Competition watchdog to gain new post-Brexit powers
The Competition and Markets Authority (CMA) is to be given new powers to fine companies that rip off customers, make misleading claims, or have unfair terms and conditions.
It is expected that Kwasi Kwarteng, business secretary, will announce the proposals next week to strengthen the CMA’s powers post-Brexit, FT reports.
The changes will allow the CMA to fine companies directly for breaches of consumer law without going to court.
The reforms follow calls by the former CMA chair Lord Andrew Tyrie for enhanced powers to protect consumers and allow for more efficient enforcement against companies.
Under the new proposals, the CMA will be able to fine companies that breach consumer law as well as those that rip off its customers with misleading claims, unfair terms and conditions, or restrictive contacts.
The fines could be as much as 10 per cent of the company’s global turnover.
Companies will be offered the opportunity to make binding, voluntary commitments at any stage of the CMA’s investigations to speed up the process and lower costs.
Lord Andrew Tyrie said that “radical reform of consumer protection in the UK is long overdue”. He welcomed the proposals as marking what “could be a big step in the right direction” but added that the devil was in the detail.
“Only with the detailed proposals to hand can we assess how much the consumer will benefit, how soon and, above all, the depth of the commitment to cultural change at the top of the CMA and Whitehall required to make them effective.”
The new changes also plan on protecting smaller, newer companies from “killer acquisitions”, where a large company takes over a rival before it can launch a new service or product.
Any company that fails to comply with CMA investigations may face fines of up to 5 per cent of annual turnover and additional daily penalties of up to 5 per cent of daily turnover while non-compliance continues.
A government official said: “We want a modernised competition watchdog that sets a gold standard worldwide.