On 21 July 2015, the Competition and Markets Authority (CMA) published its first Annual Report and Accounts, which look back on the key work undertaken by the organisation throughout 2014/15.
In particular, the report reviews the enforcement work undertaken by the CMA and the work it has taken to extend competition frontiers. The report cites that in 2014-2015, 5 new Competition Act 1998 (CA98) civil cases were launched across a range of sectors, 83 mergers were reviewed, 3 regulatory appeals in the energy and water sector were opened and 2 of the largest market investigations into the energy and retail banking markets were undertaken. It also discusses the work done internally within the CMA to ensure efficiency, invest in new resources and improve processes. The CMA states that with more resources, and new or enhanced investigative and enforcement powers, it expects “a greater number of cases to come to conclusion during the next 12 months than were achievable this year."
The Annual Report is accompanied by an impact assessment report, which shows that the CMA (and OFT and Competition Commission) delivered direct financial benefits to consumers of £11.20 for every £1 of taxpayer money received over the past three years. This exceeds the 10:1 target set by government. Savings from market studies and market investigations amounted to £576.6m.
In addition, on 20 July 2015, the Department for Business, Innovation and Skills (BIS) and the CMA published a BIS consultation on the government's proposed new strategic steer to the CMA. The new steer outlines the government's strategic priorities for the CMA during this parliament.
The proposed steer focuses on promoting long-term healthy competition that will improve efficiency, productivity and outcomes for consumers. The CMA will be expected to have regard to the new steer during its activities but retains full independence in how it approaches its work, its selection of cases and the tools it uses to tackle them. The government states that it remains fully supportive of the CMA’s status as a strong, independent competition authority.
The government considers that in meeting its primary duty the CMA should ensure that dynamic competition is allowed to flourish, in order to increase productivity and sustain economic growth.
In particular, the CMA should continue to focus on:
- increasing consumer confidence to drive competition in the marketplace and increase the pressure on businesses to innovate.
- the impact new emerging markets (such as online digital market places and use of data) are having on competition, innovation and consumer choice. Key issues are likely to be the role consumer data is now playing in the market place and how to encourage effective competition in these new markets.
- removing barriers that prevent new start-up businesses or new disruptive business models from accessing or expanding in existing markets.
- promoting the importance of open and fair competition globally, to enable UK businesses to compete on a level playing field internationally.
- whether there are systemic barriers to sustainable competition that prevent long-term growth.
- ways to inject greater competition into markets for public services, where this has the power to improve delivery for consumers.
Comments on the steer are invited by 16 August 2015.