CMA's Review Of Market Remedies Finds Breaches Across Several Markets

• Published date: 15 July 2020
• Subject Matter: orporate/Commercial Law, Anti-trust/Competition Law, Corporate and Company Law, Antitrust, EU Competition
• Law Firm: Reed Smith (Worldwide)
• Author: Ms Marjorie Holmes, Ross Mackenzie, Emma Weeden and Vaibhav Adlakha

At a glance

The Competition and Markets Authority (CMA) has recently taken action against companies that have not complied with market investigation orders and undertakings across a range of industries.

The CMA appears to be more actively enforcing against breaches of market investigation orders and undertakings - the remedies imposed by the CMA to address adverse effects on competition identified by it in its markets work.

The CMA has also indicated that in future it will publish a register of significant breaches; and it has requested additional powers from government so that it can fine firms that do not comply with final remedies.

With the CMA appearing to have increased its monitoring and enforcement action, it is as important as ever for companies subject to market investigation orders or undertakings to ensure that they continue to comply - even if several years have passed since the orders or undertakings came into force.

Introduction

The CMA has powers to carry out detailed examinations on markets where it has reasonable grounds for suspecting that competition is not working effectively in that market. This markets regime sets the UK apart from many other jurisdictions which have no equivalent powers to assess how well markets are working, although the European Commission is consulting on introducing an equivalent power at the EU level.

Where the CMA identifies that competition is not working properly in markets, the CMA can agree undertakings with companies or, after full market investigations, may impose orders to remedy the adverse effects.

The CMA has imposed remedies in a significant number of markets, ranging from obligations to provide consumers with information (for example in Payment Protection Insurance and Payday Lending) through to obligations to divest parts of a company's business in the most extreme cases, as occurred in the market review of BAA Airports.

Many of the remedies designed to ensure ongoing behavioural changes to improve competition last for many years, or are open-ended and continue until they are revoked by the CMA.

Monitoring and Enforcement powers

Since 2014, the CMA has been responsible for market investigations and the monitoring of remedies imposed by such investigations.

Under current rules...