https://competitionandmarkets.blog.gov.uk/2016/12/09/promoting-competition-bulletin-the-cmas-update-on-our-work/

Promoting Competition bulletin: the CMA's update on our work

Andrea Coscelli
Andrea Coscelli

In this year's annual plan, we said we would step up the pace, scale and impact of our enforcement, as an important part of our mission to make markets work well for consumers, businesses and the economy.

Stepping up enforcement

You can already see this in the number of new cases we’ve opened. We’ve opened 16 new Competition Act cases since November 2015, compared to an annual average of fewer than 7 new cases in the 5 years to March 2015.

Launching new cases is important, but we’re also seeing them through to successful conclusion. Having imposed fines totalling £48 million in 4 cases so far in 2016, we have now fined Pfizer and Flynn Pharma a total of nearly £90 million for charging excessive and unfair prices to customers, including the NHS, for an anti-epilepsy drug. We have taken on a number of pharmaceuticals sector cases, where it’s very important for patients and taxpayers that firms don’t engage in anti-competitive practices or abuse dominant market positions.

We’re adding to the impact of our enforcement with carefully targeted communications. We followed up our fines in the bathroom fittings and catering equipment cases by publishing a package of materials on resale price maintenance, explaining that it’s generally unlawful to impose or agree to minimum retail prices. We also built on our posters and frames case, working with online marketplace providers to help make suppliers aware of the need to avoid price co-ordination and other anti-competitive collusion.

And in a significant development, the managing director of the online poster supplier that was fined in that case has been disqualified from acting as a director of any UK company for 5 years – the first ever competition disqualification.

You can read more about the progress we’ve made in our enforcement of competition and consumer law in a recent speech by our Executive Director – Enforcement, Michael Grenfell.

Making markets work well

We’ve launched 2 new market studies, one into digital comparison tools and one, just last week, into care homes. The need to choose a care home can come at a distressing time, and our study will assess how people find the experience, explore whether the current regulation and complaints system gives adequate protection, and examine how well care homes are complying with existing consumer law obligations.

August saw the final report in our retail banking market investigation, paving the way for an ‘open banking revolution’. We’re now well underway in implementing our remedies in this and the energy market investigation, 2 of the biggest inquiries ever undertaken by a UK competition authority.

The full and enduring impact of the investigations in these vital markets will become evident over time, ensuring a competitive deal for these essential services. As well as measures to open up greater competition over the long term, our interventions will ensure that some of the hardest-pressed households in the UK are protected, by capping charges for prepayment energy customers and requiring banks to set monthly maximum charges for unarranged overdrafts.

Let us know what you think about our priorities for the year ahead

We’ve just launched our consultation on the CMA’s 2017/18 annual plan. Now over halfway through our third year, and following a thorough review, we believe that the strategic track we’re following remains broadly the right one.

Ensuring that people get a fair deal when buying goods and services remains central to our role. Next year, we propose to further step up our enforcement, to ensure consumers are protected from unfair or illegal practices, to use our powers to support the UK’s economic growth, and to improve our efficiency and effectiveness.

We’d really welcome your views on our draft priorities. Our consultation closes on 15 January 2017.

The changing world

Like many organisations in the UK, both public and private, the CMA’s future role and priorities are characterised by a degree of uncertainty – particularly so at present.

We don’t yet know the nature of the UK’s exit from the EU. The implications for the competition and consumer protection regimes, and the CMA, will depend upon the outcome of the exit negotiations and the terms of the future relationship with the EU. We’re helping the government to understand how exit from the EU could affect the competition (including enforcement, mergers and markets) and consumer protection regimes, as well as identifying the main priorities for these regimes going forward.

The government is also developing a new industrial strategy, which may have a bearing on our work. We therefore made a formal submission to the Department for Business, Energy & Industrial Strategy Select Committee’s inquiry in September, to explain the importance of an effective competition policy and competition-based merger control in any industrial strategy.

Whilst these developments unfold, we’ll continue to carry out our duties under our existing legislative framework, to the highest possible standards. There’s much to do. The CMA wishes you a successful December and a relaxing festive season.

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