Competition law prioritiesPrint publication
The Competition and Markets Authority (the CMA) is required, each year, to consult on, publish and lay before Parliament an annual plan setting out its main objectives, priorities and resource allocation.
The CMA published its Annual Plan of activities and priorities for 2015 to 2016 in March. It has identified the following six areas as its strategic focus for the coming year:
- conduct that leads to consumer exploitation;
- online and digital economy;
- technology and emerging sectors;
- regulated sectors and infrastructure markets;
- public service markets; and
- sectors that are important to economic growth and recovery, such as the retail and construction sectors and the creative industries.
Building on the work done in its first year, the CMA expects in 2015/2016 to improve further the performance of the competition and markets regime delivering benefits for consumers, businesses and the wider economy. It remains committed to its target of generating £10 of direct benefits to the consumer for every £1 it spends and to continue to put consumers at the heart of its work.
Cartel enforcement will remain a priority for the CMA. The CMA expects to conduct more investigations more quickly using is new powers and enhanced resources. It has already used its new compulsory interview powers and with new senior investigators, digital forensics and intelligence capabilities, it says it will open during this financial year as many criminal investigations as possible with at least one leading to prosecution. The CMA’s first criminal cartel case will come to trial on 1 June 2016 and is expected to last six to eight weeks.
The CMA says that it also intends to launch at least four new civil investigations under the Competition Act 1998 in the coming 12 months, and at least three consumer cases or projects.
The CMA’s two major market investigations into energy and retail banking remain a priority, given these sectors’ importance to the UK economy. In addition, the CMA will look to launch two to four new calls for information, market studies or market investigations in the course of this year.
The CMA will conduct an internal review of the use of the Merger Notice and interim orders in Phase 1 merger control investigations. It aims to start the statutory clock for Phase 1 merger review within, on average across all cases, 20 working days of a submission of a substantially complete draft Merger Notice (i.e. to speed up the pre-notification process). The CMA seeks to clear at least 60 per cent of mergers cases that are less complex (and therefore do not require an Issues Meeting and Case Review Meeting) within 35 working days. The CMA will also launch a review of the “exceptions to the duty to refer” guidance on merger control and Phase 1 remedies.
Partnership and Advocacy
The CMA is committed to working closely with the concurrent regulators (i.e. OFCOM, OFWAT, ORR, OFGEM, NIAUR, Monitor, the Civil Aviation Authority, the Financial Conduct Authority and the Payment Systems Regulator), encouraging them to use their competition powers (or risk losing them) and to complete Competition Act investigations within three years. Furthermore, the CMA will conduct two economic research projects and will publish a paper on vertical agreements in the online world.
Developing the CMA
In addition to the material increase in resources mentioned above, internally, the CMA is committed to embedding a common approach to managing projects across its portfolio.
What do the CMA’s plans mean?
The CMA’s plans for 2015/2016 highlight the strategic areas that it intends to focus on. The list is broad. Most of what is on the list will occasion no surprise. Companies in the sectors indentified above should ensure that they have comprehensive competition law compliance programmes in place in order to minimise the risks that may come from an investigation or market study in their sector.
The CMA has recently completed an investigation that an association of estate and letting agents, and three of its members, were infringing competition law. As well as the total fine imposed (of £735,000) the parent undertaking of companies involved, has undertaken to introduce competition law compliance programmes which include a commitment by senior management to, and accountability for, competition compliance. The fine was mitigated to reflect this. This is a clear indication that not only will the existence of an effective competition law programme help to reduce the risk of infringement in the first place, but it will be a factor taken into consideration if the worst does happen and employees, perhaps, within subsidiary businesses, are found to have acted in breach of competition law.
Walker Morris can help you establish and maintain an effective competition law compliance programme. Please contact us if you would like to find out more about how we can help you.