Competing Companies: How To Compete Lawfully In The UK

Every business has competitors. Competing hard is healthy – it pushes you to innovate, sharpen your pricing and delight customers. But there’s a line between fair competition and unlawful conduct, and UK competition and marketing laws draw that line clearly.

If you’re running or scaling a small business, it’s important to know what you can and can’t do when dealing with competing companies – from pricing and promotions to hiring and industry forums. Getting your legal foundations right here will keep you out of trouble with regulators, protect your brand and allow you to grow with confidence.

In this guide, we break down the key UK rules that apply when you compete, practical do’s and don’ts, and the contracts and policies that help you stay protected from day one.

What Does Lawful Competition Look Like In The UK?

UK competition law is mainly set out in the Competition Act 1998 and the Enterprise Act 2002. In short, these laws prohibit two broad categories of behaviour:

• Anti-competitive agreements: arrangements between businesses that prevent, restrict or distort competition (think price-fixing, market sharing, bid-rigging or limiting output).
• Abuse of dominance: if a business is dominant in a market, it must not abuse that position (for example, by unfairly excluding rivals).

The Competition and Markets Authority (CMA) enforces these rules. Breaches can lead to heavy fines (up to 10% of worldwide turnover), director disqualification and, for the most serious cartel activity, criminal liability.

So, what does lawful competition look like in practice?

• Setting your prices independently, based on your own costs and strategy – not coordinated with competitors.
• Marketing that is honest, verifiable and doesn’t mislead consumers or unfairly disparage competitors.
• Vigorous but fair negotiations with suppliers and distributors, without imposing restrictions that unlawfully limit their ability to sell or set prices.
• Recruiting talent on merit without entering “no-poach” or wage-fixing arrangements with other employers.

If you’re ever in doubt, assume your business decisions must be made independently. The risk arises when competitors coordinate or exchange sensitive information that reduces uncertainty in the market.

Can I Talk To Competitors? Information Sharing, Benchmarking And Trade Associations

You can attend industry events, join trade associations and discuss general, non-sensitive topics. However, exchanging commercially sensitive information with competing companies is risky. Sensitive information includes current or future pricing, discounts, costs, margins, volumes, capacity, customer lists, sales forecasts and business plans.

Even if you never agree to anything explicit, sharing sensitive information can amount to an unlawful concerted practice. Be especially cautious with:

• “Off-the-record” chats at conferences or networking drinks.
• Benchmarking exercises that reveal identifiable competitor data rather than anonymised, aggregated figures.
• Trade association meetings where prices, discounts, promotions, tenders or allocation of customers/territories are discussed.

Practical do’s and don’ts:

• Do keep discussions high-level and focused on non-sensitive topics like general industry trends, regulatory changes or technology developments.
• Do ensure any benchmarking uses independent third parties, anonymised data and sufficiently broad aggregation so individual competitors can’t be identified.
• Don’t share or request current/future prices, margin targets, discount policies, specific customer allocation or tender intentions.
• Don’t agree (even informally) to align prices, promotions, output or territories.
• Do leave the meeting – and ask your concerns to be minuted – if sensitive topics arise.

If you participate in a trade association, make sure there’s a clear competition compliance policy and agenda, and that meetings are minuted. For your own internal controls, train staff on what they can and can’t discuss externally and keep a written record of legitimate meetings with competitors or association committees.

Pricing Against Competing Companies: What You Can And Can’t Do

Setting competitive prices is central to winning customers – that’s fine. What’s not permitted is coordinating prices with competitors or using tactics that unlawfully exclude rivals. Two common problem areas are worth calling out:

Resale Price Maintenance (RPM)

If you’re a supplier, you usually can’t force retailers or distributors to sell at or above a minimum price. This practice – often called resale price maintenance – is generally unlawful in the UK. You can recommend retail prices (RRPs) and set maximums in certain circumstances, but the customer must remain free to set lower prices. Watch out for indirect pressure too (e.g., threatening to cut supply if a retailer discounts).

