Competition – speech

David Currie on markets and the role of the CMA in Scotland

Speech by CMA Chairman, David Currie, at the CMA board reception in Scotland.

I am very pleased to be able to welcome you all here tonight. This is the Competition and Markets Authority (CMA) board’s second visit to Scotland and we have all benefited from the trip, as we did on the first occasion we came to Edinburgh. I will speak in a minute about what we took from the discussions we have had this afternoon, which many of you attended. I would like first to reflect on what has occurred since our last visit in June 2014. I recall that the weather was considerably more clement and the days were long. I also recall that the talk was all of what would happen after the fateful day of 18 September 2014. Well, we know what the result of that day was and the aftermath of the Smith Commission followed now by the Scotland Bill making its way through Westminster. What this process has served to do in our particular area of interest – I think very positively – is raise awareness in Scotland of the importance of the consumer and competition policy regime.

The report of the Scottish government’s Working Group on Consumer and Competition Policy for Scotland has also recently been published. We are pleased that the group recognised the UK role of the CMA and we look forward to contributing to discussions on this work going forward, when the Scottish government has responded with its plans.

I also wanted to review CMA activity since June 2014. We have been very busy as an organisation. For example we concluded our work on secondary ticketing by requiring 4 of the largest UK platforms to give undertakings to give improved information to buyers to allow them to purchase with more confidence. And our final report on payday lenders required improved transparency in the sector through obliging use of price comparison websites so consumers can shop around more easily. But probably of greatest significance to Scottish consumers and businesses are our major investigations into energy and banking. Both investigations have provisionally revealed adverse effects on competition and the possible remedies proposed could trigger significant change in how these markets work for consumers.

Board members, Roger Witcomb (who is leading the energy investigation) and Jill May (who is on the banking investigation group) attended site visits in Perth, Fife and Glasgow – and there have been meetings with the Scottish government, Citizens Advice Scotland and others representing Scottish interests for both inquiries. Members of the energy team also gave evidence to the Scottish Parliament’s Economy, Energy and Tourism Committee in September. CMA staff have contributed to a wide range of events: in Edinburgh here, and in Glasgow, and most recently in Aberdeen last week. These have been on subjects as varied as collaboration in the oil and gas sector, low income consumers, rail competition, public sector procurement, consumer contract terms and helping small businesses understand the relevance of competition law. Sheila and her team here in Edinburgh work hard to enable the full and effective contribution of Scottish stakeholders in the CMA’s work. We think we do get a clear sense of Scottish priorities from both the business and consumer communities – and indeed, from politicians here. However, we accept that there is always room for improvement and tonight is an opportunity for you to talk to us about what more we can do to ensure the Scottish voice is heard.

I’d like now to turn to the very rich discussions we have had this afternoon in our thematic roundtables. For those who participated, I hope you’ll agree that focusing on a few topics (although the topics themselves were fairly broad) was a useful device to draw out particular consumer and competition issues. Some of these were specific issues around how markets are working in Scotland and other issues can probably be said to apply equally across the UK and even internationally. One of the reasons for the focus was to provide material to contribute to the Scottish government’s strategic assessment of markets in Scotland which aims to identify areas of competition concern. The CMA is supporting the Scottish government with its work, using our experience of carrying out UK strategic assessments. Each meeting was attended by someone from the Scottish government’s Consumer and Competition Team and I’m sure they were listening hard for areas of potential interest to their future work, as were we.

I chaired a session earlier on infrastructure, transport and public sector markets. We discussed the Scottish government’s inclusive growth agenda and how regulation, competition and government intervention need to be used in careful balance to ensure markets work well.

In a separate session, there was broad agreement about benefits to consumers from disruptive new business models and innovative use of data, driven by technology, but that this came with a variety of risks too. Participants also discussed the importance of competition authorities only intervening when it is evident that the market won’t self-correct, of ensuring that regulation doesn’t prop up obsolete business models at the expense of new entrants, and ensuring consumers are protected in a rapidly evolving digital world.

The final session, on vulnerable consumers, discussed some of the ways that people can be disadvantaged, including a lack of online access, rurality, the poverty premium and difficulties gaining access to redress. There was broad consensus that tackling these issues requires close working and cooperation between a range of organisations working in this sphere in Scotland.

I have not spoken so far about the CMA’s role in enforcement and I don’t intend to do so in depth this evening. However, we are redoubling our efforts on enforcing competition and consumer protection law. We are determined not to see consumers ripped off by anti-competitive practices because we know that vigorous competition benefits consumers through downward pressure on prices and upward pressure on quality and innovation. A recent example of our work in this area is our infringement decision following an investigation into Consultant Eye Surgeons Partnership. We fined the partnership over £380,000, after they admitted to a number of competition law infringements during almost 7 years to May 2015.

The flip side of enforcement is compliance – we want to help businesses stay on the right side of the law, to be able to spot illegal practices among their suppliers and competitors and, importantly, to be able to report this kind of cheating to us so that we can stop it.

And we’re not alone in this; earlier this year, the Federation of Small Businesses (FSB) asked us to develop a tailored suite of compliance materials for small businesses.

Since then we’ve worked closely with the FSB – my thanks to Colin from the FSB in Edinburgh who’s here tonight – small businesses in research groups and other business representatives to develop materials which small businesses say will help them – materials which explain the law’s relevance in a short, simple, clear and accessible way.

Someone once said that showing is better than telling, so we’ve prepared a short film, a ‘trailer’ as they say in the movie world, which previews this work tonight ahead of it being published and promoted tomorrow.