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Buying power

The Bettercare decision established that Competition Act rules apply to public authorities. Jennifer Skilbeck asks what this will mean for public sector suppliers

16 August 2002

Can suppliers to the public sector ensure public procurement departments use their exceptional buying power fairly within the protection of the Competition Act 1998? This question has now received an answer from the Competition Commission Appeals Tribunal in BetterCare Group Ltd v Director General of Fair Trading (Preliminary Hearing: Jurisdiction) [2002] Comp AR 9. The tribunal was asked whether a public authority is an ‘undertaking’ for the purposes of the Competition Act when it purchases long term care for the elderly from the private sector. Its conclusion was a resounding ‘yes’. Background The Competition Act (and Arts 81 and 82 of the EU Treaty) seeks to control abuses which result from a dominant position (monopoly power) and anti-competitive agreements. However only monopoly power exercised by an ‘undertaking’, and agreements entered into between ‘undertakings’ are covered. The extent to which public bodies might be undertakings in the cont...

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