As the season for competition regulators to publish their annual plans is upon us, we look at the common themes across the UK Competition Network.
Four items stand out: competition in digital markets, dealing with the cost-of-living crisis, ensuring the resilience of markets and effecting upcoming legislative changes.
There is little surprise with this first item – competition in digital markets has been at the top of UK regulators' agenda for the past few years now. In addition to ongoing investigations in the sector (for example Google Ad Tech and Amazon's Marketplace), the FCA and Ofcom plan to make progress on their wholesale data market study, and cloud market study respectively (which Ofcom is currently proposing to refer for in-depth assessment). The FCA will also continue delving into the competitive impacts of Big Tech in financial services (off the back of its October 2022 Discussion Paper) and how digital consumer journeys impact decision making. Alongside this, regulatory cooperation under the Digital Regulation Cooperation Forum is set to continue – notably within its research workstream on algorithmic systems.
COST OF LIVING CRISIS
CMA, FCA, Ofcom, Ofgem, Ofwat, ORR, UKRN
With the current cost of living crisis, it is understandable for UK regulators to want to dedicate resources towards encouraging the delivery of key services at affordable prices and alleviating the impact of the crisis on consumers. For the CMA, this will mean acting in areas of essential spending and where people are under particular financial pressure, such as accommodation and care, as well as addressing pressure selling and false or misleading pricing practices. The CMA will also keep an eye on any anti-competitive behaviour with direct effects on public and household expenditure, including cartels in public procurement, and potential competition issues within UK labour markets.
CMA, FCA, Ofcom, Ofgem, UKRN
Resilience is becoming a hot topic across society and competition regulators have taken note. Four of them are planning to focus on this in two respects: the financial resilience of regulated companies and supply chains, and the resilience of regulated networks against security challenges (including cyber-attacks). While the FCA and Ofcom have extensive regulatory powers alongside their competition role to support them in this endeavour, it is interesting to see that the CMA is also keen to explore how competition can help foster resilience. Alongside its plans to be alert to strategically important markets where competition may not be functioning properly, putting the supply of essential goods and services at risk of disruption, the CMA has recently published a Discussion Paper on market resilience in the face of shocks or rapid structural change, and the CMA's role in this context.
DEALING WITH LEGISLATIVE CHANGES
CMA, FCA and ORR
In the wake of the Government's "Brexit bonfire of regulations" and broader legislative reforms, a number of competition regulators have been realistic in their annual plans in terms of the resources they will need to dedicate to effecting legislative changes. The CMA stands ready to implement the Government's CMA reforms introducing stronger competition and consumer law powers (including giving a statutory footing to the Digital Markets Unit). These were presented to Parliament on 25 April in the form of the Digital Markets, Competition and Consumers Bill (a copy of the Bill as introduced can be accessed here). Meanwhile, both the FCA and ORR are anticipating work to onshore/ adapt previously retained EU law legislation into UK law once the Financial Services and Markets Bill and the Retained EU Law Bill become law. Specifically, the FCA will need to update its Handbook, while the ORR will need to assess how to tackle rail health and safety rules in a post-Brexit world.