The CMA has announced a "timely shift" in how it intends to use its market intervention powers (which we have recapped at the bottom of this blog post), outlining plans for a more streamlined, proportionate, and predictable approach to tackling market problems that harm consumers and businesses.
In a blog post and strategy paper published on 24 July 2024, the CMA has laid out a set of reforms that it hopes will deliver greater impact, while reducing unnecessary burdens on businesses and improving confidence in the UK's regulatory environment. While the CMA does not propose any updates to the legal framework itself, it considers that a 'transformation' can be achieved through changes to its ways of working.
This is the latest in a series of proposals published that seek to embed the CMA's 4Ps framework (ie, the principles of Pace, Predictability, Proportionality and Process) at the core of its interventions, following other areas such as merger control, consumer protection and digital markets.
How is the CMA altering its approach?
Although the CMA considers its markets work has delivered results, it has acknowledged issues around speed, clarity and burden – concerns which are common across the business community. The CMA has stated it is also mindful of the need to ensure its markets work plays a greater role in supporting growth and innovation.
Here's how the CMA plans to update its approach by reference to the 4Ps:
1. Pace
The CMA has said it wishes to resolve market concerns more quickly, which could mean launching directly into a market investigation when remedies are clearly needed or using lighter-touch reviews where more appropriate. Internal KPIs, earlier sector engagement and roadmaps are among the tools the CMA plans to use to avoid unnecessary delays. It says that businesses should expect faster decisions and greater clarity on when and how issues will be resolved.
2. Predictability
The CMA has indicated it will improve transparency around its "strategic priorities" and case selection. The CMA will use roadmaps to outline key milestones and expected timing, and "state of play" updates (currently a feature of merger reviews) to communicate what concerns and remedies remain under consideration. The CMA hopes these changes will reduce the uncertainty that can deter investment when firms are subject to or anticipating scrutiny.
3. Proportionality
The CMA intends to prioritise cases with the greatest potential for harm, in a bid to limit unnecessary burdens.
When proposing remedies, the CMA has said it intends to engage closely with businesses to understand costs and ensure measures are targeted and proportionate. The CMA also intends to be more active in monitoring and removing older remedies that no longer provide consumer benefits, while including an expiry date in most orders to avoid outdated requirements.
The CMA is preparing to make use of its new power – introduced by the Digital Markets, Competition and Consumers Act 2024 – to trial proposed information remedies before full implementation. These trials are expected to be narrow in scope, to run concurrently when multiple options are being tested, and to conclude quickly.
4. Process
The CMA intends to make its process of engagement more agile, iterative and collaborative. Businesses will have more opportunities to speak directly with decision-makers – for example, through webinars, meetings and 'teach-ins' – which is also a growing feature in the context of merger control.
Sarah Cardell, Chief Executive of the CMA, states that these changes support the CMA's goal of a "markets regime that delivers real, lasting impact – supporting growth, building trust, and ensuring markets work better for everyone".
We expect that the spirit of the changes will be welcomed by the business community – with many commentators having voiced frustration about lengthy reviews, limited engagement, and disproportionate burdens when judged against the real-life impact of remedial action. However, only time will tell how meaningful and effective these 'transformative' plans prove to be.
What's next?
A consultation paper is expected in late summer 2025, offering stakeholders a chance to provide input on how the CMA's revised approach should operate in practice.
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A recap of the CMA's market intervention tools The CMA has three main tools for investigating and addressing competition concerns in markets, with varying levels of depth, formality, and statutory powers:
The CMA's stated approach is to select the tool based on factors such as complexity, urgency, expected outcomes, and the likely need for remedies. |
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