Government set to boost powers of competition watchdog

Written by Nicholas Mairs on 18 June 2019 in News
News

Theresa May announces boost to powers of Competition and Markets Authority to improve protection for consumers

Powers boost comes as CMA plans move to Canary Wharf Photo: PA

Britain’s competition watchdog will be handed the power to fine firms which “mislead” and overcharge consumers, Theresa May has announced.

Under new rules the Competition and Markets Authority (CMA) will be able to punish businesses which they deem to have broken consumer law directly rather than having to take the matter through the courts.

Ministers said the move would make it easier for the non-ministerial department. to combat “exploitative” practices such as the loyalty penalty, subscription traps and unfair cancellation charges.


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May said: “For far too long, many big companies have been getting away with harmful trading practices which lead to poor services and confusion among customers who have parted with their hard-earned cash.

“The system as it stands not only lets consumers down but it also lets down the vast majority of businesses who play by the rules.

“It is high time this came to an end and today we are confirming our intention to give much stronger powers to the CMA, to strengthen the sanctions available and to give customers the protection they deserve against firms who want to rip them off.”

The crackdown aims to make subscriptions “as easy to exit as they are to enter”, while markets like secondary ticketing and unfair terms for care home residents would also be targeted.

The boost in powers comes as the CMA is planning to relocate its headquarters from Holborn in central London to Canary Wharf in a move that further confirms the east London district as a growing home for civil servants.

Other regulators, such as Ofcom and the Financial Conduct Authority, are also set to be given new powers under the plans to stop loyal customers being taken advantage of.

Other proposed measures include forcing mobile phone providers to lower their rate for a customer who has effectively paid off their handsets at the end of the minimum contract period.

The plans will be consulted on in the government’s upcoming Consumer White Paper.

Business secretary Greg Clark said: “The key to successful markets and businesses is ensuring that they work for the benefit of consumers and that unfair practices are tackled effectively, as the majority do.

“I strongly believe that consumer loyalty should not be exploited and nor should consumers have to work so hard to get a fair deal. 

“We are committed to ensuring consumers are not unfairly targeted and penalised for their loyalty and that they can access quality products and services for a price that is competitive and fair."

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Nicholas Mairs
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Nicholas Mairs is a reporter for PoliticsHome, where this story first appeared. He tweets @Nicholas_Mairs

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