Competition law compliance

Every company needs to assure themselves that they have taken the necessary steps to ensure compliance with UK and EU competition law.

To help ensure companies understand and comply with these obligations, we have developed guidance to allow them to better understand how competition law will apply to them – and our process for prioritising and deciding whether to begin an investigation.

We have powers alongside the Competition and Markets Authority to enforce competition law in the water sector in England and Wales.

We do not however have concurrent jurisdiction to prosecute the “cartel offence” (defined in the Enterprise Act 2001). If we are made aware of conduct relating to a suspected cartel offence we will refer the matter to the Competition and Markets Authority. It is the only authority empowered to grant criminal immunity and issue a no-action letter with respect to prosecutions under the criminal cartel offence.

Under competition law, competition authorities may grant leniency to businesses who inform them of cartel activities and commit to ongoing cooperation during an investigation. Leniency may take the form of total immunity from fines for the first business to successfully apply, or a reduction in penalties. Applications for leniency should be made directly to the Competition and Markets Authority in accordance with its published principles and process for leniency and its information notice on arrangements for the handling of leniency application in the regulated sectors.

Competition law obligations

The Competition Act 1998 (CA98) imposes two key prohibitions on anti-competitive conduct.

Agreements that may actually or potentially distort competition

We can consider allegations against any natural or legal person engaged in economic activity, regardless of its legal status and the way in which it is financed.
We will define the relevant market, product market and geographic market based on the facts of each individual case.
An agreement does not need to be in writing, but also covers tacit understandings as well as express agreements. Concerted practices include forms of co-ordination that fall short of a full agreement.
Prohibition applies to an agreement only if it has as its object or effect the prevention, restriction or distortion of competition.
Agreements between direct competitors (‘horizontal agreements’) to limit competition are regarded particularly seriously. But agreements can also take place between undertakings active at different levels of the market (‘vertical undertakings’).
There are exemptions where an agreement may not be unlawful, even if it restricts competition.

The abuse of a dominant market position

Dominant companies are those with significant market power, such as the ability to sustain prices significantly above competitive levels or restrict output or quality significantly below competitive levels.
Dominant companies have a special responsibility not to allow their conduct to impair or distort competition. They can be classed as ‘super-dominant’ where they enjoy very significant market power, where they operate as a monopoly or quasi-monopoly.
We will consider a range of factors in assessing market power and dominance.
Dominance itself is not prohibited. It is only the abuse of a dominant position that is unlawful.
It is not necessary for dominance to exist and abuse to occur on the same market.
Types of abusive conduct that may be of particular concern where dominant undertakings are vertically integrated include predation, refusal to supply and margin squeeze
A dominant undertaking can defend itself against an allegation of abuse by demonstrating that it has an objective justification for its conduct.

Examples of competition law infringements

The Competition and Markets Authority has produced a range of materials to help companies understand competition law. This includes animated films, which are available on YouTube.

Our process for investigating allegations

We will apply our prioritisation principles (Impact, Strategic significance, Risks and Resources) to all potential competition law allegations in deciding whether to begin an investigation and will continue to keep this under review.

We will also work closely with the Competition and Markets Authority.

Submitting a complaint

If you consider you have grounds to complain about a possible infringement, you should provide us with the following information to allow us to make a preliminary assessment of a relevant complaint.

Competition law complaints

Name*
Business name*
Email address*
Phone number*
A summary of your complaint*
This should set out the CA98 or EU competition law prohibition(s) you believe have been infringed and why. It should also include details of: • the alleged infringement, the parties involved and your relationship with the target of the complaint, • the products or services connected to the supply of water and waste water services or activities in England and Wales, • key dates of the alleged infringement, • the detriment to the complainant, • the detriment to customers and consumers in the market or related markets.
Background material*
You should include the following information as a minimum: • Business name, address, telephone number, e-mail address and the contact details of a person who can discuss the detail of a complaint. • A brief explanation of the nature of your business and its scale (local, national, international, approximate turnover). • Details of any closely related markets which are relevant to your complaint. • approximate market shares of key participants active in the market and any related markets which are relevant to your compliant, • the nature of supply and/or demand for products/services in the market, and any related products/services in the market or related markets, which are relevant to your compliant.
Supporting information
Drop files here or

Max. file size: 80 MB.
You should include: • any relevant letters, emails, reports or other documents which detail the events which are the cause of your compliant, • any other material that will assist us with understanding and substantiating your complaint.

Declaration

If you are complaining on behalf of a regulated entity, whether a water undertaker or licensee, you should include a declaration that the information in your submission is correct and complete to the best of your knowledge. Your declaration should include:

your name and signature;
your position in the company; and
the date.

Process

Our case management office will acknowledge receipt of a complaint within 10 working days, including an initial view as to whether the complaint meets the requirements set out above. If a submission does not meet these requirements, we will advise you what else may be needed before we will consider the complaint.

Should we decide to open a case in response to your complaint, Ofwat may send a non-confidential version of your submission to the parties named in your complaint. Ofwat may wish to do so prior to formally opening any investigation. If your submission contains confidential information, you should provide a separate non-confidential version that we can send to the target(s) of the complaint, as well as explaining why you believe the information to be confidential.

In addition, unless you specifically ask Ofwat not to do so, Ofwat will disclose your identity to the target(s) of the complaint and in the event that Ofwat decides to investigate your complaint, Ofwat will publish details of the complaint, including your identity, on Ofwat’s website.

If you need any further guidance on how to submit a complaint to Ofwat please contact our casework management office.

Where to send complaints

If you do not wish to complete the online form above, you can post complaints to:

Case Management Office
Ofwat
Centre City Tower
7 Hill Street
Birmingham
B5 4UA

E-mail: [email protected]

Telephone: 0121 644 7500