Annual report on concurrency 2024 (2024)

Introduction

This is the tenth annual concurrency report to be published by the Competition and Markets Authority (CMA) in accordance with the CMA’s statutory obligation^{[footnote 1]} since the enhanced concurrency arrangements came into effect on 1 April 2014.^{[footnote 2]}

Under the concurrency arrangements, competition law is applied in the regulated sectors not only by the CMA, the UK’s primary competition authority, but also by the relevant sector regulators.

Table 1: Sector regulators and their areas of concurrent jurisdiction

Like the CMA, the sector regulators can, in the sectors for which they are responsible:

• apply the UK prohibitions on undertakings engaging in anti-competitive agreements or on the abuse of a dominant market position (respectively, the Chapters I and II prohibitions of the Competition Act 1998, which are referred to in this report as the ‘Chapter I prohibition’ and the ‘Chapter II prohibition’ respectively)

• conduct market studies under Part 4 of the Enterprise Act 2002, and if appropriate, make a market investigation reference under which the CMA conducts an in-depth investigation into whether any feature, or combination of features, of a market in the UK for goods or services prevents, restricts, or distorts competition

The concurrency arrangements also provide for cooperation between the CMA and the sector regulators in relation to their concurrent competition powers.

The CMA is required by law to prepare and publish a report after the end of each financial year, containing an assessment of how the concurrency arrangements have operated during the year.^{[footnote 3]}

This report assesses the operation of the concurrency arrangements over the period 1 April 2023 to 31 March 2024:

• the first part of the report provides an overview of the year as a whole

• the second part sets out in more detail the competition enforcement work that has been undertaken in the regulated sectors

• the third part sets out the markets work that has been carried out

• the report concludes with an overview of the wider cooperation between the CMA and the sector regulators

The CMA’s wider review of the concurrency arrangements

The Enterprise and Regulatory Reform Act 2013 introduced a range of significant reforms to enhance the concurrency arrangements. These reforms came into force in 2014. 2024 therefore marks 10 years of these enhanced concurrency arrangements being in operation.

The 10 year anniversary provided a good opportunity to consider the objectives and performance of concurrency more broadly, and over a longer time frame than the CMA’s annual concurrency reports.

The CMA therefore launched a wider review into the overall operation and effectiveness of the concurrency regime in August 2023. The review was launched with a call for inputs, seeking views on the effectiveness of the concurrency arrangements. In addition, the CMA held a series of bilateral meetings and also hosted a roundtable discussion to provide an opportunity for a range of different stakeholders to provide views. The CMA will report separately on this wider 10 year review in due course.

This report is specifically concerned with the operation of the concurrency arrangements over the last financial year. It does not set out the CMA’s findings from its wider review of the operation of concurrency over the last 10 years, nor provide discussion of wider policy debates on sector regulation.

Overview of the year

Casework

In last year’s report, we noted that there had been growing use of the ‘markets’ regime (providing for market studies and/or market investigations) to tackle issues in the regulated sectors.Over the reporting period, there has been a continued focus on markets work to address issues within the regulated sectors:

• ORR launched a market study under the Enterprise Act 2002 into the provision of railway station catering services, with the final report published after the reporting period, in June 2024

• the FCA completed its Enterprise Act 2002 market study into wholesale data in February 2024

• Ofcom completed its market study into the supply of public cloud infrastructure services in October 2023. Ofcom referred the market to the CMA for a market investigation reference. The CMA is now carrying out the market investigation, with a statutory deadline of April 2025

In addition to markets work, there have been several developments in competition law enforcement within the regulated sectors, with 4 new cases being launched under the Competition Act 1998 by the FCA, Ofgem and the CMA, an infringement decision and 2 commitments decisions having been taken^{[footnote 4]}

Digital Markets, Competition and Consumers Act

The Digital Markets, Competition and Consumers Act, which gained Royal Assent on 24th May 2024, enhances the CMA’s and sector regulators’ concurrent competition powers. Enforcement by both the CMA and sector regulators will be strengthened by improved tools, including new/higher penalties for non-compliance with investigatory and remedial obligations. The CMA and sector regulators will also be subject to a new duty of expedition in relation to the exercise of their concurrent competition functions.

The CMA has consulted the sector regulators as part of preparations for the reforms to the competition powers. This has included engagement with the sector regulators on updates which will need to be made to enforcement guidance to reflect the new powers.

