Out-Law News 1 min. read

UK competition authority gains power to make recommendations on how proposed laws would affect competition

The Competition and Markets Authority (CMA) now has the power to make written recommendations to UK government ministers on how legislative plans before the UK parliament could impact on competition in UK markets.

The regulator said it intends to use the new power "sparingly".

The CMA gained the right to make the recommendations after provisions contained in the Small Business, Enterprise and Employment Act, which received Royal Assent earlier this year, came into force on 26 May.

Under section 37 of the Small Business, Enterprise and Employment Act, the CMA can make written recommendations to government ministers about legislative proposals before the UK parliament on competition matters within any UK market for goods or services.

The CMA said it is likely to exercise its new powers where "it expects to be able to influence the proposals, and believes it is appropriate for the UK competition authority to make its written recommendations on the public record".

"The absence of written recommendations from the CMA on a legislative proposal should not be treated as suggesting the CMA has taken a view on, or approved, the proposal," the regulator said. "The CMA will be explicit when it is making recommendations to ministers under the new powers to distinguish these cases from other occasions where it makes proposals or gives information or advice to ministers (which may not be published)."

This is a useful tool in the CMA’s arsenal, complementing its wider and more informal remit to make proposals or give information or advice to ministers," said competition law expert Jenny Block of Pinsent Masons, the law firm behind Out-Law.com. "Businesses may well find it rather double-edged and there will inevitably be mixed views on whether the CMA’s perspective is correct in any given case."

"The CMA’s use of this power is entirely discretionary and, from that perspective, its press release is clearly trying to forestall requests that it intervenes substantially more than it would wish," she said. "We expect the bar will be high for any business that wishes to seek to persuade the CMA to intervene in this way."

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