The UK Government has announced a public consultation on expanding the powers of the Competition and Markets Authority (CMA) in relation to addressing breaches of consumer law. The proposed measures respond to recommendations made by the CMA last year, which followed a Citizens Advice Super Complaint on consumer loyalty. They aim to tackle concerns that some businesses employ practices that the CMA believes exploit consumers via a 'loyalty penalty'.
The forthcoming Consumer White Paper will propose new powers that would enable the CMA to decide whether consumer law has been broken, and impose fines directly on businesses without having to go through the courts as it does at present. The White Paper will also consult on creating a formal mechanism for the Government to set out its strategic priorities across consumer markets, with a focus on taking innovative action to tackle consumer harm.
In a letter published by the Business Secretary, Greg Clark, the Government also indicated that it will:
- Encourage regulators to publish data on the size of the loyalty penalty for each relevant supplier of services to consumers.
- Consider legislation to enable Ofcom and the FCA to improve outcomes for consumers.
- Launch a consultation over the summer on creating a new independent consumer advocate for the telecoms sector.
- Continue its Smart Data Review in regulated markets, including requiring pension providers to make information about consumers' pensions more accessible, introducing an Open Communications Initiative for the telecoms sector, and providing additional support to help vulnerable consumers to benefit from new technologies.
We will be making submissions in response to the White Paper and are keen to hear your views. If you are interested in talking to us about the proposed changes, click here to contact us.