Environmental sustainability

In October 2023, the CMA published guidance on the application of the Chapter I prohibition to environmental sustainability agreements between businesses operating at the same level of the supply chain.^{[footnote 5]}

The CMA consulted the sector regulators in developing the guidance, including bilaterally and through discussions of the UK Competition Network. The new guidance explains that the CMA is operating an ‘open-door policy’ where if businesses are uncertain about the application of the guidance, they can approach the CMA for informal guidance. As set out in the guidance, if an agreement concerns a regulated sector, the CMA will also consult the relevant sector regulator when considering requests for informal guidance under this open-door policy.

Competition enforcement in the regulated sectors

This section of the report sets out the competition enforcement work that has been carried out by the CMA and the sector regulators during the current reporting period (1 April 2023 to 31 March 2024). It also highlights the use they have made of softer enforcement tools, such as advisory and warning letters.

Competition prohibitions

Table 2: Use of powers by the CMA and sector regulators under the Chapter I and Chapter II prohibitions in the Competition Act 1998 for the period 1 April 2023 to 31 March 2024 in the regulated sectors

Notes:

† Complaints under the Chapter I and Chapter II prohibitions in the Competition Act 1998 refers to evidenced complaints received by the sector regulators which they regarded as raising competition law issues under those prohibitions and met their guidelines for the submission of formal complaints.

‡ This figure includes one complaint that the NIAUR received in February 2021 alongside a Dispute submitted under Article 26 of the Electricity (NI) Order 1992. The complaint referral was not considered further until the determination of the Dispute in September 2021 and is therefore included in the figures for the current reporting period.

§ The 5 cases include an investigation opened by the FCA under Chapter I of the Competition Act 1998 and Article 101 TFEU where formal powers had not been exercised as of 31 March 2019. Similarly, they include an investigation opened by Ofcom under Chapter I of the Competition Act 1998 and Article 101 TFEU just before the end of the reporting period but where Ofcom had not yet formally launched the investigation as at the date of the 2019 report.

(*) This figure includes an investigation opened by the FCA under Chapter I of the Competition Act 1998 in which formal powers were not exercised. The case has since been closed.

At the start of the reporting period, there were 9 open cases in which jurisdiction was shared between the CMA and one or more sector regulator:

• the CMA had a Chapter II investigation open into collection and use of advertising and single sign-on data by Meta^{[footnote 6]}

• the CMA had a Chapter II investigation open in relation to Google’s practices in advertising technology intermediation services^{[footnote 7]}

• the CMA had a Chapter II investigation open into Apple’s conduct in relation to the distribution of apps on iOS and iPadOS devices^{[footnote 8]}

• the CMA had a Chapter II investigation into the distribution of apps by Google^{[footnote 9]}

• the CMA had a Chapter II investigation into Amazon’s marketplace^{[footnote 10]}

• the FCA had a Chapter I investigation open into suspected anti-competitive conduct in relation to international money transfer services in Glasgow

• the CMA had a Chapter I investigation open into suspected anti-competitive arrangements in the financial services sector^{[footnote 11]}

• the FCA had a Chapter II investigation in relation to conduct in the financial services sector

• the CMA had a Chapter I investigation into the purchase of freelance services in the production and broadcasting of sports content^{[footnote 12]}

During the reporting period:

• 4 new investigations were launched in cases that were concurrent because the CMA and one or more sector regulators all had jurisdiction:

  • the CMA launched a Chapter I investigation in relation to the purchase of freelance services in the production, creation, and broadcasting of television content in the UK, excluding sport content^{[footnote 13]}

  • the FCA launched an investigation into a suspected infringement of the Chapter II prohibition in the financial services sector

  • the FCA launched an investigation into a suspected infringement of the Chapter I prohibition in the financial services sector

  • Ofgem launched a Chapter II investigation in the energy market

• one investigation resulted in an infringement decision:
  • the FCA’s Chapter I investigation into international money transfer services in Glasgow

• 2 investigations closed with commitments:

  • the CMA’s Chapter II investigation into the collection and use of advertising and single sign-on data by Meta

  • the CMA’s Chapter II investigation into Amazon’s marketplace

Further details on the cases listed are included in the section below. As some of the investigations are currently ongoing, the information disclosed is limited to what is publicly available, but relevant updates have been provided where possible.

Digital

Chapter II investigation in relation to the Apple AppStore

In March 2021, the CMA launched an investigation into Apple’s conduct in relation to the distribution of apps on iOS and iPadOS devices in the UK, in particular, the terms and conditions governing app developers’ access to Apple’s App Store. The investigation is ongoing.

