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Fuel retail market review in the UK – CMA
The Competition and Markets Authority (CMA) has announced that it is conducting an urgent review into the UK fuel retail market at the request of the government.
The review comes at a time with soaring inflation, a cost-of-living crisis and the prices at petrol pumps spiralling out of control. We are all being hit by the increased cost of living, and the government must do all it can to ensure that the people do not suffer and face further hardship.
We welcome the review that is being conducted by the CMA, and we urge the government to step up in supporting people and preventing prices from soaring even further out of control.
Mobile radio network services CMA investigation
The CMA has launched a market investigation into the mobile radio network services in respect of the infrastructure used by emergency services to securely communicate in Great Britain.
The investigation is looking into whether the current model and market for this niche industry works to achieve efficiency and cost-effectiveness in respect of the tax burden on the British treasury. Whilst an infrastructure system was reportedly established some 20 years ago on a long-term contract basis, given how bespoke the requirements of the system were, the CMA is looking into whether we are now in a time where other providers may be able to offer more cost-effective solutions.
CMA concludes study on electric vehicle charging market
Following its launch a while back, the Competition and Markets Authority (CMA) concluded its study of the electric vehicle charging market. It had been considering how competition could be encouraged, as well as assessing the measures that need to be taken to ensure that consumers receive a good service from this sector.
While the CMA often launches investigations where there are suspected breaches of competition law, it also conducts more pre-emptive research, anticipating how developments in certain sectors could affect businesses and consumers moving forward. Such inquiries often look to ensure that interested parties can speak out about any concerns, and to put together figures and statistics to create a picture of the market.
The assessment of the electric vehicle charging market is, of course, timely, given the growing availability of electric vehicles and the cost of petrol, although electricity prices are also surging. This is as well as the government’s goal of 2030 as the year in which petrol and diesel vehicle sales could be banned. In light of these developments, the CMA outlined steps which should be taken to enable the sector to function effectively in future.
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
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
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.
CMA investigation into suspected anti-competitive pharmaceuticals agreements
In late 2017, the CMA released a statement announcing that it had begun an investigation into suspected anti-competitive pharmaceuticals agreements between “various parties”.
The pharmaceutical companies under review were kept anonymous until 2019. Then, according to the CMA, they alleged that Alliance Pharmaceuticals, Focus, Lexon, and Medreich had reportedly made agreements to not compete in regard to supplying anti-nausea drug Prochlorperazine.
In January, the CMA published an update regarding their investigation, which was set to conclude in Autumn 2021. As the case approaches its end, we look back at investigation so far and assess the potential damage the anti-competitive agreements may have caused.
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 8th January 2021, which set a deadline for implementing remedial action by 17th 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.
CMA investigates COVID-19 package holiday cancellations
In March 2020, the Competition and Markets Authority (CMA) announced its launch of a taskforce to tackle the challenges faced by businesses and consumers during the coronavirus pandemic. As part of the taskforce, the CMA later launched an investigation into COVID-19 package holiday cancellations, which has now been ongoing since last summer.
The decision to launch the investigation was made by the CMA following reports that some package holiday providers had been withholding refunds, despite the fact customers were forced to cancel holidays due to lockdown restrictions either within the UK or abroad.
In our eyes, no customer could have foreseen the coronavirus pandemic, and it is important that consumers are protected in these exceptional circumstances. We hope that the CMA’s continued pressure on the travel industry will ensure that all customers receive the refunds that they could be entitled to.