GovWire

Thank you for inviting me to give a view from the CMA today.

Im going to focus on competition enforcement work my area of specialty because its a particularly opportune time to talk about 2 important topics.

First, Id like to explain the messages that we think businesses should take away from our spate of recent enforcement activity.

Secondly, looking to the future, I want to explain how we propose to make sure our competition enforcement work delivers on the UK governments steer that we should focus on supporting growth across the CMAs tools.

The aims of competition enforcement

Before I get into the detail of these topics, however, I wanted to spend a few moments standing back and thinking about what and how we are trying to achieve with our competition enforcement work.

Because this ultimately guides our choices about both what work we do in other words what cases and other interventions we choose to prioritise and how we go about it.

At its heart competition enforcement is about safeguarding competitive markets, driving efficiency throughout the supply chain and promoting dynamism, innovation and productivity.

Competition enforcement can also drive down prices for consumers, for businesses and for taxpayers, as well as keeping markets open and creating a level playing field. And it has an important role in driving trust and confidence in markets, for both consumers and investors.

Thats why competition enforcement remains at the core of the work of the CMA as we evolve to meet new policy and economic challenges. And this applies whether we are talking about tackling hard-core cartel conduct, abuses of market power or other illegal and harmful arrangements.

So that is as most of you in this room will already recognise what competition law enforcement can achieve. But how, in practice, do we translate this into reality. One important way is by bringing anti-competitive conduct to an end: and that can be through the vehicle of a formal investigation certainly the aspect of our work that is likely to be most familiar to this audience but also through other interventions such as warning or advisory letters that I will talk about later.

We are in many cases however also focused on deterring those who might be tempted to stray over the line. And indeed this can be a crucially important outcome of our work. We do this primarily by imposing fines on companies almost 650 million over the last 5 years but also through holding individuals to account through our powers in relation to director disqualification at current count 29 individuals have been prevented from acting as directors or being involved in the management of a company under the disqualification regime. More recently, those who are found to have committed breaches of competition law also face an increased risk of being excluded from future public tenders as a result of the Procurement Act that came into force this February.

Recent enforcement activity

Im going to move on to talk about how that aim translates into enforcement activity by reference to 5 recent cases all of which demonstrate our commitment to deterring conduct that impedes the kind of dynamic, competitive markets that boost our economy.

A brief tour of our recent enforcement cases will serve to underline the variety of victims we aim to protect taxpayers, workers, consumers, businesses as well as how anti-competitive conduct has the potential to reduce economic prosperity through dampening innovation or reducing efficiency.

So what, more precisely, have we been doing by way of enforcement since the start of this year.

In February, we fined 4 global investment banks collectively over 100 million for colluding in relation to UK government bonds or gilts (and related products) through bilateral exchanges of information among traders. (The fifth bank involved in the investigation escaped fines because it was the first to self-report the conduct to us under our leniency policy before wed opened an investigation.) It is, of course, vital that a market of paramount importance to us all the gilt market should be able to function freely and fairly and the size of the fine reflects that.

In March, we concluded our first labour market case concerning exchanges of information among sports broadcasters about the rates of pay for freelancer production staff like sound and camera operators with a view, primarily, to aligning those rates or as one of those involved described it presenting a united front. Labour markets are key to a well-functioning economy and, in taking cases in this area, we aim to ensure that workers are able to obtain a fair value for their work but also that businesses can find and hire workers at the right price.

In April, we reached a finding of infringement by many of the global car manufactures and the EU and UK trade association that encompassed a long-running agreement not to advertise their performance against certain green parameters an investigation we started because we were concerned that this type of conduct could undermine incentives to innovate, including when it comes to sustainable growth. The investigation culminated in a settlement which saw the parties collectively agree to pay fines in the region of 77 million.

I also wanted to highlight a case that is not quite yet concluded which is our investigation into a drug manufacturer who we suspected of spreading misinformation about the safety of a rival drug. To put an end to the investigation, the manufacturer has offered not only to put in place guarantees about how it will interact with healthcare providers going forward including conducting a communications campaign designed to clarify the position in relation to the relative safety of the rival drug but also to make a payment of 23 million directly to the NHS. So with this outcome, we would be simultaneously ensuring that a competitor is not wrongly prevented from competing on the merits to grow the sales of its drug, we are protecting the NHS (and ultimately the taxpayer) from the risk of potential financial harm and perhaps most importantly - making sure healthcare providers have accurate safety information when selecting the right treatment for their patients condition.

And while Im talking about pharmaceuticals, it is also worth highlighting a judgment handed down last week concerning our investigation about excessive pricing of Liothyronine. This case concerned a particularly egregious infringement that saw the sole supplier of an essential drug increase its price over 1000% in less than 10 years, without any justification costing the NHS millions of pounds. Given the nature of the conduct at issue here, we were extremely pleased that the Court of Appeal found resoundingly in our favour.

It is also worth flagging that as part of its judgment, the Court of Appeal considered how the CMA should approach the issue of deterrence when it comes to setting penalties. And given what Ive already said about the importance of deterrence to our work, it was comforting that in this case the Court of Appeal upheld the CMAs approach to specific deterrence essentially agreeing that penalties should be set at a level that is sufficient to deter re-offending by the party being fined relative to global turnover (and therefore re-instating in full the original penalty imposed by the CMA on one of the firms involved).

Before I move on to discuss our future priorities, I did want to highlight that both the vehicle recycling and disparagement cases I mentioned above were also the subject of similar investigations by the European Commission.

Indeed, in the car recycling case, we opened and concluded the cases on the same day. And particularly in the context of this conference, I wanted to stress how vital international cooperation remains to competition enforcement work; whether that be in sharing expertise and best practice or on specific investigations. Indeed, this was brought home to me last week during the International Competition Networks annual conference which took place in Edinburgh, and which saw agencies come together and discuss how we continue to evolve our agencies and our laws to meet the challenges we collectively face and to exchange best practices in areas as diverse as dawn raids to advocacy.

Looking to the future priorities for intervention

The governments strategic steer published today as well as our annual plan highlights the opportunities for our work to continue to drive efficiencies in the provision of public sector services.

As those of you who are familiar with our work will recognise, the CMA has a s

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