Source · Select Committees · Business and Trade Committee
Recommendation 6
6
Not Addressed
We are encouraged to learn that the CMA is satisfied that it has received adequate...
Conclusion
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 and in the recruitment of staff in specialist fields, on which the CMA depends heavily. We look to support the CMA in its efforts to carry out its new responsibilities. (Paragraph 54) Post-pandemic economic growth: state aid and post-Brexit competition policy 49 Competition and Subsidy Control
Government Response Summary
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.
Government Response
Not Addressed
HM Government
Not Addressed
The CMA welcomes the announcement in the Chancellor’s Autumn Statement that the proposed Digital Markets, Competition and Consumer Bill will be brought forward in the third session of Parliament. That legislation would considerably strengthen the UK’s consumer protection frameworks, in particular by introducing civil fines for traders that infringe consumer protection law and by giving the CMA administrative enforcement powers. 10 Looking at a sample of manufacturing industries, the CMA’s 2022 State of Competition report found that concentration (an indicator of the strength of competition) is generally lower after accounting for international trade. 11 An overview of the theory and empirical evidence on the economic effects of international trade can be found in UK Trade Policy Observatory (2019), Winners and losers from international trade: what do we know and what are the implications for policy? The CMA’s 2015 paper Productivity and competition reviews the literature on the relationship between competition and productivity 12 See, for example, Freeman et al (2022), UK trade in the wake of Brexit, CEP discussion paper 1847 (“We estimate that the new TCA trade relationship led to a sudden and persistent 25% fall in relative UK imports from the EU. In contrast, we find a smaller and only temporary decline in relative UK exports to the EU, but nevertheless a large and sustained drop in the extensive margin of exports, driven by the exit of low-value relationships.”) 13 See, for example, OBR (2022), The latest evidence on the impact of Brexit on UK trade: The UK […] appears to have become a less trade intensive economy, with trade as a share of GDP falling 12 per cent since 2019, two and a half times more than in any other G7 country. 14 OBR, Economic and Fiscal Outlook – November 2022, para 25 15 See, for example, CMA, The State of UK Competition Report – April 2022, paras 3.61 et seq 16 Post pandemic economic growth: State aid and post-Brexit competition policy: Government Response The CMA already collaborates with sector regulators to a significant extent in relation to the concurrent consumer and competition law powers that the CMA shares with other sector regulators. A specific consumer concurrency group meets regularly in relation to consumer law matters, and allows for detailed discussions about emerging areas of detriment and the consideration of joint working. The CMA also collaborates directly with sector regulators on key consumer law matters, for example in relation to recent issues with flight and holiday cancellations (in the wake of staff shortages, and previously during the COVID-19 pandemic), issuing joint guidance with the Civil Aviation Authority. Internationally, the CMA collaborates extensively with overseas consumer protection authorities through its membership of the International Consumer Protection and Enforcement Network (ICPEN), where it leads and participates in a number of joint projects, including work to tackle misleading green claims, platform liability and online choice architecture. The CMA participates as an observer in the UK Regulators’ Network (UKRN), which brings together a wider range of regulators and provides a forum for collaborative work on areas of common concern. Recently, this has included work on cost of living issues, among other areas. The CMA is also responsible for the UK Competition Network (UKCN), which comprises all the UK authorities with concurrent competition powers. The UKCN meets regularly to discuss areas of common interest and the CMA also has regular bilateral engagement with each of the concurrent regulators.