The UK Government is consulting on its proposed “strategic steer” for the Competition and Markets Authority (CMA).  The steer sets certain priorities the Government would like to see the CMA focus on during the current parliament.  In doing so, there is a clear emphasis on the use of competition policy as a driver for economic growth and innovation, including reducing regulatory barriers for business and ensuring openness in digital market places.

Strategic Steer

The UK Government had previously published a strategic steer in October 2013, ahead of the CMA assuming its powers in April 2014.  The original steer had been intended to be in place for the period between 2014 and 2017 but the UK Government has now proposed putting a new steer in place for the duration of the current Parliament. 

The proposed new steer focuses on three elements in particular:

  • Exploring markets where competition could deliver greater consumer choice and encourage more innovation and productivity Under this heading the CMA should consider consumer behaviour and actions, focus on developments in emerging markets such as online digital market places, remove entry barriers for start-ups, promote open and fair competition globally, explore ways to inject competition into public services, protect longer-term dynamic competition through the development of new business models and take up a leadership role with regulators that have competition powers.
  • Defending fair competition and enforcing antitrust rules fairly and effectively  This section of the steer asks the CMA to help businesses understand competition law and the requirements for compliance, to use a mix of powers, including the enhanced enforcement powers introduced by the Enterprise and Regulatory Reform Act 2013 to detect and enforce competition law infringements and to conclude enforcement cases swiftly.
  • Removing unnecessary regulatory burdens on businesses wherever possible Under this final heading, the CMA should examine its own practices to minimise burdens on businesses, partner with other regulators to use competition tools to enforce change in markets, build a strong dialogue with sector regulators in the UK and to make recommendations on the impact on competition of legislative proposals.

The steer also notes that the CMA has a clear mandate to look at government rules and regulations and to advise on any potential implications on competition.  Additionally, the government states that it will accept all published CMA recommendations unless there are strong policy reasons not to do so.  The steer now also notes that the government will respond to the CMA’s recommendations within 90 days, indicating steps it will take in response to recommendations or outlining reasons for not following the recommendation. 

Comment

One potentially interesting feature of the steer and competition policy more generally, both in the UK and across the EU, is the recognition of competition and free markets being a key driver for economic growth and innovation.  It potentially highlights a subtle shift in competition policy and its enforcement away from consumers and consumer welfare economics to take greater account of strategic economic outcomes in terms of productivity and innovation.  This is reflected for example in the focus on digital markets and reducing regulatory barriers for business. 

Whilst the steer is an entirely non-binding document, the CMA being an independent non-ministerial department performing its functions on behalf of the Crown, it clearly does have weight within the wider context of the CMA’s overall accountability framework, which includes a statutory requirement to present its annual plans to Parliament and to provide BIS with an annual report on its activities and performance during the year. 

The consultation closes on 16 August 2015 and is available here.