Recommendations & Conclusions
30 items
1
Recommendation
Fourth Report - Post-pandemic economic …
Accepted
The CMA is highly regarded by many practitioners and stakeholders, including internationally. In particular, the calibre and expertise of staff has been commended throughout this inquiry. However, we recognise the concerns raised in our inquiry about the level of involvement of the CMA Board and the transparency of its decision …
Government response. The CMA outlines existing mechanisms for Board involvement in decision-making, reporting, and strategic priorities, and claims they are already addressing the need for more proactive engagement and transparency.
Department for Business and Trade
2
Recommendation
Fourth Report - Post-pandemic economic …
Accepted
In the context of the Government’s stated aim to drive higher economic growth, we believe the CMA could be doing more to help stimulate economic growth in the UK by conducting more market studies in key sectors of the economy and thinking more about the role of competition in driving …
Government response. The CMA states it already considers economic growth and productivity in its work, referencing its draft Annual Plan and prioritisation principles for market studies.
Department for Business and Trade
3
Conclusion
Fourth Report - Post-pandemic economic …
Acknowledged
The CMA is generally well regarded domestically. However, awareness of its work appears to be low in the UK, both amongst the public and amongst businesses. We agree that awareness of the CMA’s work and the value which it adds is necessary if it is to have credibility. We encourage …
Government response. The CMA agrees it is important to communicate effectively and is using press notices and news stories, the 2023/24 draft Annual Plan, and the consultation process to identify and engage with a wider range of stakeholders.
Department for Business and Trade
4
Conclusion
Fourth Report - Post-pandemic economic …
Acknowledged
The increase in the CMA’s responsibilities and powers is likely to lead to a corresponding increase in its public profile, as businesses and public authorities start to engage with it, or engage more frequently. We believe that would be beneficial and should be embraced by the CMA. We will play …
Government response. The CMA welcomes greater interest and scrutiny from parliamentary committees and is ready to engage and provide greater reporting.
Department for Business and Trade
5
Recommendation
Fourth Report - Post-pandemic economic …
Deferred
Whilst we support the increase in powers for the CMA, we also share the concern that there is insufficient oversight of the CMA and its performance. Additional powers must therefore come with additional accountability. This Committee will be undertaking more work on parliamentary oversight of the CMA, and other regulators, …
Government response. The government redirects concerns about intra-UK trade to the Office for the Internal Market (OIM), which is statutorily obligated to monitor the UK's internal market and provide annual reports.
Department for Business and Trade
6
Conclusion
Fourth Report - Post-pandemic economic …
Not Addressed
We are encouraged to learn that the CMA is satisfied that it has received adequate resources to deliver its post-Brexit responsibilities, and that it appears to have made a good start in achieving its aims. However, the incoming Chair and Chief Executive will face major challenges in managing its expansion …
Government response. The CMA welcomes the Digital Markets, Competition and Consumer Bill. The response then discusses concentration in manufacturing industries, international trade, and collaboration with overseas consumer protection authorities.
Department for Business and Trade
7
Recommendation
Fourth Report - Post-pandemic economic …
Accepted
Additional compliance costs will be incurred by businesses that trade in both the EU and the UK, assuming some degree of regulatory divergence over time. We therefore call on the CMA to conduct a short economic analysis, to be sent to this Committee no later than September 2024, assessing the …
Government response. The CMA has established a new micro-economics unit in Darlington and is creating a central market intelligence and horizon-scanning function to address consumer harms beyond COVID-19, which addresses the committee's request for economic analysis and its impact on competition.
Department for Business and Trade
8
Recommendation
Fourth Report - Post-pandemic economic …
Not Addressed
We believe that the non-binding nature of the CMA’s role when advising on subsidies which are referred to its Subsidy Advice Unit will be sufficient in the majority of cases. The Government should ensure that the CMA has the resources necessary for the Subsidy Advice Unit to advise public authorities …
Government response. The CMA supports the provision of effective and accessible ombudsmen services, and looks forward to the improvements that will be delivered by the Digital Markets, Competition and Consumer Bill. The Chartered Trading Standards Institute leads on ombudsmen and codes of …
Department for Business and Trade
9
Conclusion
Fourth Report - Post-pandemic economic …
Not Addressed
Public authorities will need to update their understanding of the rules of the new subsidy control regime when it comes into force in late 2022. This includes delivery of subsidies from the UK Shared Prosperity Fund, where public authorities will need to consider the new subsidy control regime rules.
Government response. The response describes CMA support for Online Dispute Resolution and Alternative Dispute Resolution in essential markets and work with international partners, but does not address public authorities needing to update their understanding of the rules of the new subsidy control …
Department for Business and Trade
10
Conclusion
Fourth Report - Post-pandemic economic …
Not Addressed
Although the UK Government has published further guidance on the implementation of subsides, there is still a lack of detailed information in several areas of subsidy control guidance, which may cause uncertainty for public authorities who will need to seek advice on the new subsidy control regime after implementing the …
Government response. The government's response discusses consumer law enforcement and the CMA's support for reforms, which is unrelated to the committee's conclusion about the lack of detailed information on subsidy control guidance.
