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The CMA: Making competition work for consumers

Bank sign with a crack in it

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?.

Comments
Profile photo of william
Member

“Government can get better deals from other businesses” can someone explain why govt only ever get time and materials deals and never fixed price? Surely fixed price would prevent all the budget creep.

“Which markets aren’t working for you?” Supermarkets. Can you force them to display correct unit prices on multibuys offers, although I’d rather multibuy offers were banned and replaced with the equiv discount on single items. I for one don’t care if a supermarket is just trying to shift stock. Multibuy offers disadvantage several groups of people.

And on a general note, many regulators seem to think that they’ve been given rules to enforce and that’s where their remit ends, it takes ages for them to look at enhancing their powers to keep up with the every changing world. The TPS springs to mind in that it has very limited powers and it does nothing to get them extended to the point that for many phone users the TPS is a waste of oxygen. Will the CMA be pro-active in that respect. Or should we be expecting it to be just another lame duck like many other regulators.

Will the CMA be pushing for much LARGER fines, jail sentences. e.g. “Microsoft scam man is sentenced in ‘landmark’ case” yet the sentence is suspended for 12 months and he’s been fined and ordered to pay costs. Sorry but the misery that that scam has/still is causing, the jail term should have been 10 years minimum and costs of £13k? On what planet do the legal profession charge that little ? I’d like the CMA to actively push for far greater punishment. #crime shouldnt look like a valid career path.

Member
Alex wright says:
2 April 2014

I was interested to see that you are looking into the Energy Sector. We have just launched a campaign – Energy Sector Leaders Challenged to Become a “Force for Good” with a White Paper and supporting video.

In the new report “The Energy Sector – A Force for Good?” the Naked Leader, Authentic Leadership Experts, and Molten, the Energy Specialists, are challenging all leaders in the Energy Sector to change the way they behave to actively become – and be seen as – a Force for Good in the world.

Naked Leader and Molten know that if leaders in the Energy Sector become a Force for Good, they will make and save more money than they do today, and the additional benefits will be broad and far-reaching, including improving the effect the industry has on society as a whole, increasing revenue for national economies, and delivering better outcomes for employees and customers of the sector.

Naked Leader and Molten believe that the formula for leaders in the Energy Sector to become a Force for Good is simple:

1. Truth: Tell the truth – good and bad – and when you do, strip away the mystery, jargon and hype. Tell us the simple facts.

2. Trust: Build trust based on what you say and do, both inside and outside of your company.

3. Transparency: Be more open – internally and externally.

Our Call to Action: The Energy Sector – A Force for Good? It makes sense; let’s make it so.

The White Paper and complementary Video with Estelle Brachlianoff, Executive Vice President, UK and Northern Europe zone at Veolia Environment.
#force4good – http://www.youtube.com/watch?v=mF4QWbO1cfA
ENDS

For more information or to arrange an interview please contact:

Rory Colfer, Managing Partner Molten
David Taylor, Founder, Naked Leader

Thank you

Member
gg says:
2 April 2014

Mobile phone companies. Lock you into long 24-month agreements, put the price up whenever they like, change the terms whenever they like and however they like, refuse to let you leave despite not agreeing to the changes, make no attempt to provide customer service and refuse to honour their own terms and conditions, Ofcom conditions or consumer contract law etc