Spotlight on...Scoping Risks
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Key themes for this year are likely to include:
- Public castigation: continued focus on high impact, consumer focused markets. The CMA aims to launch 10 new enforcement investigations (up from six last year) and at least four consumer protection cases or projects. Pharmaceutical drugs, price comparison websites, furniture parts and estate agencies have all been investigated by the CMA. Businesses that have consumer resonance, particularly those involving everyday goods and services, will continue to be very attractive targets.
- Vulnerable consumers: emphasis on markets involving vulnerable consumers, who will often lose disproportionately when competition is not working well. Suppliers of healthcare products to care homes and suppliers of mobility scooters have already been scrutinised by the CMA.
- Online and digital markets: companies that capture data about their customers will face more scrutiny as to how the data is used (particularly in the context of algorithms) and whether it creates an unfair advantage.
What does this mean for you and your business?
- First step: understand your business' regulatory risks. What are the risks in your sector, for your business and for you, and what is the business' risk appetite?
- Consider what you are doing today: is there a compliance policy/programme and training; who understands the areas and individuals who pose the greatest risk; do employment contracts and promotion/appraisal criteria incentivise unwanted risk-taking? What are your early warning systems within the business: for example, who is alerted when others in your sector are under investigation or when business units materially over or under perform?
- Work out what needs to be done to match your business' risk profile with its risk appetite so that it is the business you want it to be. That will include having an action plan for when things go wrong.
If you would like to discuss these issues please do not hesitate to contact us.