CMA welcomes government proposals on new powers

The proposed changes would see the CMA given power to declare companies in breach of consumer law, without taking them to court first, and levy fines accordingly.

They would also enhance the CMA’s competition powers, increasing their speed and effectiveness, while planned powers for the CMA’s digital markets unit include creating enforceable codes of conduct for the biggest tech firms.

The proposals from the Department for Business, Energy and Industrial Strategy (BEIS) include granting the CMA the power to determine whether consumer protection law has been broken and to take appropriate action, including fines, bringing its consumer protection law powers in line with existing competition powers.

This means the CMA can secure an end to a firm’s unlawful trading practices and, where appropriate, order refunds for people who have been left out of pocket by illegal practices. At present, the CMA can only achieve this by first bringing court proceedings or if suitable undertakings are voluntarily provided by the firm.

BEIS also plans to improve protection for consumers who buy goods and services online, for example by expressly banning the commissioning of fake reviews, and by strengthening the law on misleading subscriptions – such as those that trap people by masquerading as “free” or as a “special offer”.

In the digital market space, the CMA said the government’s proposal to provide the DMU – which is currently operating within the CMA in non-statutory “shadow” form – with the necessary powers to tackle problems in digital markets is a major, positive step towards better protecting consumers and supporting businesses.

“This is a significant milestone on the road to helping the CMA make markets work better for consumers and businesses,” said Andrea Coscelli, chief executive of the CMA.

“These changes will enable us to take swifter, stronger action against companies which break the law and to tackle tech giants whose market power is a threat, using DMU powers. The CMA will be able to respond more quickly and effectively to the many concerns raised with us about poor outcomes for consumers and small businesses in a number of UK markets.

“Firms that refuse to refund their customers – as has been the case with a number of holiday companies during the pandemic – could also face legal orders and hefty fines.”