Chapter II investigation into Meta’s use of data

In June 2021, the CMA launched an investigation into whether Meta had gained an unfair advantage over competitors, particularly those which provide services for online classified adverts, through how it gathers and uses certain advertising data. In November 2023, the CMA published its decision to accept commitments offered by Meta to resolve its competition concerns.^{[footnote 14]}

The CMA was concerned that Meta was able to use certain advertising data gathered from businesses using its advertising services to develop and improve its own products in competition with those advertising customers. For example, data gathered from users’ interactions with third-party adverts on Facebook could provide Meta with knowledge as to whether a user is interested in a particular product, such as trainers, which could then in turn encourage Meta to target that user with its own Marketplace listings for trainers.

To address its competition concerns, the CMA accepted commitments offered by Meta, which include:

• An opt-out option for Meta’s advertising customers: Meta’s advertising customers can ‘opt out’ of their relevant ad data being used by Meta to operate or improve Facebook Marketplace. This includes data that illustrates how users engage with their ads and can indicate to Meta which products or services a user is interested in. This commitment will be achieved via the implementation of a technical system for Facebook Marketplace to prevent Meta’s use of such data

• Further limitations on Meta’s use of ad data in product development: Beyond Marketplace, Meta will limit its use of ad data derived from digital display advertising and business tool services that can be used to identify advertisers. It will issue a statement in its published Code of Conduct that states that such data should not be used to develop Meta products that compete with those advertisers. The Code sets out the standards to which Meta will hold itself and its expectations for how Meta’s employees should act. Meta also commits to taking the necessary steps to ensure its employees working on product development do not use such information to develop and improve Meta’s products in the UK in competition with advertisers

As with any acceptance of commitments under the Competition Act 1998, the acceptance of these commitments from Meta does not involve any decision by the CMA on whether or not Meta has in fact infringed the Chapter II prohibition, and the offer of the commitments by Meta does not constitute an admission of any infringement.

Chapter II investigation into Google’s practices in advertising technology intermediation services

In May 2022, the CMA launched an investigation into Google’s conduct with regards to advertising technology intermediation services (also known as the ‘ad tech stack’) which facilitate the sale of online advertising space between sellers (like online newspapers and other content providers) and buyers (advertisers).

In March 2023, this investigation was combined with the CMA’s investigation into whether Google has abused its dominant position through its conduct in relation to header bidding services.^{[footnote 15]} The investigation is ongoing.

Chapter II investigation into Google’s distribution of apps

In June 2022, the CMA launched an investigation into Google’s distribution of apps on Android devices in the UK. In particular, the CMA is investigating Google’s Play Store rules which oblige app developers offering digital content to use Google’s own payment system (Google Play Billing) for in-app purchases.

In April 2023, the CMA published a notice of intention to accept commitments offered by Google. The commitments proposed that app developers would be able to offer a different payment system of their choosing, known as ‘Developer-only Billing’ (DOB), or offer users a choice between an alternative payment system and Google Play’s billing system, known as ‘User Choice Billing’ (UCB). The CMA is still considering representations received in response to the consultation on the commitments.

Chapter II investigation into Amazon’s Marketplace

In July 2022, the CMA launched an investigation into Amazon’s conduct in relation to the way that non-public third-party seller data may be used within Amazon’s retail business, how Amazon sets criteria for selecting which product offer is placed within the ‘Buy Box’, and which sellers can list products under Amazon’s ‘Prime label’ on its Marketplace in the UK. In November 2023, the CMA published a decision to accept commitments offered by Amazon.

The CMA was concerned that:

• Amazon was using data relating to, and/or derived from, the commercial activities of third-party sellers to inform business decisions by its retail arm when competing against those sellers on the UK Amazon Marketplace

• Amazon set and applied the conditions and criteria for selecting the ‘Featured Offer’ on product pages in a discriminatory manner, such that Amazon Retail and sellers that use Amazon’s fulfilment services were unfairly advantaged over other sellers

• third-party sellers that used carriers other than Amazon’s fulfilment services or Royal Mail were unable to independently negotiate terms and rates for Prime delivery services with those carriers and had to use the terms and rates that had been agreed by Amazon with those carriers

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To address its competition concerns, the CMA accepted commitments offered by Amazon which include:

• ensuring Amazon does not use rival sellers’ Marketplace data to gain an unfair advantage over other sellers

• guaranteeing all product offers are treated equally when Amazon decides which will be featured in the ‘Buy Box’

• allowing third-party businesses using Marketplace to negotiate their own rates directly with independent providers of Prime delivery services so that customers can benefit from lower delivery costs where better rates are negotiated

• requiring Amazon to appoint an independent trustee who will monitor the company’s compliance with these commitments

The acceptance of these commitments from Amazon does not involve any decision by the CMA on whether or not Amazon has in fact infringed the Chapter II prohibition, and the offer of the commitments by Amazon does not constitute an admission of any infringement.

