Government publishes response to consultation on reform of competition and consumer policy

 

Government publishes response to consultation on reform of competition and consumer policy

 

The Department for Business, Energy and Industrial Strategy (BEIS) has published the government's response to the July 2021 consultation on reforming competition and consumer policy.

The government has decided to implement a number of reforms.  My ‘top 10’ are the following:

(1)   Requiring the Competition and Markets Authority (CMA) to produce regular reports on the state of competition.

(2)   Introducing a statutory duty of expedition for the CMA in relation to its competition and consumer law functions including in relation to the new digital markets regime.

(3)   Improving procedures for market inquiries including more opportunity for binding commitments to be accepted, greater flexibility to define the scope of market investigations, and removing the requirement to consult on a market investigation reference within the first six months of a market study.

(4)   More flexible and versatile remedies in market investigations.  The CMA will be able to require businesses to amend remedies in a 10-year period following its finding of an adverse effect of competition.

(5)   Reforms to the merger regime including:

a.     The turnover threshold for qualifying mergers will be increased to £100 million and there will be a safe harbour for mergers between small business (with UK turnover below £10 million).

b.     A new threshold to enable the CMA to investigate mergers where at least one party has a UK share of supply of 33% and has UK turnover of more than £350 million will also be introduced.

c.      Allowing commitments to be given earlier during Phase 2 and introducing an automatic fast-track referral procedure.

(6)   Competition Act investigations:  Reforms will include adjusting the territorial scope of the Chapter I prohibition, granting the CMA new evidence gathering powers, changing the standard of review for interim measures, introducing a new statutory framework for confidentiality rings and reducing the turnover threshold for immunity from financial penalties for breaches of the Chapter II prohibition.

(7)   Administrative penalties:  Tougher financial penalties for failure to comply with an investigation and new civil penalties for non-compliance with CMA orders, undertakings or commitments.

(8)   Stronger powers and tools for international co-operation will also be introduced.

(9)   Algorithms:  The CMA will have new powers to test and verify whether the use of algorithms by companies complies with competition law.

(10)                   Giving the Competition Appeal Tribunal (CAT) the ability to grant declaratory relief and returning to the courts and CAT the discretion to award exemplary damages for breaches of competition law.

The government has decided at this time not to amend the standard of review for competition appeals.

 

https://www.gov.uk/government/news/new-rules-to-protect-consumers-hard-earned-cash