9th December 2016
On 2 December 2016, the Competition and Markets Authority (CMA) published a market study notice announcing that it has launched a market study into the care and nursing homes sector. The CMA’s statement of scope of the market study can be found here.
In its market study, the CMA will assess how people find the experience of choosing care homes, explore whether the current regulation and complaints system gives residents adequate protection, and examine how well care homes are complying with their obligations under consumer law.
The CMA is acting after reports of potentially unfair practices and contract terms being used by some care homes. It said it wants to use its market study to determine how widespread the concerns are, how residents are impacted and whether or not the practices and contract terms are likely to breach consumer law.
In light of the concerns set out above, the CMA is undertaking a market study to examine the care and nursing homes sector. The CMA’s market study will in particular look at:
The CMA has invited submissions from interested parties in writing by no later than 16 January 2017. It has also published guidance on how residents and relatives can inform it about a consumer protection issue with a care home.
The CMA has six months from publication of the market study notice to announce whether it intends to refer the sector for a more in-depth (Phase 2) investigation. It must publish its report within 12 months, setting out its findings and the actions if any it proposes to take.
Potential outcomes from this market study include referring the market to a CMA Panel for a detailed (Phase 2) investigation, accepting undertakings in lieu of such a reference, or recommending more robust industry self-regulation or government regulation.
If the CMA uncovers evidence in the course of the market study that suggests individual businesses may have breached competition law, it could take enforcement action against the business(es) concerned.
The market study represents an opportunity to influence future regulation. It also provides a means to raise any concerns that businesses may have as regards their ability to compete in the market and barriers to entry or expansion.
Market studies can be resource and time intensive for businesses involved. The CMA may issue information requests directly to suppliers in the market and will typically require a response within a few days. As noted above, the outcomes could be significant, including further detailed review of the market, possible regulatory reform or individual enforcement actions for suspected breach of competition law.
If you are interested in finding out more about this market study, or if you receive a direct communication from the CMA and wish to understand the implications of your proposed response, please contact Trudy Feaster Gee, Partner (Barrister) or Andrew Northage, Partner.