Businesses and organisations operating in the electricity, gas and railway
sectors need to check that, as of 1 March 2005, they have no agreements which
have become newly exposed to the restrictive practices ban in the 1998 Competition
When the 1998 Act first came into force on 1 March 2000, it provided a five
year period of grace from that ban to certain agreements which previously had
enjoyed protection from the preceding competition legislation (called the Restrictive
Trade Practices Act 1976) usually for reasons of public interest.
In the electricity sector, such agreements included, for example, agreements
necessary for the smooth operation of electricity networks and were colloquially
called 'section 100 agreements', referring to the fact that the protection
was founded on section 100 of the 1989 Electricity Act.
In the gas sector, the equivalent agreements were 'section 62 agreements'
(referring to section 62 of the Gas Act 1986). In the railway sector, the equivalent
agreements were 'section 131 agreements' (referring to section 131 of the Railways
Of course, these agreements have already been subject since 1 March 2000 to
the so-called Chapter II prohibition (which bans the abuse of a dominant market
position). It is only the Chapter I prohibition (ie the ban on restrictive
practices) which will have applied anew from 1 March 2005.
What if you have any such agreements still in operation? Most importantly,
don't panic. Just because the transitional period has expired does not automatically
mean that that agreement is in breach of the Chapter I prohibition. What it
does mean though is that, ideally with the help of specialist advisers, you
should take a fresh (and pragmatic) look at whether that agreement has any
significantly anti-competitive element - and then plot a course of action accordingly.