The new Competition and Markets Authority today took up its role. In this guest post, chief exec Alex Chisholm sets out what the CMA wants to do for consumers, including investigating the energy and banking markets.
We’re all better off when companies have to compete for customers. It means that they have to develop new and better products, keep down prices and treat customers better, and run their businesses more efficiently.
It means that businesses and Government can get better deals from other businesses, whether they’re buying goods or building schools. Added together, this all means important benefits for consumers and the economy as a whole.
That’s why the CMA’s role in protecting and encouraging competition in markets is vital.
Changing markets for the better
We investigate markets that aren’t working well, and have strong powers to change them for the better. We investigate firms and individuals who are breaking competition law, and can impose penalties up to and including prison sentences for the worst abuses.
We ensure that companies’ plans to merge don’t lead to significant reductions in competition. And working with partners like Trading Standards services, Citizens Advice and Which?, we use consumer law where widespread market practices mean that consumers can’t make informed choices.
Banking and energy competition
We’ve taken up our role with two of the most important markets high on the agenda – banking and energy.
You may well have seen that Ofgem has provisionally decided to refer the market for energy to us for a full competition inquiry, after a joint Ofgem/OFT/CMA assessment found weak competition between larger suppliers, low customer trust and engagement, and barriers to entry and expansion.
We’re bringing together work on business banking and personal current accounts, so that we can form a comprehensive view on that sector and whether further action is needed. We’re also working on cases and projects involving motor insurance, payday lending, property management, road fuels, and pharmaceuticals – markets that have huge implications for all of us.
Which markets aren’t working for you?
That’s only a brief summary of our work, but what’s ultimately most important to us is the difference that we make for consumers. We measure our success by the effect we have on people’s lives – we aim to achieve benefits for consumers of at least ten times our cost to the taxpayer, and to ensure that the cases and issues that we tackle are ones that matter most to people, even if they won’t always know it.
And of course competition isn’t just about market structures and how firms behave – it needs consumers who feel empowered to make choices between different products and providers. So I’d encourage you to keep shopping around and rewarding the firms who give you the best deals, and make businesses work harder for your custom – and the CMA wants to know about the markets and practices that keep you from doing so. That way we can work with you to ensure that competition and markets keep working in your favour.
Which? Conversation provides guest spots to external contributors. This is from Alex Chisholm, chief executive of the new Competition and Markets Authority. All opinions expressed here are his own, not necessarily those of Which?.
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