House of Commons Business, Energy and Industrial Strategy Committee issues report

October 27, 2022

The House of Commons Business, Energy and Industrial Strategy Select Committee has issued a report about post-Brexit competition law.

It says that since 1 January 2021, following the end of the transition period, EU competition law has no longer been enforced in the UK, and the UK and EU now operate separate competition regimes. It believes that this offers a major opportunity as strong competition and consumer law will drive economic growth.

The new UK regimes will lead to a significant expansion in the roles and responsibilities of the Competition and Markets Authority. The Committee says that additional powers must be accompanied by additional accountability, and it will increase its oversight of the CMA in 2023. The increase in the CMA’s responsibilities and powers is likely to lead to a corresponding increase in its public profile and it says that the CMA should embrace that. The Committee encourages the CMA to be more proactive in explaining to the public how its work has delivered for consumers, both in its annual reporting and its press notices.

Divergence from the EU’s competition regime will introduce new compliance costs for UK businesses. Consequently, the CMA should supply the Committee with an assessment of the cost to business of trading in both the EU and the UK, and its impact on competition.

The Queen’s Speech announced a Draft Digital Markets, Competition and Consumer Bill. to promote competition, strengthen consumer rights and protect households and businesses. The Draft Bill is expected to increase the CMA’s consumer enforcement powers to tackle consumer detriment and to strengthen the CMA’s ability to fine businesses that abuse their market position, by reducing the minimum turnover threshold for immunity from financial penalties from £50 million to £20 million and imposing penalties of up to 10% of global and annual turnover where consumer protection laws are broken. The Committee welcomes these proposals but points out that there is as yet no sign of the Draft Bill.

The Draft Bill would also give the Digital Markets Unit, which has been established within the CMA in shadow form and which is working to operationalise the future UK competition regime for digital markets, the enforcement and other powers it needs to fulfil its role. Within digital markets there is strong evidence of abuses of market dominance which warrant intervention. The Committee encourages the CMA to investigate these instances closely and to collaborate internationally to promote further competition between digital firms. Meanwhile, it says that consumers and others are at risk. Therefore, the Draft Bill should be published without delay.