The CMA's 2024/2025 Annual Plan: Cost of living, net zero and digital markets

On 14 March 2024, the Competition and Markets Authority (CMA) published its Annual Plan for 2024/2025. It puts at its centre the CMA’s desire to promote positive outcomes for people, business and the UK economy “in the face of a more volatile, economically challenging and technologically disruptive environment for all.” In advancing this goal, the CMA set out three broad priorities:

• boosting confidence in “getting great choices and fair deals” through deterring anti-competitive behaviour
• promoting competitive, fair-dealing businesses and innovation by enabling open access markets and promoting emergent sectors
• helping the growth of the UK economy, including through accelerating the transition to net zero (very key considerations in the view of the authors given the economic and environmental challenges facing us today)

 

Strategic focus

The CMA says it did not conceptualise these priorities in a vacuum. Instead, it says it has taken a serious look at the needs of the UK economy against the wider global socio-economic background:

“People and business continue to grapple with the higher cost of living and cost of doing business, cumulative inflation pressures, and a higher cost of debt…against a backdrop of stagnating productivity, pervasive debt, global geo-political and military conflict, and a deteriorating climate.”

These concerns translate directly into the areas that the CMA plans to prioritise those that it sees as most important to people, such as:

• getting about and travelling
• caring for ourselves and others
• having somewhere to live
• feeding ourselves and our families
• learning, playing and socialising

These build on the CMA’s work over recent years, including market studies in relation to housebuilding, private rented housing, veterinary services and road fuels.

Looking ahead, our view is that we may see these trends continue through an increased focus on market studies and ex ante enforcement focused on particular industries, bringing in a wide range of market players; as opposed to traditional ex post investigations and infringement decisions focusing on specific, named parties.

 

Digital markets

In addition to the focus on socio-economic issues, the Annual Plan also emphasises the CMA’s increasing responsibilities and interest in digital markets, largely driven by the progression of the Digital Markets, Competition and Consumers Bill. This will increase the CMA’s ex ante powers through the implementation of a consumer protection based administrative enforcement model.

More widely, the CMA recognises that digital markets – as innovative and transformative markets in a developing regulatory space – carry great potential for anti-competitive consumer concerns to arise. This leads to a real opportunity for the CMA to intervene and shape markets. In particular, the CMA notes that it intends to focus on consumer protection regarding harmful practices in:

• online choice architecture and misleading pricing
• access to cloud services, e-commerce and digital advertisements
• anti-competitive reinforcement or extensions of market power
• the development and deployment of AI foundation models

This prioritisation sits consistently alongside the continued focus of the European Commission on digital markets, including with the implementation of the Digital Markets Act in 2022 and the Commission’s recent non-compliance investigations against a number of tech companies for various alleged failures to comply with the DMA.

 

Key takeaways and risk mitigation

In the authors’ view, the Annual Plan clearly places consumer protection and legal compliance at the forefront of the CMA’s priorities for the upcoming year. As a result, companies in the following areas should take particular care in complying with their competition law obligations:

• emerging markets with the potential for rapid and significant growth – particularly digital markets and the energy transition sector
• markets which appear to have stunted innovation and productivity gaps
• markets which over rely on a limited number of suppliers, or where anti-competitive behaviour or low competitive forces could disrupt the supply of essential goods or services – such as core consumer facing commodities and services which are necessary for the health, safety and welfare of the public. Examples of these are food, water, fuel, gasoline, housing, shelter, transportation, healthcare goods and services, pharmaceuticals, medical supplies, and personal hygiene

To address risks, companies should (as always) ensure they:

• implement effective competition law training and policies for employees at all levels
• review key contractual terms and conditions for potentially anti-competitive behaviours or effects
• review interactions with third parties such as competitors and customers