Public bodies as ‘undertakings’ in EU and UK competition law: economic activity test, functional approach, purchasing, social solidarity exceptions, case law and CMA guidance
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Practice notes
EU and UK competition law only applies to ‘undertakings’
These are economic entities engaged in supplying goods or services to the market on a commercial footing. For more detail on what counts as an ‘undertaking’ and what is meant by an ‘economic’ activity, see: Article 101(1) TFEU—the prohibition on restrictive agreements—the ‘undertaking’ concept. In many situations it is straightforward to see that competition rules attach to an organisation (eg a company or another commercial venture such as a partnership or a trading body). In other situations, notably where activities are undertaken by public sector bodies, the categorisation is less straightforward. Competition law polices the line between acceptable and unacceptable commercial conduct so that markets work properly and a level playing field is preserved, enabling all rivals to compete. This ensures that markets function adequately and that a level playing field is maintained for all competitors to compete. Accordingly, it is crucial to separate entities that are commercial in character from those that discharge public obligations or deliver purely charitable functions and therefore do not engage in conduct regarded as affecting the market in a manner that attracts the application of competition law. It is the definition of an ‘undertaking’ for...
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Web page updated on 21/05/2026
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