Fair Trading Assignment Example | Topics and Well Written Essays - 1000 words

Fair Trading - Assignment Example The Office of Fair Trading is the most important government body in this connection. It has the power to impose penalties on those found breaching the law. The amendments made to this Act in May 2004 assigned greater powers to OFT so it can now conduct investigations in case a business is suspected of violating the prohibitions. Apart from Chapter 1 and II prohibitions, business need to be mindful of the anti-competitive activities outlined in Articles 81 and 82 of the EC Treaty. These prohibitions are similar to those contained in Chapter I and II but contain some additional information. Company directors are under increased pressure from the government now with amendments to Company Directors Disqualification Act 1986 under the Enterprise Act 2002 whereby individuals found of breaching the law may face Competition Disqualification Orders. This can prevent them from managing a company for 15 years. Some key implications to remember include the power of OFT officials to demand documents that can establish the status of a firm and its trade practices. Any breach of fair trade practices can result in 10 percent fine for your business on an annual basis. Third parties can claim damages. The Enterprise Act 2002 has given additional force to compliance laws by making some anti-competitive activities criminal. The cartel offence clause can make some monopolistic activities liable to criminal prosecution. OFT gives priorities to cases of cartel offence and if found involved in a cartel, your business can face serious charges. The Fair Trading Act had initially granted power to Competition Commission for making monopoly references. However under Enterprise Act 2002 those powers have been assigned to Office of Fair Trading, which can now work as a statutory body in tandem with a Board. The Competition Commission is still an important body in this connection as it had the power to investigate monopolies on direction of Director of Fair Trade agency. However most of those powers have now been granted to Office of Fair Trading. It can still make investigations when appeal is registered on some decision taken by OFT. The Director General of Fair Trading has the power to investigate alleged breaches and if it finds that prohibitions have been violated, companies can be charged 10 percent of their annual revenue for 3 years. This is something that you will have to be very careful of since these charges can erode your profits for many years. That will consequently affect your share price and might result in a takeover. With the agencies and bodies that would try to control your monopolistic activities, there are some safeguards available which you should be aware of. If your company is concerned about possible monopolistic charges, you can instantly notify the Office of Fair Trading of agreements and any other activities that might constitute anti-competitive behavior. This can help you in seeking exemption by explaining how it might help and benefit other players. Secondly some agreements may actually not be in the jurisdiction of the agency and notification can help you understand where