On 1 October 2021, we submitted our responses to the UK Government’s parallel consultations on Reforming Competition and Consumer Policy and A new pro-competition regime for digital markets. Views on these wide-ranging proposals will now be considered by the Department for Business, Energy & Industrial Strategy and the Department for Digital, Culture, Media & Sport respectively before Ministers decide on which proposals to take forward in legislation, which may be brought forward as early as Q1 2022.
In our briefing – Key issues for Business – we have drawn together the main points for businesses, particularly those which deal directly with consumers, to consider at this stage. These include the potential impact of more political direction in competition and consumer policy and enforcement, strengthened powers to investigate and intervene in business practices across the CMA’s toolkit and tougher sanctions on companies and individuals which breach competition or consumer protection rules, or don’t comply with information gathering powers. We also discuss the proposed new merger threshold, which is intended to capture a wider class of transactions involving parties with no direct competitive overlap, and the new “digital” mergers regime for businesses with “strategic market status”, as well as additional broader reforms of consumer law and further regulation for digital businesses.
Some of the more far-reaching proposals – particularly when assessing the competition and consumer and digital regulation proposals in combination – need further consideration, including how to weigh the benefits of preserving strong innovation and investment incentives for the UK economy and UK consumers with the costs and uncertainty associated with an increased risk of regulation and intervention for businesses. But, despite this, it is clear that the Government is committed to strengthening the CMA’s tools and legislating for more active enforcement across the board. Now is the time for businesses to assess the potential impact of these proposals and ready themselves for the Government’s next steps.