Below-Cost Selling And Exclusionary Tactics

Aggressive discounting is lawful unless it crosses the line into conduct that could exclude equally efficient competitors. If you hold significant market power, sustained below-cost pricing aimed at driving out competitors can raise issues under abuse of dominance rules. This is sometimes characterised as predatory pricing. The assessment is fact-specific, but as a rule of thumb, price independently and avoid strategies designed to foreclose rivals rather than win on merit.

Price Matching, Price Signalling And Algorithms

Public price matching policies can be legitimate, but avoid language or communications that effectively “signal” future pricing intentions to competitors. Likewise, if you use pricing algorithms, ensure they’re configured and overseen to prevent tacit collusion or alignment that stems from shared data or vendor coordination.

When designing promotions, loyalty pricing or dynamic pricing, also consider consumer law. Your advertised prices must be clear and not misleading, and your promotions need fair terms and conditions. If you collect and use customer data for pricing personalisation, ensure compliance with UK GDPR and the Data Protection Act 2018.

Advertising Against Competitors: Comparative Claims, Keywords And IP

Comparative advertising (naming or clearly referring to a competing brand or product) is allowed in the UK, but there are rules. The Business Protection from Misleading Marketing Regulations 2008 and the CAP Code require that comparative claims are objective, verifiable, not misleading and compare like-for-like features. You also must not denigrate a competitor or take unfair advantage of their reputation.

Keep in mind:

• Substantiation: If you say you’re “cheaper than” or “better than” a competitor, you need robust, up-to-date evidence and a clear basis for the comparison.
• Clarity: Any qualifications must be prominent, not buried in fine print. If the claim is limited to a specific product, time period or basket, say so clearly.
• Trade marks and passing off: You can refer to a competitor’s brand in a fair, honest comparison, but you must not imply endorsement or confuse consumers about origin. Protect your own brand by registering your trade mark and monitoring how others reference it.
• Ad platforms and keywords: Bidding on competitor brand names as keywords is not automatically unlawful, but your ad copy must not mislead or suggest affiliation. If a rival’s mark appears in your ad text without justification, you risk infringement or a takedown.

Misleading claims can lead to ASA action, trading standards interventions and civil claims. Be rigorous with copy review and evidence gathering to avoid false advertising risks.

Hiring From Competing Companies And Restrictive Covenants

Competing for talent is part of healthy competition – but avoid agreements that unlawfully restrict employee movement. “No-poach” or wage-fixing agreements between employers are anti-competitive and can trigger serious penalties.

From the employer side, you can protect your legitimate interests through narrowly tailored restrictive covenants in your employment contracts. These may include non-solicitation clauses (preventing ex-employees from soliciting your customers or staff), confidentiality obligations and, in some cases, non-compete clauses. Enforceability depends on reasonableness in scope, geography and duration.

• Non-solicitation: A well-drafted non-solicitation clause can help protect your customer relationships and team from targeted poaching after someone leaves.
• Non-compete: Use with care and only where necessary to protect confidential information or goodwill; courts scrutinise them closely. For drafting tips, see our guidance on non-compete clauses and what’s reasonable in duration.
• Confidentiality: Ensure your confidentiality policy and contracts clearly cover trade secrets, pricing models, customer data and know-how.

When recruiting from a competitor, ask candidates to disclose any post-termination restrictions and make it clear you don’t want confidential information from their previous employer. If a new hire brings materials that look sensitive, stop using them and seek advice immediately.

Gathering Market Intelligence On Competing Companies: Data, Scraping And Confidentiality

Keeping an eye on competitors is smart. You can lawfully use public sources: websites, published reports, public filings, price monitoring tools and customer feedback. Be careful, though, with how you gather and use data.