Communications

Chapter I investigation into the purchase of freelance services in the production and broadcasting of sports content

In July 2022, the CMA launched an investigation into suspected breaches of competition law by at least the following: BT Group, IMG Media (including Premier League Productions), ITV, and Sky UK.

The investigation concerns suspected infringements of the Chapter I prohibition in relation to the purchase of freelance services and the employment of staff supporting the production and broadcasting of sports content in the UK. The investigation is ongoing.

Chapter I investigation into the purchase of freelance services in the production, creation, and broadcasting of television content in the UK, excluding sport content

In October 2023, the CMA launched an investigation into suspected breaches of competition law by at least the following: the BBC, Hartswood Films, Hat Trick Productions, ITV, Red Planet Pictures, Sister Pictures and Tiger Aspect Productions.

The investigation concerns suspected infringements of the Chapter I prohibition in relation to the purchase of freelance services in the production, creation, and broadcasting of television content in the UK, excluding sport content. The investigation is ongoing.

Financial services

Chapter I investigation in the financial services sector

In November 2018, the CMA launched an investigation into a suspected infringement of the Chapter I prohibition on anti-competitive arrangements by 5 major banks: Citi, Deutsche Bank, HSBC, Morgan Stanley and Royal Bank of Canada.

In May 2023, the CMA issued a Statement of Objections, which provisionally found that the 5 banks had breached competition law by sharing competitively sensitive information in relation to UK government bonds, having participated in one or more series of one-to-one conversations in chatrooms.

Deutsche Bank alerted the CMA to its participation in the alleged unlawful behaviour under the CMA’s leniency policy, and Citi applied for leniency during the CMA’s investigation. Both banks have admitted their involvement in anti-competitive activity and, providing they continue to cooperate and comply with the conditions of leniency, Deutsche Bank will not be fined and any fine that Citi receives will be discounted.

The CMA’s findings are provisional, and HSBC, Morgan Stanley and Royal Bank of Canada have not admitted any wrongdoing. The parties had the opportunity to make representations on the matters set out in the Statement of Objections. The CMA’s investigation is ongoing and if the CMA reaches a final conclusion that any 2 or more of the banks engaged in anti-competitive activity, the CMA will publish an infringement decision and may issue fines.

Chapter I investigation in the financial services sector

In September 2020, the FCA launched an investigation into a suspected infringement of the Chapter I prohibition by Dollar East (International Travel & Money Transfer) Ltd, Hafiz Bros Travel & Money Transfer Limited, and LCC Trans-Sending Limited (including its parent company Small World Financial Services Group Limited) trading as Small World.

In November 2023, the FCA issued a decision finding that, for a period in 2017, these 3 firms had coordinated on certain exchange rates offered to consumers for converting UK Pounds into Pakistan Rupees in transferring money to Pakistan.^{[footnote 16]} They had also fixed the level of a flat rate transaction fee charged to consumers when making certain money transfers from the UK to Pakistan via Small World’s services.

The FCA imposed fines of £3,600 for Dollar East, £11,200 for Hafiz Bros, and £139,500 for Small World. All 3 parties admitted to the FCA that they broke competition law and received settlement discounts to reflect resource savings to the FCA in bringing this investigation to an earlier conclusion.

Chapter II investigation in the financial services sector

In January 2023, the FCA launched an investigation into a suspected infringement of the Chapter II prohibition in the financial services sector. The investigation continued during the relevant reporting period.

Chapter II investigation in the financial services sector

In June 2023, the FCA launched a second investigation into a suspected infringement of the Chapter II prohibition in the financial services sector. The investigation is ongoing.

Chapter I investigation in the financial services sector

In July 2023, the FCA launched an investigation into a suspected infringement of the Chapter I prohibition in the financial services sector. The investigation is ongoing.^{[footnote 17]}

Energy

Chapter II investigation in the energy market

In March 2024, Ofgem launched an investigation into a suspected infringement of the Chapter II prohibition in the energy market. The investigation is ongoing.

Cases appealed to the Competition Appeal Tribunal

There have been no appeals to the Competition Appeal Tribunal in respect of the enforcement of the Competition Act 1998 in the regulated sectors, during the reporting period.

Use of advisory/warning letters

The CMA and sector regulators can issue advisory and warning letters in situations where there are concerns that certain practices may be restricting competition, but for which a formal investigation has not been launched. Both advisory and warning letters are ‘softer’ enforcement tools that are designed to increase awareness of competition law and encourage compliance.