Department for Business and Trade
11
Conclusion
Fourth Report - Post-pandemic economic …
Not Addressed
The UK Shared Prosperity Fund is designed differently to its predecessor EU schemes. How subsidies are allocated, therefore, is crucial to ensuring the most effective use of public funds.
Government response. The government response discusses transparency and accountability of digital regulators, the Digital Regulation Cooperation Forum, its workplan, and opportunities for further engagement. This does not address how subsidies are allocated under the UK Shared Prosperity Fund.
Department for Business and Trade
12
Recommendation
Fourth Report - Post-pandemic economic …
Not Addressed
However, public authorities are in limbo until the Government publishes final guidance on the subsidy control regime. The UK Government needs to end this uncertainty by following the Scottish Government, which published guidance in September 2022, and publishing final guidance without delay. Only then will public authorities be in a …
Government response. The government response discusses the CMA's strategic aims for its work in digital markets and ongoing activities, without addressing the need to publish final guidance on the subsidy control regime or end the uncertainty faced by public authorities.
Department for Business and Trade
13
Recommendation
Fourth Report - Post-pandemic economic …
Not Addressed
The Government should update the Committee within one year of implementation on the performance of the new subsidy control regime. (Paragraph 106) Consumer Policy
Government response. The CMA will continue to build the Digital Markets Unit, tackle market dominance and support the UK Government in its work to bring forward the Digital Markets, Competition and Consumers Bill.
Department for Business and Trade
14
Recommendation
Fourth Report - Post-pandemic economic …
Acknowledged
We therefore request that the Government gives an early indication of the extent to which it expects to use its power under Clause 17 of the Retained EU Law (Revocation and Reform) Bill as introduced, and of the likely volume and rate of flow of draft legislative reform orders, so …
Government response. The government discusses the Digital Markets, Competition and Consumers Bill and its benefits, but does not provide an early indication of the extent to which it expects to use its power under Clause 17 of the Retained EU Law (Revocation …
Department for Business and Trade
15
Recommendation
Fourth Report - Post-pandemic economic …
Not Addressed
Weak competition and consumer policy will lead to detriment for consumers and worse economic outcomes, particularly for the most vulnerable in society. We 50 Post-pandemic economic growth: state aid and post-Brexit competition policy encourage Ministers to build upon existing UK consumer law and to refrain from fundamental changes to it. …
Government response. Departments will prepare their responses to the REUL Bill individually and keep the Parliamentary Business and Legislation Committee advised. Updated guidance will be developed and shared at the appropriate moment, and the Government will give the BEIS Select Committee early …
Department for Business and Trade
16
Conclusion
Fourth Report - Post-pandemic economic …
Accepted
The COVID-19 pandemic has exacerbated the negative effects of weak competition in some industries for consumers. Consumers have increasingly experienced rip- offs and asymmetry of information.
Government response. The Government agrees with the Committee’s assessment and states they plan to strengthen consumer protection law through the forthcoming Digital Markets, Competition and Consumer Bill, provides funding to Citizens Advice, and supports consumer awareness campaigns.
Department for Business and Trade
17
Recommendation
Fourth Report - Post-pandemic economic …
Deferred
We commend the CMA for its COVID-19 Taskforce which was effective in improving consumer rights in several industries. However, we believe that this taskforce was disbanded prematurely. We ask the CMA to establish an horizon scanning unit that pro-actively engages on consumer law enforcement, as the COVID-19 Taskforce did following …
Government response. The CMA will be responding separately, deferring the response to a later date.
Department for Business and Trade
18
Conclusion
Fourth Report - Post-pandemic economic …
Deferred
We welcome the Government’s recent proposals to increase 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 annual turnover in instances where …
Government response. The CMA will be responding separately.
Department for Business and Trade
19
Conclusion
Fourth Report - Post-pandemic economic …
Acknowledged
We believe that lower thresholds and higher penalties are necessary so that bigger businesses which break the rules do not see financial penalties as a small business cost.
Government response. The government states its commitment to taking forward changes related to lower thresholds and higher penalties, and mentions that the Bill will be introduced in this Parliamentary session.
Department for Business and Trade
20
Recommendation
Fourth Report - Post-pandemic economic …
Acknowledged
We are concerned that the Draft Digital Markets, Competition and Consumer Bill is yet to be published, not least because a period of pre-legislative scrutiny is envisaged, and we therefore call on Ministers to publish the draft bill as soon as possible.
Government response. The Government is committed to introducing the Digital Markets, Competition and Consumer Bill in this Parliamentary session.
Department for Business and Trade
21
Recommendation
Fourth Report - Post-pandemic economic …
Acknowledged
We support the idea that there should be more accessible support for consumers across the UK. We encourage the development of ombudsman services, including in sectors not currently covered by an ombudsman, as an independent and trusted arbiter that consumers understand and can engage with.
Government response. The Government states that it is committed to taking forward changes, and that the Bill will be introduced in this Parliamentary session, regarding accessible support for consumers.
