The rules and principles which apply

Prior to 1st April 2014 the Office of Fair Trading (OFT) was responsible for protecting consumer interests; this included taking responsibility for the regulation of consumer credit.

Since 1st April 2014, its responsibilities have been split between a number of different organisations including the Competition and Markets Authority (CMA) and the FCA.  Specifically, the FCA is now responsible for consumer credit regulation and the CMA is responsible for promoting competition for the benefit of consumers.

FCA regulation of consumer credit is now covered in Section B.21 of this manual, this section of relates solely to the role of the CMA and its potential impact on firms.

The CMA is a non-ministerial government department, with statutory authority for consumer protection and competition issues. Alongside other authorities (such as the FCA and the Advertising Standards Authority) the CMA plays an essential role in:

• Promoting and protecting consumer interests throughout the UK
• Ensuring that businesses are fair and competitive

How this may affect firms

Like its predecessor, the OFT, the CMA is responsible for prosecuting firms which engage in illegal activities, such as restrictive practices. It has powers to apply penalties as well as take criminal and civil action against firms which breach its requirements.

The CMA is responsible for:

• Investigating mergers which could restrict competition
• Conducting market studies and investigations in markets where there may be competition and consumer problems
• Investigating where there may be breaches of UK or EU prohibitions against anti-competitive agreements and abuses of dominant positions
• Bringing criminal proceedings against individuals who commit the cartel offence
• Enforcing consumer protection legislation to tackle practices and market conditions that make it difficult for consumers to exercise choice
• Co-operating with sector regulators and encouraging them to use their competition powers
• Considering regulatory references and appeals

In addition, the CMA has five strategic goals:

• Delivering effective enforcement – to deter wrongdoing, protect consumers and educate businesses
• Extending competition frontiers – by using the markets regime to improve the way competition works, in particular within regulated sectors
• Refocusing consumer protection – working with its partners to promote compliance and understanding of the law and empowering consumers to make informed choices
• Achieving professional excellence – by managing every case efficiently, transparently and fairly and ensuring all legal, economic and financial analysis is conducted to the highest international standards
• Developing integrated performance – through ensuring that all staff are brought together from different professional backgrounds to form effective multi-disciplinary teams and provide a trusted competition adviser across government

There is a strong link between the CMA and the FCA and, from April 2015, the FCA became a concurrent regulator, which means it is able to enforce competition law in financial services concurrently with the CMA.  Competition cases and issues are dealt with by the FCA or the CMA, as appropriate; the two organisations work together to share knowledge to ensure that they effectively investigate and analyse competition concerns.

For firms the CMA’s impact is largely on markets or sectors rather than individual businesses.  However, clearly where investigations (such as that undertaken into the private motor insurance market or the CMA’s market study into residential property management services) impact on market practices these may have an effect on the way in which participants, including brokers do business.

Where CMA activity impacts on member firms, we will provide information and guidance at that time.

For further information about the CMA’s role and its work, click here.