During this reporting period, the following warning and advisory letters were issued in respect of activities in the regulated sectors:

• the FCA issued 4‘on notice’ letters (the FCA’s equivalent of the CMA’s warning letters) and 9 advisory letters (intended to increase awareness of competition law and achieve greater compliance by recipient firms). The type of behaviour which led to these 13 letters included potentially anticompetitive coordination between competitors in the financial services sector

• the PSR sent one letter to a firm concerning a potential restriction on passive sales in agreements which related to participation in payment systems^{[footnote 18]}

• the CMA sent an open letter to electric vehicle chargepoint operators and motorway service area operators to remind them of the findings of the CMA’s market study on motorway charging, and of their ongoing obligations under competition law

Decisions taken since April 2023 to use direct regulatory powers instead of competition prohibition powers

Under Schedule 4 to the Enterprise and Regulatory Reform Act 2013, the CMA has a duty to report on any decision taken by a regulator in which the regulator is satisfied that its functions under Part 1 of the Competition Act 1998 in a case are exercisable, but that it is more appropriate for it to proceed by exercising functions other than those that it has under Part 1 of the Competition Act 1998. There were no cases during the reporting period in which the reporting obligation was triggered.

In addition to the above, the sector regulators have a duty to consider whether, before exercising certain specified powers under their respective sector-specific legislation, it would be more appropriate to proceed under the Competition Act 1998 (referred to as the ‘primacy obligation’).

There were 3 occasions in the reporting period where the PSR proceeded to exercise certain of its specified powers under part 5 of the Financial Services (Banking Reform) Act 2013 which trigger the primacy obligation. These all related to the PSR’s work on preventing accidentally misdirected payments and Authorised Push Payment scams. Having considered whether it would be more appropriate to exercise its competition powers, the PSR decided that its regulatory powers were the most appropriate tool in each case.

The FCA indicated that in the cases where the primacy obligation was triggered during this reporting period, Competition Act 1998 powers could not have addressed the relevant concerns. Therefore, it did not need to consider further whether it was more appropriate to proceed under the Competition Act 1998 than under its regulatory powers in the Financial Services and Markets Act 2000.

Ofgem indicated that it did take action during the reporting period of the type specified in its primacy obligation. However, it concluded that Competition Act 1998 powers would not have addressed the problem, so it proceeded under the sector specific regulatory legislation.

The CAA, NIAUR, ORR, Ofwat and Ofcom reported that there were no cases in which the primacy obligation was triggered during the reporting period.^{[footnote 19]}

Private enforcement

This report is concerned with the arrangements for co-operation between the CMA and the sector regulators in respect of the concurrent functions of the CMA and the sector regulators. However, alongside public enforcement in the regulated sectors, the reporting period has seen a continuation in the trend of private enforcement of competition law in the regulated sectors.

Private actions in the regulated sectors include a follow on claim for damages from Whistl against Royal Mail, following Ofcom’s finding in 2018 that Royal Mail had abused a dominant position in the market for bulk mail delivery services in the United Kingdom.^{[footnote 20]} Other private actions concerning conduct in the regulated sectors are ‘stand-alone claims’, in that they are not based on a previous finding of a competition law infringement by the CMA or a sector regulator.^{[footnote 21]} They include claims in relation to the conduct of train operating companies,^{[footnote 22]} water companies,^{[footnote 23]} and mobile network operators.^{[footnote 24]}

Market studies and market investigations

The CMA and the sector regulators also have powers to conduct market studies and to make market investigation references to the CMA under the Enterprise Act 2002. This section focuses on developments in market studies and market investigations under the Enterprise Act 2002 relating to the regulated sectors during the period covered by the report.

Market studies active during the reporting period

• Ofcom: Cloud services (completed October 2023)
• FCA: Wholesale Data (completed February 2024
• ORR: Railway station catering (launched June 2023)

Market investigations active during the reporting period

• CMA: Airwave (final report issued April 2023)
• CMA: Mobile browsers and cloud gaming (launched November 2022)
• CMA: Cloud services (launched October 2023)

Follow-up on market studies and investigations completed prior to the reporting period

• CMA: Mobile eco-systems (completed 2022)
• ORR: Signalling market study (completed 2021)
• ORR: Automatic ticket gates and ticket vending machines (completed 2019)
• CMA: Heat networks market study (completed 2018)
• CMA: Retail Banking market investigation (completed 2016)

Market studies under the Enterprise Act 2002

Cloud services

In October 2022, Ofcom launched a market study into the supply of cloud services in the UK. The study focused on ‘cloud infrastructure services’, which are built on physical servers and virtual machines hosted in data centres around the world. Cloud infrastructure provides the foundation for how software applications are developed and run. The study explored whether any feature of the markets for cloud services, or the behaviour of providers, could dampen competition and harm consumers through higher prices, lower qualityproducts or less innovation.

