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.
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, the CMA has no powers to impose financial penalties for non-compliance with undertakings or orders. The remedies are only enforceable by the CMA in civil proceedings, through actions taken in the courts. With the limited tools available to impose sanctions, the CMA is increasingly looking to 'name and shame' non-compliance.
The CMA has published 20 letters sent to companies in breach of market investigation orders and undertakings. A third of these letters have been sent out in the first half of 2020 – three in relation to breaches of the Retail Banking Market Investigation Order 2017; one to Tesco relating to breaches of the Groceries Market Investigation (Controlled Land) Order 2010, one in respect of a breach of the order imposed in relation to Payday Lending and two to banks for not carrying out annual reviews pursuant to the Payment Protection Insurance (PPI) Market Investigation Order 2011.
The CMA announced on 1 April 2020 its proposal to publish a list of all significant breaches of market remedies. It is clear that the CMA sees compliance with market investigations orders and undertakings as a priority, with its recent work indicating a number of instances of non-compliance, particularly several years after the fact when many personnel involved in the original market investigations will have moved on.
In February 2019, Andrew Tyrie, the Chair of the CMA, wrote to the Secretary of State for Business, Energy and Industrial Strategy, regarding reforms to the UK's competition regime. This included a request for powers to fine companies that do not comply with final remedies following a market investigation.
For companies that are subject to market investigation orders or undertakings, ensuring appropriate procedures are in place to ensure continued compliance should be of importance, as the CMA is actively monitoring breaches.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.