Competition law dos and don’ts
16th April 2018
The Competitions and Markets Authority has recently published new advice on joint ventures between businesses and competition law.
Please click here for the guidance.
GP organisations (whether individual practices or federations) may at first glance think this is not relevant to them, but there are situations where they could fall foul of competition law.
Competition law seeks to promote competition and bans anti-competitive agreements between business such as agreements to fix prices and carve up markets. Mergers between businesses can also be prevented if they might reduce competition.
The types of activity that might cause GP organisations to be in breach of competition law include:
- Agreeing with another provider that you will bid for one contract and they will bid for another so as not to compete with each other.
- Where you provide services for which you are able to charge patients, agreeing with other providers the prices that you will charge.
- Agreeing with other providers that you will not accept patients from outside a particular area in return for them agreeing not to accept patients from your defined area.
These types of activity which amount to an agreement between businesses not to compete with each other are criminal offences and carry a maximum penalty of five years’ imprisonment and/or an unlimited fine.
In addition, where practices merge or practices or federations form a joint venture, this could be investigated if the merged organisation has a turnover of £70 million or more or the merged organisation would share 25% or more of the market in a substantial part of the UK. A merger or joint venture between a small number of practices is therefore unlikely to cause difficulties, but as super-practices grow or larger federations start to form and in turn form joint ventures with other organisations, the parties need to be mindful that their activities could be investigated. Ultimately, the regulator has the power to reverse a transaction, so it is important to seek legal advice before proceeding.
Ward Hadaway has specialist competition lawyers who are able to provide advice on competition law.
If you would like further information, please do not hesitate to contact Alison Oliver.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.