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.
Competition law in sports: CVC Capital and Six Nations Rugby
In March 2021, it was announced that CVC Capital and Six Nations Rugby had come to deal on a 14.3% stake in the Six Nations, for which it reportedly paid a huge £365 million. However, in the wake of this proposed agreement, the Competition and Markets Authority (CMA) saw fit to begin an investigation into whether or not the merger would provoke a decrease in competition within the market.
When major deals occur in any sector, it is natural and routine for the CMA to look into any potential changes to competition which may be caused, so the fact that a CMA investigation was triggered does not necessarily confirm that a breach of competition law has occurred, or that any action will be taken against the organisation under investigation. Such was the case for the CVC Capital deal, which was cleared by the CMA in July.
Nevertheless, it is worth considering why the CMA made the decision to investigate and how it came to its decision, as cases like this can give a valuable insight into how the competition regulator operates in the UK. It is also useful to look at cases like this from the perspective of competition law in sport.
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.