Ofcom issued its final report on its market study in October 2023, and referred the market for public cloud infrastructure services to the CMA for a market investigation.

Ofcom found that competition between cloud providers is mainly focused on attracting new customers when they first move into the cloud. Ofcom’s view was that competition was being limited by market features that made it more difficult for customers to switch and use multiple suppliers (known as ‘multi-cloud’). The features Ofcom was most concerned about were:

• egress fees, which are the charges that customers pay to transfer their data out of a cloud, which Ofcom said may discourage customers from using more than one cloud provider and in some cases make switching more costly

• technical barriers, which it said meant that customers need to put additional effort into reconfiguring their data and applications to work on different clouds

• committed spend discounts, which it said can benefit customers by reducing their costs, but that the way the discounts were structured can incentivise customers to use a single cloud provider for all or most of their cloud needs

Ofcom found that while there were some positive signs of competition, there were clear indications that the cloud infrastructure market was not working well. Ofcom concluded that it had reasonable grounds to suspect that there were features of the market for public cloud infrastructure services which prevent, restrict or distort competition. On this basis, it referred the market to the CMA to carry out a market investigation.

Wholesale data

The FCA launched the Wholesale Data Market Study in March 2023. The Wholesale Data Market Study formed part of wider work on wholesale data including the FCA’s Trade Data Review published in March 2023, and the FCA’s ongoing work to develop consolidated tapes in the UK.

Wholesale financial markets rely on data to function effectively and efficiently, with wholesale data being used to identify investment opportunities, execute trades of financial assets, make investment decisions, evaluate the financial positions of firms and meet regulatory obligations. When wholesale data markets function well, users of that data can make well-informed decisions on where and how to invest. Effective investment decisions are essential for economic growth and the UK’s international competitiveness. The market study examined 3 separate but inter-linked markets:

• the provision of benchmarks across several asset classes including equities, fixed income, commodities, foreign exchange and interest rates

• the provision of credit ratings data by credit ratings agencies and their affiliates

• the provision of market data vendor services which covered the business activities of market data vendors related to the redistribution of wholesale data, including trade data, index data, credit rating data, reference data and pricing and valuation data

In August 2023, the FCA published its interim report on the market study. It provisionally found that there were reasonable grounds to suspect that there were features of each of the relevant markets that prevent, restrict or distort competition in the UK. However, the FCA’s provisional view was that a market investigation reference to the CMA was not the most appropriate way to address the competition concerns the FCA had identified, since the FCA itself was well-placed to do so as the sector regulator which also had concurrent competition powers.

The FCA published its final report in February 2024. Across the 3 markets in scope of the study, the FCA identified evidence of, and drivers for, market power which mean that users may be paying higher prices for the data they buy than if competition was working more effectively. The FCA’s next steps will focus on where the issues identified could be addressed through the Smarter Regulatory Framework and tackling firm specific issues using other tools such as powers under the Competition Act 1998. As the FCA considered it is well-placed to lead on shaping a holistic, appropriate and proportionate approach to tackle these issues, it did not make a market investigation reference to the CMA.

Railway station catering

In June 2023, ORR launched a market study into the provision of railway station catering services. ORR published an interim report on its study in December 2023. In its interim report, ORR said its emerging findings pointed toward a lack of effective competition in the occupation of station outlets.

ORR said that the rate of competitive tendering at the expiry of leases for catering outlets was very low. It found that the most common practice for station operators was to propose renewal or an extension of a lease to the incumbent catering company. ORR also found that 47% of stations with retail space have only one outlet and 24% of the catering outlets were covered by ‘protected’ leases under the Landlord and Tenant Act 1954, which may also restrict the scope of competition for occupying these premises.

ORR set out its finding that there were reasonable grounds to suspect there may be features that prevent, restrict or distort competition in connection with the supply of catering at railway stations. ORR therefore considered that the requisite legal threshold was met for it to exercise its discretion to refer the market for station catering the CMA for a market investigation. ORR explained that it did not, however, propose to make a market investigation reference to the CMA. The primary reason for ORR’s decision was the availability of potential remedies to ORR, and because it did not consider the CMA’s powers of intervention following a market investigation would be a more effective and proportionate means of addressing the issues it had identified.

