These are the sort of scenarios with which people associate competition law. A giant telecoms company is forced to hive off part of its operation in order to prevent it becoming too powerful and able to control the market.
However, for the vast majority of the business world, this is not where they encounter competition law. The acquisition or merger of even small businesses can be affected by competition law where their market is very niche or where it is limited to a small geographical area. Where this is the case, the competition authorities can require that the acquisition or merger be unwound; potentially a very expensive outcome.
Competition law does not just affect business structures. Even ordinary commercial trading can be affected. Agreements for the distribution of products can be affected and can fall foul of competition law where certain clauses are included, such prices being fixed. Agreements or understandings between competing businesses can be picked up if they reduce choice or ensure that prices are maintained at a certain level.
BT is to be ordered to legally separate its Openreach network arm after failing to address competition concerns voluntarily. Telecoms watchdog Ofcom said it was “disappointed” with BT’s proposals since it outlined plans in July to make Openreach a “distinct company” within the BT group. The regulator will now prepare a formal notification to the European commission to start the process of forcing a legal separation of Openreach, which develops and maintains the UK’s main telecoms network used by telephone and broadband providers such as Sky, TalkTalk, Vodafone and BT Consumer.