Navigating the regulatory landscape: The Competition and Markets Authority in 2024

In this new special blog mini-series, Fieldfisher Competition and Regulatory Partner Jessica Gardner will, with the help of competition specialists from her team, take you through key focus areas for the UK's Competition and Markets Authority (CMA) in 2024.

In this first edition, Jessica and Senior Associate Jonathan Peters take a look at their predictions for the CMA's enforcement agenda in 2024.

Our predictions for the Competition and Markets Authority's agenda in 2024

The CMA's enforcement agenda in 2024 will be shaped by concerns arising from the cost-of-living crisis, climate change and the accelerating technology revolution. 2024 will also see the most substantial extension in a generation of the powers available to enforce against breaches of UK competition and consumer law.

Our top five trends to watch out for this year are as follows:

1.         Big tech regulation

The Digital Markets, Competition and Consumers (DMCC) Bill promises to be the most significant overhaul to the UK's competition law regime since 1998.

The Bill establishes the UK's answer to the EU's Digital Markets Act, placing "pro-competitive" obligations on the largest tech firms to be overseen and enforced by the new Digital Markets Unit (DMU) within the CMA. These firms will be subject to upfront and bespoke conduct requirements – which could include, for example, requiring them to share data and make their services interoperable with third parties – and will face significant penalties for non-compliance.

The Bill is currently at Committee Stage in the House of Lords, and we expect it to come into force by the summer.

2.         A crackdown on harmful online practices

The DMCC Bill also addresses the issue of subscription traps and other unfair subscription practices, by introducing specific new consumer rights such as a requirement for businesses to simplify cancellation methods.

The Bill also seeks to introduce further consumer law measures targeting fake reviews, including obliging online platforms to take reasonable and proportionate steps to prevent access to these.

Finally, the CMA has committed to addressing misleading online sales practices (including through scrutinising businesses' use of online choice architecture and pressure selling tactics), which it considers could infringe both consumer and competition law.

3.         Serious sanctions for consumer law breaches

Although the CMA has investigatory powers under the current consumer law regime, it must rely on lengthy court proceedings in order to enforce against infringements.

Under the DMCC Bill, the CMA will be empowered to enforce consumer law directly for the first time, including through imposing financial penalties of up to 10% of annual global turnover.

The upshot is that breaching consumer law in the UK will carry far greater regulatory risk than ever before.

4.         A focus on cost of living issues

Along with other regulators around the world, the CMA is prioritising the investigation and punishment of businesses that have engaged in, what it calls, illegal labour market cartels that affect employees' pay packets.

Businesses that have shared information about contractor or employee pay rates, terms and conditions or other benefits, or which agree not to approach or hire each other's employees ("no poaching" agreements), could be in the firing line. The CMA has so far published short guidance for employers on unacceptable conduct, launched two investigations into practices in the TV production and broadcast sector, and expanded the scope of an existing investigation into the fragrances sector to cover potentially unlawful hiring practices.

More generally, the CMA has committed to act in areas of essential spending and where consumers are under particular financial pressure. Key sectors to watch will include:

1. Groceries. The CMA has already looked into unit pricing by retailers and food price inflation. Its latest focus areas are: loyalty scheme pricing, monitoring competition and profitability in the grocery market, and working with Government to amend the rules around unit pricing.
2. Accommodation. The CMA is due shortly to conclude its housebuilding market study, investigating potential market distortions and consumer harm in the supply of homes. We will provide further analysis on the housebuilding market study later this year, once the CMA has published its report. The CMA is also considering potential enforcement action in the private rented sector, focusing on "zero-deposit" schemes, sham licences, guarantees, potentially unlawful discrimination and exit and other event fees in retirement homes.
3. Fuel. Following the conclusion of its Road Fuel Market Study last year, the CMA has new powers to monitor fuel prices and report evidence of unjustified price increases to government.    
4. Healthcare. The CMA has singled out for potential enforcement private providers who fail to give clear and consistent information to patients regarding consultant fees and the performance of consultants and private hospitals. Enforcement against pharmaceutical companies for issues including excessive pricing of drugs and "pay for delay" arrangements also remains high on the CMA's agenda.

5.         Action on sustainability and climate change

The CMA continues to act against greenwashing practices by businesses (i.e. the making of false or overstated claims about a product’s environmental credentials). Any formal investigation for consumer protection breaches is set to carry a much higher risk given the CMA's proposed new direct enforcement powers (see 3. above).

Meanwhile, following publication of its guidance on the application of the Chapter I prohibition in the Competition Act 1998 to environmental sustainability agreements, the CMA's draft 2024/25 Annual Plan has reiterated its "open door" policy for businesses seeking to coordinate on sustainability initiatives (a minor exception to the general policy that businesses must self-assess the competition law risks of their actions). Watch this space for our analysis of the CMA's 2024/25 Annual Plan, once it has been published in final form later this year.

Our next edition in this mini-series will be published in February and will consider the latest case law on the CMA's powers to raid domestic premises.

If you would like to discuss any of the issues raised in this blog, please get in touch with our team.