[Home](/)/[Resources](/resources)/CMA Competition Law United KingdomCompetition LawCMA # UK CMA Competition Law for Hardware and Electronics Companies The Competition and Markets Authority enforces the Competition Act 1998 and Enterprise Act 2002 with fines of up to 10% of global turnover and the power to unwind completed mergers. For hardware and electronics businesses, the highest-risk areas are distribution agreement design, resale price maintenance, and merger control — all of which require careful structuring before deals are done and contracts are signed. Copy Link[Share on WhatsApp](https://wa.me/?text=https%3A%2F%2Fkrono-labs.com%2Fguides%2Fuk-cma-competition-law-hardware) At a glance Chapter I/II authority Competition and Markets Authority VABEO effective date 1 June 2022 (SI 2022/516) Merger threshold 25% share of supply or £70m UK turnover Max fine 10% of worldwide turnover ## Key competition law concepts for electronics businesses ### Chapter I Prohibition — Competition Act 1998 s2 Section 2 of the Competition Act 1998 prohibits agreements between undertakings that have as their object or effect the prevention, restriction, or distortion of competition in the UK. This mirrors EU Article 101 TFEU but is applied by the UK Competition and Markets Authority post-Brexit. Price-fixing, market sharing, bid-rigging, and output limitation are all hard-core restrictions — automatic infringements regardless of market share. Agreements with appreciable effects on competition are caught; the 'de minimis' safe harbour applies only to agreements between undertakings with combined UK turnover under £20 million. ### Chapter II Prohibition — Abuse of Dominant Position Section 18 of the Competition Act 1998 prohibits conduct by a dominant undertaking that amounts to an abuse of that dominance — excessive pricing, predatory pricing, exclusive dealing, margin squeeze, and refusal to supply on discriminatory terms. Dominance is assessed on the relevant product and geographic market. A market share above 40% gives rise to a presumption of dominance, though market share alone is not determinative. For electronics companies, dominant platform or component suppliers must be particularly cautious in how they structure distribution and licensing terms. ### Vertical Agreements Block Exemption Order 2022 — VABEO The Vertical Agreements Block Exemption Order 2022 (SI 2022/516) is the UK's post-Brexit replacement for the EU Vertical Block Exemption Regulation. It provides a safe harbour for vertical agreements where neither party has a market share exceeding 30%. The VABEO excludes certain hard-core restrictions from the block exemption — most importantly, resale price maintenance and restrictions on passive sales into exclusive territories. Electronics distribution agreements that comply with VABEO conditions are presumptively lawful; those that contain RPM clauses are not protected regardless of market share. ### Resale Price Maintenance — The Hard-Core Prohibition Resale price maintenance (RPM) — fixing, directly or indirectly, the price at which a distributor resells goods — is a per se restriction under both the Chapter I prohibition and outside the VABEO safe harbour. De facto RPM is equally prohibited: supplying retailer termination lists, monitoring online pricing and threatening or actually withdrawing supply from price-cutters, and suggested retail price systems operated in a way that coerces compliance — all carry the same risk as explicit price-fixing. The CMA has pursued RPM enforcement against consumer electronics brands; fines reach 10% of worldwide turnover. ### CMA Merger Control — The Share of Supply Test Under the Enterprise Act 2002, the CMA has jurisdiction over mergers where the target has UK turnover exceeding £70 million, OR where the parties together supply or acquire 25% or more of goods or services of a particular description in the UK and the merger results in an increment to that share. This 'share of supply' test has no minimum turnover threshold — it can catch transactions that would fall well below EU or US notification thresholds, particularly in specialised electronics markets where components or services may be narrowly defined. ### Digital Markets, Competition and Consumers Act 2024 — SMS Designations The Digital Markets, Competition and Consumers Act 2024 gives Ofcom power to designate undertakings with Strategic Market Status (SMS) in respect of a specified digital activity. SMS-designated firms face bespoke conduct requirements set by the CMA. For electronics businesses, this is primarily relevant where your products integrate into or depend upon platforms — app stores, cloud services, payment systems — that may themselves face SMS designation, creating downstream compliance obligations for your distribution model. ## Building a competition-compliant distribution and M&A process 01 Audit all existing distribution, reseller, and dealer agreements against the VABEO 2022 safe harbour conditions — verify neither party exceeds 30% market share on the relevant market and remove any hard-core restrictions, particularly any clause that could function as resale price maintenance. 