down on abuses that harm customers and fair-trading businesses alike and thus encourage productivity and enterprise...

The Act establishes and provides for the functions of the Office of Fair Trading (OFT), the Competition Appeal Tribunal and the Competition Service.

The Enterprise Act 2002 also

  • makes provision about mergers and market structures and conduct;
  • amends the constitution and functions of the Competition Commission; creates an offence for those entering into certain anti-competitive agreements; provides for the disqualification of directors of companies engaging in certain anti-competitive practices; makes other provision about competition law; * amends the law relating to the protection of the collective interests of consumers; makes further provision about the disclosure of information obtained under competition and consumer legislation;

The Enterprise Act 2002 has wide-ranging implications for businesses and consumers by strengthening the UK’s competition framework, transforming our approach to bankruptcy and corporate rescue, and empowering consumers.

Enterprise Act 2002 also builds on the progress made by the Competition Act 1998, recent insolvency reforms and measures already implemented in the 1999 White Paper ‘Modern Markets: Confident Consumers’. The Enterprise Act contains measures that reform competition law, strengthen consumer protection and modernises the insolvency regime.

Offences

An individual is liable to criminal prosecution if he or she dishonestly agrees with one or more other persons that undertakings will engage in one or more of the prohibited cartel activities. These are:

  • price-fixing
  • limitation of supply or production
  • market-sharing, and
  • bid-rigging.

Prosecutions will normally be conducted by the Serious Fraud Office although the Office of Fair Trading also has the power to prosecute. Private prosecutions may be brought only with the consent of the OFT. In Scotland, prosecutions will be brought by the Lord Advocate.

Penalties

The cartel offence is triable either in a magistrates' court (summary trial) or before a jury (trial on indictment). Before the magistrates, a convicted offender may receive a six month term of imprisonment and/or a fine up to the statutory maximum. On conviction on indictment, an offender may receive a maximum of five years' imprisonment and/or an unlimited fine.

Arrangement of parts

The Enterprise Act 2002 is divided into eleven parts:

  • Part 1 establishes the OFT as a corporate body and sets out its general functions, and provides for arrangements for making super-complaints. Formerly, the OFT existed only as administrative support for the statutory office of the Director General of Fair Trading, and not as a legal entity in its own right.
  • Part 2 established the Competition Appeal Tribunal (CAT) and made provisions for proceedings to be brought before it. The CAT is a new independent body which has taken on the functions of the Competition Commission Appeals Tribunal as well as some new functions.
  • Part 3 Part 3 makes provision for a new merger control regime, with various responsibilities attributable to the OFT, the Competition Commission and, in exceptional cases, the Secretary of State (SoS).
  • Part 4 makes provision for market investigation references to be made by the OFT, or in exceptional cases by Ministers, to the Competition Commission and describes how the CC should decide, and report on such cases.
  • Part 6 creates a new criminal offence for individuals engaged in cartels, and provides the OFT with certain investigatory powers.
  • Part 7 deals with a number of miscellaneous competition provisions, including a new power for the court to disqualify company directors who engage in serious breaches of competition law and some minor amendments to the Competition Act 1998.
  • Part 8 outlines new procedures for enforcing certain consumer legislation and related matters.
  • Part 9 provides new rules to govern the disclosure of certain types of information by public authorities.
  • Part 10 changes insolvency law, and will not be considered further in this guidance.
  • Part 11 contains supplementary provisions, such as how the Act will be brought into force and in which UK territories the Act applies.

Reference

Enterprise Act 2002

UK/2002/C/40