UK: Competition watchdog stepped up enforcement activity ahead of Brexit

What do fun fairs, modelling agencies, ticketing resellers and drugmakers have in common? They have all come under the radar of the UK’s competition watchdog in recent months as it has sharply stepped up enforcement activity, reports FT.

The Competition and Markets Authority has sought to shift its focus towards enforcement, taking aim at a broad range of industries after being criticised by the National Audit Office for its poor record in cracking down on breaches of competition law.

The CMA’s investigation into the banking market had been widely derided as toothless for doing little to lessen the dominance of the four largest British banks and for not tackling exorbitant rates charged for overdrafts.

Meanwhile, its year-long probe into the energy market found that consumers were overpaying; while it also gave BT permission to go ahead with its £12.5bn merger with EE, the mobile provider.

But towards the end of 2016, the CMA made good on threats made earlier in the year that it would start issuing “substantial fines” and it ordered its first director disqualifications for violating competition law. Now it faces a new challenge — if the UK opts to leave the single market as part of Brexit, the CMA could well end up with a much larger workload because it would no longer share competition responsibilities with Brussels.

In December, the CMA fined US pharmaceuticals group Pfizer a record £84m for charging excessive and unfair prices for a drug used to treat epilepsy, findings that the company said it would appeal. The CMA also accused Actavis of charging the NHS “excessive” prices for hydrocortisone tablets after prices rose 12,000 per cent. While the findings on Actavis are provisional — the watchdog is yet to decide whether to take formal action — the probe came amid a wider crackdown on the pharmaceutical industry.

The CMA also last month fined five top UK modelling agencies £1.5m for price collusion and imposed penalties of more than £2.7m on three suppliers of galvanised steel tanks for breaching competition law following a long-running investigation.

“[The CMA] realised it needed to be seen to be doing more on the enforcement side,” says Neil Cuninghame, competition partner at law firm Ashurst. “[It] has spent a lot of its resources on major market investigations into the energy and banking sectors over the past two years and, now these are coming to an end, that has helped them to step up enforcement action.”

Full Content: Financial Times

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