The Competition and Markets Authority (“CMA”) published its annual plan for 2021/22 on 23 March 2021. As a result of the COVID-19 pandemic, like the rest of the world, the UK has faced major challenges in the goods and services sector. Moreover, the CMA has taken on new responsibilities as the transition period out of the European Union (“EU”) comes to an end. Understandably, the CMA is expecting a significant increase in workload in the year ahead. The annual plan sets out the challenges that the CMA will face, as well as the CMA’s decisions with regards to the allocation of resource and project prioritisation.
FOUR KEY THEMES
In order to continue its commitment to promoting stronger competition and providing consumers with better protection in the midst of everything that is happening globally, the CMA has identified four particular themes to focus on, which are set out and explored in detail below.
Protecting consumers and driving recovery during and post-pandemic
In order to continue supporting the market competition in the UK and enhancing consumer protection, the CMA has put forward the following strategies:
- introducing punishments and deterrents against all attempts to fix prices, exploit market power and weaken competition – the CMA is already taking steps to remedy and prohibit anti-competitive mergers to tackle this specific problem;
- enforcing consumer protection law – to allow customers to feel safe and confident in making their purchases;
- introducing measures to encourage competition based on pricing, innovation and quality – to ensure that the interests of consumers remain the main focus in the market;
- assisting the government in the design and implementation of policies – to harness the benefits of competition without compromising consumers’ interests.
In particular, the CMA identified the need to protect vulnerable consumers from unfair trading and anti-competitive market behaviours and the urgency in promoting innovation, productivity and growth of the UK economy.
Unfortunately, there has been an increase in the number of consumers falling victims to market exploitation during and as a result of the pandemic. These consumers are mostly from lower-income households and unemployed, including older and medically vulnerable people. Despite having already set up a COVID-19 Taskforce to deal with consumers’ complaints regarding cancellations of holidays and weddings, the CMA continues to work to secure more refunds for customers and to open up investigations into the airline sectors, in order to remedy any breaches of the consumers’ legal rights. Moreover, the CMA is actively tackling any exploitation within the different sectors, including:
- launching market studies on children’s social care – to certify that local authorities are receiving the appropriate supply for the prices they pay;
- pursuing investigations in the online video gaming sector – to maintain fairness in automatically renewing contracts and loyalty penalties charges;
- working on cases within the UK pharmaceutical sector – to ensure both the NHS and consumers are not overpaying for essential treatments and medications.
In its continuous effort to promote productivity and growth in the UK economy, the CMA has refined its approach to merger assessments to prevent any potential anti-competitive conducts and breaches of competition and consumer laws. While the CMA is also committed to carrying out more investigation and imposing fines and penalties, including criminal prosecutions, on businesses and individuals who contravene such laws, it will only take action against corporations to the extent that is necessary and proportionate. Despite this, the CMA does not tolerate any attempts by businesses that may harm consumers’ interests.
The CMA places itself as a global competition and consumer protection authority
Whilst the UK exit from the EU poses certain challenges for the CMA, there are also many opportunities for it to redefine and claim its position as an international competition and consumer protection authority.
The CMA has already launched a number of antitrust cases and investigations into mergers with a global dimension that were previously only reserved to the European Commission, including the high profile investigation into Apple’s anticompetitive behaviour in relation to the distribution of apps via its AppStore in the UK.
Fostering effective competition in digital markets
The rapid emergence of digital markets is already shaping one of the most dynamic and innovative areas in the economy, as well as promising growth and productivity. As such, the CMA will continue to work closely with the government towards putting in place adequate regulations in digital markets.
A number of the CMA’s key recommendations have already been accepted by the UK government, including the establishment of a Digital Markets Unit, to which the CMA wishes to be given the power to enforce codes of conducts and intervene in order to spur further competition and innovation within the sector.
The pandemic has also brought an increase in online shopping, which strengthens the position of online retail platforms in the market. Greater enforcement of consumer protection law by the government is therefore required in this area.
Supporting the transition to a low carbon economy
Climate change is a growing concern not only across the UK, but globally. The UK is the first major economy to commit to a legally binding target of achieving net zero emission by 2050. To achieve this, the CMA has launched ‘green claims’, a project that investigates misleading environmental claims within the markets. Additionally, the CMA will continue to use existing tools to support businesses in engaging in environmental initiatives whilst ensuring competitiveness and innovation within the market. These include:
- launching a market study into electric vehicle charging in the UK;
- taking steps to understand the reasons behind businesses’ reluctance in partaking in environmental sustainability agreements;
- engaging in discussions with stakeholders, both on a national and international level, to learn about the ways in which competition and consumer law can support the low carbon economy;
- providing advice and support to governments on the impact of climate change and the effect of sustainability policies on consumers and competition; and
- collaborating with governments to ensure that climate change policy maximises the benefits of competition.
The CMA in the 2020s
The CMA set itself a number of goals in February 2020 for the decade ahead, which are:
- to better understand the markets and consumers;
- to be able to explain why competition matters and the CMA’s work and priorities by using a range of existing tools and channels to allow the CMA to raise awareness of the benefits of maintaining a competitive and well-functioning market; and
- to advocate for consumers’ interests and work with the government towards creating stronger but more flexible regimes to protect such interests.
This evidences the CMA’s commitment to tailoring its work to accommodate the needs of consumers in the UK.
For more information, and any guidance or advice on the CMA’s Annual Plan for 2021/22, Cleveland & Co External in-house counsel™, your specialist outsourced legal team, are here to help.