On 12 June 2024, after the end of the reporting period for this report, ORR published its final report, in which it confirmed its decision not to refer the market to the CMA for a market investigation. ORR outlined a series of recommendations to a range of bodies to help ensure that the issues it identified were appropriately addressed. Further details on the outcome of the market study will be reported in the next annual concurrency report.

Market investigations under the Enterprise Act 2002

Mobile radio network for the police and emergency services

The Airwave network is a secure private mobile radio communications network for organisations involved in public safety in Great Britain. Currently, there is no alternative method for the police, fire and emergency services staff to communicate securely with each other when in the field.

In October 2021, the CMA launched a market investigation in respect of the supply of land mobile radio network services for public safety (and ancillary services) in Great Britain. In particular, the CMA was concerned that the market for the supply of the mobile radio network used by all emergency services in Great Britain might not be working well, resulting in a more expensive service for customers.

Following publication of its interim report in October 2022, the CMA issued its final report in the market investigation in April 2023. The CMA found that the Home Office and emergency services are ‘locked in’ to a monopoly provider, Airwave Solutions, and will be in that position until at least 2026, likely 2029 and possibly longer. As a result, the CMA found that Motorola can charge the Home Office (which negotiates the contracts on behalf of the emergency services) prices substantially above the levels which would be expected in a well-functioning market.

The CMA decided to impose a remedy in the form of a charge control on the prices for which Airwave Solutions provides the Airwave Network and services. The aim of the charge control is to limit the price of the Airwave Network services at a level that would apply in a competitive market, and mitigate the detrimental effects on customers (the emergency services and ultimately taxpayers).

In July 2023, the CMA published The Mobile Radio Network Services Market Investigation Order 2023 in order to implement the price cap.

Motorola applied to the Competition Appeal Tribunal for a review of the CMA’s decision, as it disagreed with the CMA’s findings - specifically that the price of the Airwave Network services was not limited by competition and on the level of profit it makes from the Airwave Network. In December 2023, the Competition Appeal Tribunal dismissed both of Motorola’s grounds of review.

Mobile browsers and cloud gaming

In November 2022, the CMA launched a market investigation into cloud gaming and mobile browsers. The market investigation followed the CMA’s market study into mobile ecosystems, which concluded in June 2022 and found that Apple and Google have substantial and entrenched market power in mobile operating systems.

Apple applied to the Competition Appeal Tribunal for a review of the CMA’s decision to make a market investigation reference, arguing that it was outside of CMA’s powers because the CMA had made the reference outside of the time-limits specified by the relevant legislation. The Competition Appeal Tribunal allowed Apple’s challenge, and quashed the CMA’s decision. The market investigation timetable was therefore suspended in March 2023, and the CMA applied to the Court of Appeal for permission to appeal.

The CMA was granted permission to appeal. In November 2023, the Court of Appeal overturned the Competition Appeal Tribunal, ruling that the CMA’s decision to make a market investigation reference was lawful. The market investigation was recommenced in January 2024, and the statutory deadline for the market investigation is in March 2025.

In an issues statement published in December 2022, before the timetable for the market investigation was suspended, the CMA outlined its initial scope for the investigation and theories on what might be affecting competition and potential remedies. The CMA explained that it planned to investigate:

• whether Apple and Google have unilateral market power in the supply of mobile browsers and browser engines, which is a source of competitive harm, and whether they are protecting this in anti-competitive ways

• whether Apple and Google are using substantial and entrenched market power in the supply of mobile operating systems and the distribution of native apps to weaken competition in the ‘downstream’ supply of mobile browsers and browser engines, and the distribution of cloud gaming services

• certain agreements between Apple and Google, in relation to browser search revenue sharing

Cloud services

Following Ofcom’s decision to make a market investigation reference having published its final report in relation to the supply of public cloud infrastructure services in October 2023 (see Cloud Services), the CMA launched its market investigation.

In October 2023, the CMA published an issues statement which outlined the initial scope of the CMA’s investigation:

• if technical barriers are making switching providers and multi-cloud (using cloud services from more than one provider) difficult for customers and whether these barriers are contributing to the lock-in of customers to a single provider

• whether egress fees act as a barrier to switching and multi-cloud, contribute to unpredictable costs for customers and hinder competition between cloud providers

• if the way discounts by existing cloud providers are structured acts as a barrier to entry and expansion among cloud providers in a way that leads to longer-term harm to competition

• the nature of the software licensing practices of the relevant cloud providers and whether these practices disincentivise customers from using rival cloud providers or raise barriers to entry in the market

The statutory deadline for the market investigation is in April 2025.^{[footnote 25]}

Follow up work on market studies and market investigations under the Enterprise Act 2002

This section sets out follow up work on market studies and market investigations which concluded prior to April 2022.

