Competition Markets Authority
The Competition and Markets Authority (CMA) has published its Annual Report and Accounts (ARA) for 2023/24, laying out the breadth and impact of its work over the last year.
It has been a challenging year for the country. People have had to cope with rising pressures on household budgets. Businesses have had to work through rising costs. The economy has struggled to grow. Tackling these challenges head on, the CMA has resolutely executed its strategy to drive better outcomes for people, businesses and the UK economy. It has focused action, consistently, on helping consumers get great choices and fair deals; on keeping markets open so that fair-dealing businesses large and small are free to compete and thrive; and on fostering the competitive conditions for the innovation, investment and productivity our economy needs to grow.
The ARA also highlights the CMA carrying out its commitment to ever greater transparency and accountability. Over the last year, the CMA has engaged with more stakeholders, more extensively, than ever before, including businesses (from start-ups to the most established firms), industry associations, consumer groups and charities. It has also initiated a step up in engagement with Parliamentarians in all four nations of the UK.
The CMAs impact assessment (published alongside the ARA) shows that the CMA delivered 23 back in direct financial benefit to UK consumers for every 1 spent over the last 3 financial years more than double the 10 target set by the UK government. 2024 also marks a decade since the CMA became operational, with a total of more than 20 billion direct financial benefit delivered over this period. The broader economic value from the CMAs actions to promote competitive markets and protect consumers is multiples of that figure. This impact is set to continue as the CMA executes its multi-year strategy with strengthened responsibilities and capabilities from the newly passed Digital Markets, Competition and Consumers Act 2024.
Marcus Bokkerink, Chair of the CMA, said:
Over the past year, as set out in our strategy, we have focused all our actions on delivering tangible improvements in the areas that matter most to people, businesses and the UK economy. To people, who want to be free to choose and get a fair deal; to businesses, who want to be free to compete and get a fair shot at success; and to the economy, which needs the step up in investment, innovation and growth that flow from that.
If we want a thriving economy, we need choice, innovation, and investment. That means we need effective competition; and we need consumers and businesses to be confident they will be protected from the unfair practices of a few. That is exactly what we will continue to deliver.
Sarah Cardell, Chief Executive of the CMA, said:
At the heart of our work this year has been steadfast and decisive action which protects consumers in the face of ongoing cost of living pressures and promotes growth by supporting competitive and innovative businesses. Whether its in areas of essential spend like road fuel, groceries and veterinary care, or in vital infrastructure markets like housebuilding, the CMAs activities across the last 12 months have driven positive outcomes for people, businesses and the UK economy.
You can see the tangible value of that work in the billions of pounds of direct financial benefits it has generated for UK consumers over the last 12 months. Since the CMA opened its doors a decade ago, that value has totalled over 20bn.
Were determined to keep building on this progress in the coming year. That means doubling down on our commitment to great choices and fair deals for consumers; and to a level-playing field for fair dealing, innovative businesses and their investors.
With the passing of the Digital Markets, Competition and Consumers Act, the CMA has new legal powers to protect consumers from unfair practices and unlock thriving competition and investment in digital markets.
Fact sheet
Direct financial benefits of the CMAs work:
Each year the CMA estimates the direct financial benefit of our work for consumers. We consider our estimates to be conservative because they are based on cautious assumptions. Nevertheless, they demonstrate that we have delivered significant impact for those we serve this year:
- Estimated total consumer benefits delivered over the last 3 years: 8.2bn
- Estimated annual average consumer benefits delivered over the last 3 years: 2.7bn per year
- The CMA has returned over 23 in savings to consumers for every 1 spent by UK taxpayers over the last 3 years
The additional, indirect impact of the CMAs work is considerable. By taking robust enforcement action, for example, we deter illegal cartels and exploitation of consumers. By securing competitive markets and a level playing-field for fair-dealing businesses, we also create the conditions for investment to flow, innovation to take off, and for a more productive economy.
Helping people get better choices and a fairer deal:
In the face of ongoing cost of living pressures, the CMA has helped make sure that price pressures have not been worsened by weak competition; and that people are properly protected, especially the most vulnerable:
- Road fuel where motorists were paying more than they would be if competition was working well, the CMA worked to help drivers find the best prices to fill up their car when and where they need to.
- Veterinary services having heard from 56,000 pet owners and industry professionals that people may be overpaying for medicines and not being given the information they need to choose the best care for their pets, the CMA launched a market investigation to get to the bottom of their concerns.
- Infant formula with average prices having risen by 25% in two years, and new parents being given limited options to feed their babies, the CMA launched a market study to help people make well-informed, more affordable choices.
- Grocery pricing where CMA research found that consumers (especially those on the lowest incomes) rely on transparent unit pricing to compare the relative costs of products and to save money, the CMA made recommendations to government to help shoppers more easily compare prices and make choices which put money back in their pockets.
Enabling competitive businesses to innovate and thrive:
The CMA has acted decisively to tackle restrictions that hold back fair-dealing, competitive and innovative businesses from growing and entering new markets. By safeguarding the conditions for fair, open and effective competition, the CMA plays a critical role in incentivising businesses to invest, innovate and become more productive.
Over the past year, the CMA has acted in:
- Cloud gaming where, having concluded that Microsofts acquisition of Activision would harm competition in the UK cloud gaming market, an expert group from the CMAs independent Panel blocked the merger. A substantially restructured deal that put the distribution of many much-loved games in the hands of a strong, independent supplier was later approved, meaning better outcomes for UK gamers, and for the growth of this nascent market, for decades to come.
- Online retail platforms where the CMA found that Amazon and Meta were acting in ways that could give them an unfair advantage on their own online retail platforms, the CMA acted to make sure tens of thousands of UK businesses could access Amazon Marketplace and Facebook Marketplace on fair terms, helping them to thrive in the modern digital economy.
- Cloud Services with cloud services increasingly essential for businesses trying to innovate, reduce costs, and become more productive, the CMAs independent panel accepted a referral from Ofcom to consider potential barriers and solutions for competition in this vital strategic market for the UK economy.
- Development and deployment of AI Foundation Models given the transformative potential of AI on people, businesses and the economy, the CMA got ahead of the curve, publishing world-leading research on both the opportunities and risks from AI for competition and consumer protection. This work led to a set of principles to guide both the development and use of powerful AI foundation models towards positive outcomes for our economy and society and help ensure that this powerful engine for growth can benefit all.
- Merger control with roughly 50,000 mergers taking place across 2023, the CMA acted proportionately to review the small number of cases which were truly problematic for competition in the UK. This year half of its 54 Phase 1 reviews were cleared with remedies that help to deliver benefits for consumers and businesses by maintaining competitive rivalry and choice in markets; a third were cleared unconditionally. The 9 Phase 2 reviews (led by a group appointed from the CMAs Panel of independent experts) resulted in a further 2 clearances with remedies, and 5 unconditional clearances. One merger was subject to a prohibition decision at the end of Phase 2. Two mergers were abandoned by the parties at Phase 1 and 1 at Phase 2.