What does the Competition Act 1998 primarily prohibit?

The primary focus of the Competition Act 1998 is to promote competition and prevent anti-competitive behavior in the market. One of the key aspects of this act is the prohibition of agreements and practices that harm or restrict competition. This includes behavior such as price-fixing, market-sharing, and other collaborative practices among businesses that could lead to a negative impact on market competition.

By prioritizing this prohibition, the act aims to protect consumer interests and foster a competitive marketplace where businesses can operate fairly. This regulatory framework is designed to prevent monopolistic behaviors and ensure that competition remains healthy, enabling fair prices, innovation, and consumer choice.

In contrast, business collaborations that merely reduce prices, high profit margins in dominant firms, or all forms of business contracts do not encapsulate the core intent of the act. The act is specifically concerned with maintaining competitive dynamics in the market rather than regulating pricing or profit margins directly or prohibiting all business contracts indiscriminately. It is the safeguarding of competition that remains paramount under this legislation.