Category: Consumer Law

Social media endorsements – CMA investigations

For several years, the CMA has been investigating social media endorsements to make sure that vital competition and consumer laws in the UK and not being broken.

Given the prevalence of social media, particularly in respect of it being used for marketing and advertising these days, it is vital that people know when they are seeing advertisements and products and services being pushed for recompense by influences. There have been many questions as to whether it has been clear enough that people know they are being advertised to as opposed to simply being recommended a product, which is the real focus of the CMA investigation.

Private healthcare market competition investigation

The private healthcare market investigation that has been ongoing for over a decade is a matter that has seen a recent update published by the UK’s CMA, the Competition and Markets Authority.

Private healthcare is a particularly sensitive industry in relation to competition law, and it is one that must be monitored carefully to make sure that patients – i.e. consumers – can make the best choices for them. In this latest update from the CMA, it has been suggested that there is still much more work that needs to be done.

CMA investigation into Education Software Solutions Limited

First published by Author on November 08, 2022 in the following categories: Consumer Law Education Industry Market Dominance Abuse and tagged with cma | competition law | investigations | market abuse

The CMA is reportedly conducting an investigation into Education Software Solutions Limited (EES), looking into whether the company might be abusing a dominant market position in respect of changes to contracts.

The investigation that commenced earlier this year is still in the initial phases, and we are currently tracking updates and are potentially looking at the initial investigations being concluded toward the end of this year. The CMA has already had to extend its initial period of investigation due to the requirement to analyse additional information, so it may be that further time will still be required.

It goes without saying that, if the CMA concludes that a breach of competition law has taken place, swift and decisive action will need to be taken. As things stand, we do not yet know whether this is the case or not.

Suspected unfair pricing investigations

It is important for the CMA to look into incidents of suspected unfair pricing to ensure that consumers are not being overcharged and taken advantage of.

This can particularly be the case in relation to medication costs of which the CMA has looked into a number of issues about the NHS being overcharged, and we will provide an update of an example in this article.

Broadly speaking, it is important that pricing is set at fair levels and that companies are not taking advantage of consumers to drive their profits up in an obscene manner. At the same time, competition must be required to allow pricing to be set competitively as well.

CMA investigates fake online reviews on Amazon and Google sites

The Competition and Markets Authority (CMA) previously announced that it had begun an investigation into potentially fake online reviews which may exist on major websites and online marketplaces. It is understood that there may be concerns that businesses are not doing enough to monitor and take down misleading reviews, and that some could be benefiting from them.

Since the birth of online shopping, consumers have been afforded a huge breadth of choice when buying products or services, and all in an easy way. However, the internet also comes with risks for consumers, with many scammers and disreputable businesses trying to take advantage of the faceless nature of online shopping, hiding behind a screen as they attempt to convince unsuspecting consumers to make purchases.

The existence of fake online reviews is one of the major downsides to online shopping, posing a difficulty for consumers as authenticity can often be hard to assess accurately. It is, therefore, important that businesses appropriately oversee online reviews and remove the fake ones, or they could be unfairly profiting from the deception of customers.

Electronic drum sector appeal denied by Competition Appeal Tribunal

First published by Author on April 06, 2022 in the following categories: Consumer Law Industry Investigations and tagged with cma | competition law | consumer law | investigations | musical instruments

Following an investigation by the Competition and Markets Authority (CMA) into alleged anti-competitive practices in the electronic drum sector, the Competition Appeal Tribunal previously rejected an appeal made by musical instrument company Roland. Roland had reportedly taken issue with the nature of a fine that it had previously agreed to pay.

As part of the settlement of the CMA case, Roland had been fined £4m for reportedly breaching competition law. As a result of the failed appeal and Roland’s reported breach of the settlement bargain, the fine was understood to have been increased to £5m.

The judgement made by the Competition Appeal Tribunal (CAT) showed it is not inclined to be lenient towards companies found guilty of breaking competition law. As advocates of consumer rights and fair business, we believe it is vital that organisations are punished accordingly if they break the law, and the CMA’s fines can have a powerful dissuasive effect on companies upon which they are imposed, and on companies in general. The upheld decision in the electronic drum sector case seems to be, therefore, a positive move by the CMA.

Energy licence modification appeals

First published by Author on March 02, 2022 in the following categories: Consumer Law Industry Investigations and tagged with cma | competition law | consumer law | investigations

Last year in March 2021, nine companies appealed to the Competition and Markets Authority (CMA) against Ofgem’s changes to energy licences. A price control decision made by Ofgem in December in the previous year resulted in changes to the prices that energy companies could charge to customers. As the energy licence modification appeals progressed, permission to appeal was granted and hearings were set for later in the 2021 period.

This case was not the first time Ofgem’s policy changes have been met with opposition from energy companies, with several energy companies participating in another appeal against the gas and electricity regulator, which concerns its changes to transmission charges.

As the competition regulator, the CMA can give a final decision on the energy license modification appeals once all matters have been considered. A final order was subsequently published at the end of last year, and you can read the relevant information and outcomes here.

Most favoured nation clause example: ComparetheMarket fined £17.8m

Last year, the Competition and Markets Authority (CMA) published the details of its full decision having fined ComparetheMarket £17.8m for reportedly breaching competition law. The investigation that had been concluded by the UK’s competition regulator led to the finding that the famous price comparison website was said to have broken the law by including a most favoured nation clause in some of the contracts it had with home insurance providers.

Over the course of December 2015-December 2017, ComparetheMarket is said to have used the clause to retain its domination of the comparison website market. The knock-on effect may have been the prevention of healthy growth of its competitors and possibly restricting customers from finding better deals on their home insurance.

Designed to empower consumers to find bargains in a crowded and confusing market, price comparison websites should be on the side of their users. This is why it was concerning that ComparetheMarket had been restricting competition seemingly for their own gain. The enforcement action taken by the CMA hopefully helped to restore competitiveness in the digital price comparison market, and is a real example of where the most favoured nation clause can lead to problems for competition law.

Digital Markets Taskforce

First published by Author on December 01, 2021 in the following categories: Advertising Consumer Law Digital Industry Latest and tagged with cma | competition law | consumer law | digital | online

Many businesses have made great leaps in their development due to technology, and the CMA’s (Competition and Markets Authority) Digital Markets Taskforce was created to investigate how competition could be regulated in a way befitting of the digital age. Asked by the government to carry out an advisory report, the CMA look to have made good on this goal, having published their findings and recommendations in December last year.

The revamped approach to digital firms will hopefully promote fair competition and reaffirm the rights of consumers, two of the key principles that must be there to ensure for fair competition. Both can be essential to ensuring a level playing field, and any failure in respect of these principles could constitute a breach of competition law. Breaches of competition law can often be very bad for the consumer, so the work of the CMA and other regulators is vital.

Final report published by CMA on funerals competition investigation

The CMA has finally published their concluding report on the funerals competition investigation which has been ongoing for several years, after it began in June 2018. Revealed to the public in mid-December, the report set out a series of suggested “sunlight remedies” to be applied in the funerals market sector.

These remedies are designed to empower consumers further when it comes to selecting funeral services, and to ensure that the sector remains under scrutiny following the investigation. The Remedies Implementation timetable was also published as of 8^th January 2021, which set a deadline for implementing remedial action by 17^th June 2021.

While there has been no action taken or fines issued as a result of this investigation so far, the CMA’s concerns for the funeral industry remain significant. As believers in fair competition, it is important that regulators work hard to make sure that business practices are fair for companies and customers. We believe that the thorough investigation has demonstrated strong support for the rights of the consumer in this industry.