The CMA’s executive director – enforcement, Michael Grenfell, said that the catering equipment price fixing case formed part of a response to the government’s ‘strategic steer’ to the CMA last December, during his recent speech at the IFLR Competition Law Forum.
Last year the government directed the CMA to continue to focus on “developments in new emerging markets, such as online digital market places”.
According to Grenfell: “Digital markets are a significant, and growing sector of the economy, in 2014 representing 7% of UK total ‘gross value added’. More to the point, digital activities underpin almost all other parts of the economy. Digitalisation raises new, and difficult, antitrust issues – for example, about market definition, about how much one should allow lower-cost ‘online’ sales channels to ‘free-ride’ on the investments of bricks-and-mortar retail outlets, and about how one deals with the market power conferred by owning a digital platform.”
He also detailed how the CMA has taken steps to follow up on infringement decisions with “targeted activity involving the sectors concerned, including written materials and talks to trade associations and groups of relevant businesses”, citing: “The bathroom fittings and catering equipment cases highlighted the need for product manufacturers and suppliers to avoid resale price maintenance, particularly as regards attempts to prevent discounting on internet sales channels.”
The CMA’s focus in 2016 has also been steered by a National Audit Office report in February which acknowledged that the CMA had “strengthened processes with the aim of increasing the robustness of its work to legal challenge”, but said that “the regime faces big challenges in increasing the low number of enforcement decisions to date”.
And in July, the Global Competition Review survey of competition enforcement authorities worldwide said that 2015 was “a slow year for behavioural enforcement” at the CMA and that “the general verdict is that the CMA simply needs to do more in 2016”.
In response to this, Grenfell reported: “In the 5 years April 2010 to March 2015, we opened an average of 6.8 Competition Act cases a year. In the year since last November, we have opened 14 new Competition Act cases. And we are making real efforts internally to streamline our processes and make them more efficient – but always without compromising on fairness and rigour.”
He summarised: “CMA’s enforcement work – using public money to take enforcement action against anti-competitive practices that harm consumers – has two main purposes. First, it puts an end to the specific wrongdoing. Second, it has a wider deterrent effect: sending a signal to other businesses that such anti-competitive practices will not be tolerated (and will give rise to sanctions and liabilities) so that those other businesses are encouraged and incentivised to be compliant with competition laws.”