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Competition law: essential advice for businesses

The Competition and Markets Authority (CMA) has today published new guidance for businesses thinking of, or already operating, joint ventures.

The new report is designed to help businesses comply with competition law, following the recent Micronclean Limited and Berendsen Cleanroom Services Limited controversy.

The two entities were fined £1.7 million after agreeing not to compete for each other’s customers.

The new guidance, found here, looks at how companies can avoid entering into similar arrangements and the sanctions company directors can expect if they fall foul of competition law.

The CMA has urged competing businesses to make sure they “collaborate legally”, check they are compliant with competition law from the outset of agreements and to keep arrangements under regular review.

Ann Pope, CMA Senior Director, Antitrust, said: “At the CMA we support collaboration between competitors that leads to innovation and directly benefits customers but there can be a fine line between collaborating and colluding. Certain forms of collaboration between competitors are illegal under competition law and businesses can face large fines if they break the law.

“Competing businesses setting up a joint venture should be clear about how collaborating will directly benefit customers, and that the benefit of joining forces couldn’t equally be achieved by acting alone but in competition with each other.

“Labelling a collaboration as a ‘joint venture’ will not protect businesses from the scrutiny of competition law. Our new advice provides pointers on what is and isn’t allowed when operating a new or existing joint venture – I urge businesses and legal advisors alike to read and share it.”

The regulator has asked law firms to share this guidance with clients. If you or anyone you know may benefit from our advice, please get in touch.

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ELS Legal is an international law firm based in London with more than 50 partner offices across the world. As part of the Cathay Associates global legal network, we are the first choice law firm for a number of British businesses and overseas clients.

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