Department for Business and Trade
22
Recommendation
Fourth Report - Post-pandemic economic …
Accepted
Regulators and other relevant stakeholders should invest in better online arbitration systems that are quicker and cheaper, to speed up enforcement of minor consumer rights breaches. These investments should include better internal digital case management systems and other options for consumers who are unable to access online services.
Government response. The Government has committed to reform Alternative Dispute Resolution (ADR) by legislating to boost the quality and oversight of ADR services, particularly in non-regulated sectors and is exploring mediation in the civil justice system.
Department for Business and Trade
23
Conclusion
Fourth Report - Post-pandemic economic …
Acknowledged
We believe that UK consumers are experiencing significant consumer detriment as a result of the behaviour of a number of airlines. We agree with the Transport Committee that the CAA’s current powers are not adequate to protect consumers’ rights in the airline sector. (Paragraph 156) Post-pandemic economic growth: state aid …
Government response. The Government agrees that a well-functioning ADR system supports consumers and businesses, and is planning to improve the consistency and quality of ADR services by legislating to mandate accreditation of ADR providers and strengthening the monitoring framework.
Department for Business and Trade
24
Recommendation
Fourth Report - Post-pandemic economic …
Acknowledged
We support the Transport Committee’s recommendations in its UK aviation: reform for take-off Report of the 2021–22 Session, on the need for the Civil Aviation Authority to have the power to impose financial penalties on airlines which fail to refund customers when required to do so by law. We recommend …
Government response. The Government has committed to reform the CMA's powers as a priority in the Digital Markets Competition and Consumer Bill. Government will keep the case for extending similar direct enforcement powers to sectoral regulators under review.
Department for Business and Trade
25
Conclusion
Fourth Report - Post-pandemic economic …
Acknowledged
We acknowledge that the UK approach to digital markets regulation will be different to that of the EU. However, we welcome EU efforts to increase competition and ensure a level playing field for all digital companies. We support updates to EU law that include designating gatekeepers, setting rules for firms, …
Government response. The government has committed to reform the CMA’s powers as a priority in the Digital Markets Competition and Consumer Bill. Government will keep the case for extending similar direct enforcement powers to sectoral regulators under review.
Department for Business and Trade
26
Conclusion
Fourth Report - Post-pandemic economic …
Acknowledged
We agree with the recommendations of the Joint Committee on the Online Safety Bill and the House of Lords Communications and Digital Committee, that the Digital Regulation Co-operation Forum (DRCF) should have a more formal status and clearer lines of accountability, given the increasingly important role it plays in decision …
Government response. The government states that the UK and EU approaches to digital competition both seek to tackle many of the same issues, but the UK regime will be more targeted and evidence-based. The government believes it is important that regulatory approaches …
Department for Business and Trade
27
Recommendation
Fourth Report - Post-pandemic economic …
Acknowledged
However, we do believe that the Digital Regulation Co-operation Forum’s accountability arrangements need to be updated. Until such time as these arrangements are formally agreed, the DRCF should proactively report to this Committee about the delivery of its objectives and any key decisions that it takes.
Government response. The government acknowledges the importance of the Digital Regulation Cooperation Forum (DRCF) and its role in digital regulation, welcomes steps taken to strengthen external engagement, but stops short of mandating that the DRCF proactively report to the Committee about the …
Department for Business and Trade
28
Recommendation
Fourth Report - Post-pandemic economic …
Acknowledged
There are clear examples of market dominance in digital markets globally which have been well documented. We heard from witnesses, and during our visit to the US, strong evidence of abuses of market dominance which warrant intervention. We encourage the CMA to investigate these instances closely and collaborate internationally to …
Government response. The government acknowledges the role of the Digital Regulation Cooperation Forum (DRCF) and welcomes their work, including publications and engagement with stakeholders. They will continue to work with the DRCF and parliamentarians.
Department for Business and Trade
29
Conclusion
Fourth Report - Post-pandemic economic …
Accepted
Digital markets are global in nature. Therefore, many countries are required to work together to assess the risks and form an approach to tackle anti-competitive behaviour. We congratulate the CMA for its work on the Digital Markets Unit so far and its international leadership on this issue.
Government response. The Government believes the CMA has the funding it needs to carry out its functions and intends in the Digital Markets, Competition and Consumer Bill to provide powers for a levy on Strategic Market Status designated firms that partially recoups …
Department for Business and Trade
30
Recommendation
Fourth Report - Post-pandemic economic …
Accepted
Legislation is required if the Digital Markets Unit is to have the enforcement and other powers it needs to fulfil its role. We welcome the announcement in the Queen’s Speech that a Draft Digital Markets, Competition and Consumer Bill will be introduced, which will allow opportunities for scrutiny and improvement …
Government response. The Government believes the CMA has the funding it needs, and intends to provide powers for a levy on Strategic Market Status designated firms that partially recoups the cost of DMU activity in the Digital Markets, Competition and Consumer Bill.
Department for Business and Trade