02 Identify all pricing-related communications with distributors and retailers: price guidance documents, suggested retail price lists, and internal policies on responding to pricing deviations. Ensure there is no mechanism — explicit or implicit — that coerces adherence to a minimum resale price. 03 Review participation in industry trade associations and standards bodies: information exchanges about pricing intentions, future product launches, or customer allocation among competitors can found a Chapter I infringement even absent a formal agreement. Establish an agenda and minute review process. 04 Before any acquisition, joint venture, or asset purchase: apply the Enterprise Act 2002 share of supply test. Map the overlapping product categories and estimate combined UK shares. If the 25% threshold is reached, assess whether a CMA Phase 1 submission is required or advisable. 05 Prepare a Phase 1 merger notification if thresholds are met — the Merger Notice (Form ME) is submitted to the CMA, which has 40 working days to conduct its initial review. Failure to notify does not attract fines, but the CMA can investigate and unwind completed mergers. 06 Train sales, commercial, and marketing teams on competition law red lines: price discussions with competitors, coordinating bids, agreeing not to approach each other's customers, and RPM. Document training completion. Provide a clear escalation path for employees who encounter potential competition concerns. 07 Implement a formal competition compliance programme: written policy, senior management endorsement, risk assessment by business activity, annual training, internal audit, and a mechanism for employees to report concerns. The CMA gives credit for effective compliance programmes in leniency and settlement contexts. ## Frequently asked questions ### Does the UK CMA apply EU competition law after Brexit? No. Since 31 December 2020, the CMA applies UK competition law — the Competition Act 1998 and Enterprise Act 2002 — not EU competition law. The substantive tests are closely modelled on Articles 101 and 102 TFEU, and UK courts and the CMA continue to have regard to EU case law as a persuasive (not binding) interpretive guide under the Retained EU Law (Revocation and Reform) Act 2023. However, the CMA is now a fully independent authority: EU Commission decisions no longer bind UK proceedings, and businesses may face parallel enforcement by both the CMA and the European Commission for conduct affecting both markets. ### What is resale price maintenance and why is it so risky for electronics brands? Resale price maintenance is any arrangement — formal or informal — under which a supplier fixes or effectively controls the minimum price at which its distributor or retailer resells the product. It is a hard-core restriction under the Competition Act 1998 and sits outside the VABEO safe harbour regardless of market share. The risk for electronics brands is particularly acute because pricing is highly visible online: monitoring distributor prices and withdrawing supply from those who undercut a 'suggested' price is the most common form of de facto RPM that the CMA investigates. Fines can reach 10% of global turnover, and individuals responsible for infringements can be disqualified from acting as company directors. ### What are the CMA's merger notification thresholds? The CMA has jurisdiction to review a merger if either of two alternative tests is met. First: the target UK turnover exceeds £70 million (the turnover test). Second: the merged entity will supply or acquire 25% or more of goods or services of a particular description in the UK, provided the merger creates or increases that share (the share of supply test). Critically, there is no minimum deal value or acquirer size — the share of supply test can be satisfied in highly specialised, low-revenue markets. Unlike the EU, the UK has no mandatory pre-notification requirement, but the CMA can investigate completed mergers within four months of completion or public announcement. ### Can MAP (Minimum Advertised Price) policies breach UK competition law? Minimum Advertised Price policies — where a supplier sets a minimum price at which retailers may advertise a product — occupy uncertain legal ground. If the MAP policy is genuinely limited to advertising (not the actual selling price) and is unilaterally adopted without any agreement with retailers, it may fall outside Chapter I. However, if the MAP in practice functions as a floor for actual transaction prices, or if retailers who breach MAP face supply withdrawal in circumstances that constitute an implicit agreement, it risks being treated as RPM. The CMA has not issued definitive guidance on MAP specifically; legal advice on the specific policy design is essential before implementation. **Disclaimer:** Educational resource only. UK regulatory requirements change. Consult a qualified UK solicitor or compliance specialist before making decisions. [ Map your product, free Every standard, document, and test that applies — free, no account required. Start mapping](/platform/start) Learn this properly In-depth course that teaches the full process, not just this one answer. [Start the course — $149](/courses/09-ukca-marking-for-electronics-products)[Prefer to read? 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