New competition authority to make markets work well for consumers, business and the economy
8 Apr 2014 10:47 AM
The Competition and Markets
Authority (CMA) started work last week as the UK’s primary competition
and consumer agency, with a vital role to play in helping stimulate economic
growth and innovation and ensuring consumers get a good
deal.
Bringing together the
Competition Commission (CC) with the competition and certain consumer functions
of the Office of Fair Trading (OFT), the CMA has a range of new
responsibilities and powers to ensure it meets its mission of making markets
work well for consumers, businesses and the economy. These include tighter
timetables for investigations, a stronger role in ensuring competition in
regulated sectors like financial services and energy, and a reformed legal
framework for prosecuting individuals involved in criminal cartel
activity.
In its first Annual Plan, the
CMA sets out its priorities and work programme. These focus on merger control,
market studies and investigations, and enforcement of competition and consumer
law. The CMA has already taken on a challenging programme of markets work in
key strategic areas such as banking, energy, payday lending and higher
education. It will now take on from the OFT and CC more than a dozen live
competition enforcement and consumer cases, over 30 merger cases and three
on-going Phase 2 market investigations.
The CMA’s mission is set
out under five strategic goals:
Deliver effective
enforcement
A first-class enforcement regime
is central to the CMA’s purpose and function. Targeted and effective
enforcement deters anticompetitive behaviour and builds a platform for greater
compliance and understanding of the law.
The CMA will use new resources
granted by the Treasury to take tough action against cartels and other
anti-competitive abuses that harm consumers, businesses and economic growth.
The new legislation grants the CMA stronger enforcement powers, including a
reformed legal framework to step up the search for and prosecution of cartels,
thereby strengthening the sanctions for anyone involved in illegal
price-fixing, market-sharing or bid-rigging.
The CMA also wants to help
businesses stay on the right side of the law, and so is establishing with
immediate effect a dedicated compliance team to provide guidance and
support.
Extend competition
frontiers
A key focus will be on examining
the role of competition in new and rapidly changing markets, or areas where
competition and markets have not previously been used to their full potential.
As part of this the CMA has today published its baseline annual report on the
‘concurrency’ arrangements which empower both the CMA and
individual regulators to apply competition law in the regulated sectors,
arrangements which are being enhanced from today.
The CMA has also today launched
a research project that will use ‘big data’ techniques to identify
sectors of the economy where online commerce is developing more slowly than
might be expected, so it can investigate whether this is because incumbents
have acted anti-competitively to block entry or innovation by online
competitors or innovators. Entrepreneurs and start-ups who consider they have
suffered anti-competitive behaviour are invited to share their experiences and
evidence with the CMA.
Refocus consumer
protection
The CMA will place the interests
of consumers at its heart and help ensure the newly redrawn consumer protection
landscape works effectively in their interests. The CMA will work closely with
its consumer protection partners, such as local authority Trading Standards
Services and the Citizens Advice Services, together with the sector
regulators.
As part of this, the CMA has
initiated a project to understand better how over-indebtedness affects
consumers’ decisions and choices in the goods and services that they
purchase, and whether the various UK consumer protection bodies should take
additional action in this concerning area of consumer detriment.
Over-indebtedness has been a prominent feature in several markets recently
scrutinised by the OFT or CC, including payday lending, personal current
accounts, and higher education, and is also affecting the consumption of basic
utilities such as energy, with a significant proportion of households suffering
fuel poverty.
Achieve professional
excellence
The CMA intends to undertake
every case, study and project it handles efficiently, transparently and fairly,
whilst ensuring that all legal, economic and financial analysis is conducted to
the highest international standards. The launch of a CMA Academy, providing top
quality professional training for all staff members, will be an important step
towards this.
Develop integrated
performance
The CMA aims to establish itself
as a trusted competition adviser across government, so that policy frameworks
are conducive to competition, and public purchasing benefits fully from rivalry
between bidders. It will also work closely with business, consumer, regulatory,
international and other organisations to achieve its goals.
As a key part of this, the CMA
will establish a network of consumer experts and representatives who can help
it understand closely consumers’ real life experiences in markets, so it
can spot issues and trends early and try to head off problems before they
become entrenched.
Furthermore, as a body for the
whole of the UK, the CMA is establishing a new presence in Wales and Northern
Ireland, building on the OFT’s existing office in Scotland. This will
help it remain closely connected to stakeholders in the devolved nations, and
to pay full attention to differences in market conditions across the
UK.
In a sp
eech at the European Consumer Summit in Brussels, David Currie, Chairman of
the CMA, said:
The establishment of the CMA
represents a significant evolution and strengthening of the UK’s already
well respected competition regime. The single most important measure of how the
CMA does its job will be the results that it achieves for consumers, and that
will remain the key focus for us in everything that we do.
Alex Chisholm, CMA Chief
Executive, said:
We want to help achieve a really
dynamic economy in which firms are competing hard to satisfy customers with
innovative and value-for-money products and services. We will use our powers,
resources and ingenuity to promote competition, empower consumers and strike
down illegal behaviour.
The new CMA strategy, structure
and legal framework will enable our highly professional staff to make
well-selected and impactful interventions for the benefit of consumers and
citizens across the UK.
Business Secretary Vince Cable
said:
Today is a significant day for
consumers as the Competition and Markets Authority begins work. It is a very
real demonstration of the major reforms this Government has delivered to
strengthen and streamline the competition regime, which has consumers at its
heart, and which will support economic growth. I look forward to it making an
impact.
Notes for
editors
- The CMA was established by the
Enterprise and Regulatory Reform Act 2013.
- The CMA’s Strategy, Annual
Plan, Prioritisation Principles and Guidance, which set out how the CMA will
operate, together with the Annual Concurrency Report 2014, can be read on the
CMA website:
- Media enquiries: