The Competition and Markets Authority (CMA) says it wants to better protect consumers through a series of proposals for new powers.
Proposals published by the CMA on Monday (25 February) include treating the interests of consumers as “paramount” and a new statutory requirement of the authority to conduct its investigations quickly.
The CMA has called for it to be allowed to impose legally enforceable requirements (remedies) to address adverse effects on consumers, without having to show that they arise from adverse effects on competition.
Last October the CMA gave the go-ahead to the proposed merger between SSE Retail (SSE) and Npower.
Yet just two months later the merger collapsed, with “adverse developments” in the retail market and “regulatory interventions” such as the price cap cited as reasons behind the decision.
The two energy companies had been in discussions to negotiate the terms of the deal but were unable to reach an agreement.
The reform proposals form part of the CMA’s contribution to the government’s review of the competition regime.
Proposals seek to allow the authority to impose remedies on firms at an earlier stage, or on an interim basis.
It is also proposed that the CMA focus more effectively on its core responsibilities by relinquishing certain powers and functions such as the review of certain decisions by economic regulators and the prosecution of criminal cartels.
The reforms are the result of a request from business secretary Greg Clark to review the current regulatory system.
Andrew Tyrie, chairman of the CMA, said: “The UK is an excellent place to do business, one in which innovation and dynamic companies can thrive.
“But the growth of new and rapidly emerging forms of consumer detriment, partly caused by digitisation, and the public’s increasing doubt about whether markets work for their benefit, both now require a response.
“We have an analogue system of competition and consumer law in a digital age. Similar observations are being made about comparable regimes elsewhere in the world.
“Reform is essential. Hence these far reaching proposals, which will enable the CMA to act more rapidly, and put the consumer first, so as to make the CMA more effective in the third decade of the 21st century.”
Clark added: “These proposals provide a firm basis for further work.
“They are an encouraging step in the right direction and should now form part of the proposals on which we will consult in the competition review.”