• Confidential information and trade secrets: Don’t induce breaches of confidence or use information that was obviously obtained improperly. The Trade Secrets (Enforcement, etc.) Regulations 2018 protect business information with commercial value that’s kept secret.
• Web scraping and personal data: If your tools collect personal data (e.g., emails, names, user IDs), you must comply with UK GDPR and PECR. Provide a lawful basis, respect robots.txt where applicable, and avoid circumventing technical protections.
• Lists and leads: Buying lists? Check provenance carefully and ensure the seller had the right to share the data. Understand your obligations when trading in personal information.
• Supplier or partner insight: If you learn competitor information via suppliers or partners under confidentiality arrangements, respect those obligations. Consider using NDAs or appropriate non-circumvention clauses to protect your own commercial relationships when collaborating.

Have clear internal rules for market intelligence projects: define sources, data handling, approvals and legal sign-off. If in doubt, get advice before launching automated monitoring or enrichment tools that touch personal data or could capture confidential material.

Practical Steps: Build A Competition Compliance Programme

A simple, right-sized compliance programme will help your team compete confidently without crossing legal lines. Consider the following building blocks.

1) Train Your Team

• Run short, role-specific training for sales, marketing, category managers, procurement and leadership on competition law basics and red flags.
• Cover do’s and don’ts for trade association meetings, benchmarking, pricing discussions and recruitment.
• Set up a quick internal process for questions so staff can check before acting.

2) Introduce Clear Policies And Records

• Competition compliance policy: Plain-English rules about information sharing, industry meetings and market intelligence.
• Meeting protocols: Pre-approved agendas, minuting and a requirement to leave and record objections if sensitive topics arise.
• Document retention: Keep evidence of independent decision-making on prices, promotions and strategy.

3) Review Your Contracts

• Supplier and distributor agreements: Remove clauses that could create RPM or other anti-competitive restrictions; rely on RRPs and incentives that don’t fix minimum resale prices. Where needed, add safeguards that reinforce the customer’s freedom to set prices.
• Employment contracts: Include reasonable post-termination protections such as confidentiality and tailored non-solicitation; if appropriate, carefully drafted non-competes. Make sure policies and contracts align with your workplace confidentiality policies.
• NDAs: Use a Non-Disclosure Agreement when sharing sensitive information with potential partners, bidders or consultants.

4) Marketing And Advertising Checks

• Create a verification pack for any comparative claim, with clear methodology, date-stamped evidence and legal sign-off.
• Review ad copy for clarity of qualifications and to avoid implying affiliation with competitors’ brands. Keep watchlists for brand usage and keywords.

5) Pricing Governance

• Document your independent pricing rationale (costs, market research, strategic goals).
• Monitor promotions to avoid patterns that could be seen as signalling future pricing to competitors.
• Audit any algorithmic pricing tools for risks of unintended coordination.

6) Dawn Raid And Investigation Readiness

• Have a simple protocol in case of a CMA visit: who to call, how to cooperate lawfully and how to preserve documents.
• Keep an internal log of competition law incidents or queries and how they were resolved.

A little structure goes a long way. Clear training, sensible guardrails and good record-keeping make it much easier to show your decisions are independent and your competition is fair.

Key Takeaways

• Compete hard, but independently: UK law prohibits anti-competitive agreements (like price-fixing and market sharing) and abuse of dominance. Avoid sharing sensitive information with competitors.
• Be careful with pricing: never coordinate prices with rivals. Watch out for resale price maintenance and potential predatory pricing concerns if you hold market power.
• Market honestly: comparative ads must be clear, verifiable and not misleading; protect your brand with a registered trade mark and avoid false advertising risks.
• Recruit responsibly: don’t enter no-poach deals. Use reasonable post-termination protections, such as a targeted non-solicitation clause and, where justified, non-compete clauses.
• Handle data with care: gather competitor intelligence from lawful sources; respect confidentiality and trade secrets, and follow data protection rules when trading in personal information or scraping public sites.
• Put a compliance programme in place: training, policies, contract reviews, evidence of independent decision-making and a simple dawn raid protocol will help you stay compliant and scale with confidence.

If you’d like tailored advice on competing lawfully – from reviewing your supplier and distribution terms to auditing your marketing or restrictive covenants – you can reach us on 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.