united-kingdom competition
Management fee increase
<p>My house comes with a covenant to pay a maintenance charge for some nearby land. Part of this charge is a fee paid to the managing agent for the service of doing the management.</p>
<p>This year they have stated that the management fee will increase by 5%. Their explanation was:</p>
<blockquote>
<p>All our management fees have increased by 5% this year, in line with other managing agents.</p>
</blockquote>
<p>The <a href="http://www.legislation.gov.uk/ukpga/1998/41" rel="nofollow noreferrer">Competition Act 1998</a> Section 2 says:</p>
<blockquote>
<p>[...] agreements between undertakings, decisions by associations of undertakings or concerted practices which—</p>
<p>(a)may affect trade within the United Kingdom, and</p>
<p>(b)have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom,</p>
<p>are prohibited unless they are exempt in accordance with the provisions of this Part.</p>
<p>(2)Subsection (1) applies, in particular, to agreements, decisions or practices which—</p>
<p>(a)directly or indirectly fix purchase or selling prices or any other trading conditions;</p>
</blockquote>
<p>Am I right in thinking that an increase above inflation &quot;in line with other managing agents&quot; is a &quot;concerted practice&quot; to &quot;fix selling prices&quot; and hence a violation of the law?</p>

<h2>No</h2>

<p>The prohibition is on competitors making an agreement to fix prices. Changing your prices to match your competition is not making an agreement.</p>

<p>No, if I understand your circumstances and the OFT's <em><a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/284396/oft401.pdf" rel="nofollow noreferrer">Agreements and concerted practices - Understanding competition law</a></em> (2004):</p>

<blockquote>
  <p>In considering if a concerted practice exists, the OFT will follow
  relevant Community precedents established under Article 81 [of the EC
  treaty]. The OFT will need to establish that the parties, even if they
  did not enter into an agreement, knowingly substituted cooperation
  between them for the risks of competition.</p>
  
  <p>The following are examples of factors which the OFT may consider in
  establishing if a concerted practice exists:</p>
  
  <ul>
  <li>whether the parties knowingly entered into practical co-operation</li>
  <li>whether behaviour in the market is influenced as a result of direct    or indirect contact between undertakings</li>
  <li>whether parallel behaviour is a result of contact between undertakings leading to conditions of competition which do not
  correspond to normal conditions of the market </li>
  <li>the structure of the relevant market and the nature of the product involved</li>
  <li>the number of undertakings in the market and, where there are only a few undertakings, whether they have similar cost structures and
  outputs.</li>
  </ul>
</blockquote>
