CMA encourages competitive markets with new policy guidelines
The CMA has today published guidelines to help policymakers assess the potential impact that their proposals could have on competition.
Competitive markets benefit consumers through lower prices and greater choice, by encouraging suppliers to create new products and different ways of bringing products to markets.
Government intervention in markets - including through regulation and legislation - can have the unintended side effect of restricting competition in a number of ways. These Competition and Markets Authority (CMA) guidelines provide policymakers with advice on how to assess whether proposals could affect competition adversely. The guidelines also suggest ways in which proposals could be re-designed in order to support competition.
There are 2 parts to the guidelines. Part 1 provides an overview of when and how policymakers can consider the competition implications of their proposals, including understanding whether a detailed competition assessment is necessary. Part 2 provides practical advice on how to conduct a competition assessment.
The guidelines complement the Green Book and Better Regulation Executive’s processes by providing a more detailed guide for how policymakers can take competition considerations into account when developing proposals.
John Kirkpatrick, CMA Senior Director, Research, Intelligence and Advocacy, said:
The CMA is keen to promote competitive markets and, as government itself recognises, the policies developed by other parts of government can help or hinder that.
These guidelines are intended to help policymakers assess the impact policy proposals may have on competition, whilst achieving their original public policy goals. We will continue to work with government departments to assess specific policy proposals as they arise.
Small Business, Industry and Enterprise Minister Anna Soubry said:
Competition is good for business, as it breeds innovation and boosts productivity, and it’s good for consumers, as it brings down prices and gives them more choice. I want to see more competition and let businesses get on with doing business. This new guidance from the CMA will help policy makers consider the impact of new regulation and identify where existing rules are getting in the way.
Notes for editors
- The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law. For more information see the CMA’s homepage on GOV.UK.
- For CMA updates, follow us on Twitter @CMAgovuk, Flickr and LinkedIn.
- These guidelines have been prepared in line with the CMA’s powers as set out in the Enterprise Act 2002, under which it can ‘make proposals or give information/advice to government in relation to any of its functions’. They are consistent with the Ministerial Strategic Steer 2015 (currently in draft for consultation) that the CMA should ‘use its knowledge to actively challenge government and encourage the use of effective competition to improve delivery and to promote more diversity and choice for UK consumers’.
- The guidelines will also support the CMA’s new power (introduced in the Small Business, Enterprise and Employment Act 2015) to ‘make recommendations to ministers on the impact of proposals for legislation on competition within any UK market(s) for goods and services’ by encouraging policy makers to take competition issues into consideration early in the policy making process’.
- The evidence summarised in the CMA’s report Productivity and competition: a summary of the evidence suggests that increases in competition in a market are often associated with increases in productivity, and that competition policy interventions can therefore improve productivity.
- Enquiries should be directed to Simon Belgard (email@example.com, 020 3738 6472).