Signalling market study

ORR published its final reportin its market study on the supply of railway signalling systems in November 2021. The final report made a series of recommendations to target a number of barriers to competition that ORR had identified, in a market which has 2 large incumbent suppliers. ORR’s remedies are summarised as:

• increased regulatory oversight by ORR on signalling procurement, to increase transparency and Network Rail’s accountability

• recommendations to Network Rail to maximise its ability to exercise buyer power

• recommendations to Network Rail to treat open interfaces as a priority

  See Also

  Tackling the transition: Vodafone UK’s Carbon Reduction Plan

• recommendations to Network Rail to address how it balances long term competition with reliance on existing technology

• recommendations to a number of bodies to reduce the uncertainties faced by signalling suppliers, including uncertainties around the volumes of work awarded to them, and to reduce the risk when developing new technologies

In July 2022, ORR published its first monitoring paper summarising progress with implementation of its recommendations. In April 2023, ORR published a second remedies monitoring report updating on progress since July 2022. ORR concluded that Network Rail had addressed the majority of the recommendations and that there was no need for continued close regulatory oversight. Going forward, ORR would monitor the recommendations on a ‘business as usual’ basis, through data collection and existing regulatory mechanisms.

ORR continues to engage with Network Rail towards full implementation of recommendations made which aim to increase competition in procurement of signalling equipment in the new Control Period that began in April 2024 and runs to March 2029.

Heat networks market study

The CMA’s market study into heat networks (systems that heat multiple homes from a central source) concluded in July 2018. The UK government responded to the market study in December 2018, accepting the CMA’s recommendations that a new regulatory framework should be established to ensure consumer protection for all heat network customers and consulting on high level options for implementation.

During 2022 and 2023, Ofgem supported the government with the development of heat networks regulation and continued to develop its internal regulatory processes to prepare for the start of regulation. The Energy Bill received royal assent in October 2023 and appointed Ofgem as the heat networks regulator. Ofgem is working with the government to extend Ofgem’s regulatory remit in respect of heat networks to cover the enforcement of the Competition Act 1998 prohibitions and market study powers under the Enterprise Act 2002.

In recognition of significant potential for the number and scale of heat networks in Northern Ireland to increase dramatically, theDepartment for the Economy launched a consultation in January 2022 seeking views on proposalsto introduce legislation that will provide greater consumer protections and support the growth of the heat network sector, including appointing NIAUR as the sector regulator. NIAUR is engaging with Ofgem on the potential future regulation of heat networks sector.

Retail banking market investigation

The CMA’s market investigation into the supply of retail banking services to personal current account customers and to SMEs in the UK concluded in August 2016. The CMA imposed an integrated package of measures under the Retail Banking Market Investigation Order 2017 designed to address the adverse effects on competition that it identified.

One of the key measures introduced under the CMA Order was the Open Banking remedy – the CMA ordered the 9 largest current account providers in Great Britain and Northern Ireland (referred to as ‘the CMA9’) to create and pay for an Open Banking implementation Entity (OBIE) to agree, consult upon, implement, maintain and make widely available, without charge, open and common banking standards. Open Banking has been a major success in improving competition in retail banking and securing positive outcomes for consumers and businesses.

In March 2022, the FCA, together with HM Treasury, the CMA, and the PSR announced the creation of a new Joint Regulatory Oversight Committee (JROC) and the UK government and regulators’ commitment to build on the success of Open Banking. In April 2023, the JROC set out its recommendations for the next phase of Open Banking in the UK. This sets out a roadmap and a framework that will enable Open Banking to develop further in a safe, scalable, and economically sustainable way.^{[footnote 26]}

In June 2023, the JROC announced a programme of work to take forward the April 2023 recommendations. This included the launch of 2 new working groups on variable recurring payments (VRP) and the future open banking entity.^{[footnote 27]} In December 2023, the JROC published an overview of the progress made since April 2023 and identified the key next steps to continue preparing open banking for the future. In March 2024, the JROC met industry members to discuss the design of the future open banking entity, focusing on funding models and its forthcoming publication on the future entity.^{[footnote 28]}

Monitoring and enforcement of remedies imposed following previous market investigations

Over the reporting period, the CMA has continued to take action in relation to businesses failing to comply with remedial obligations following market investigations relating to the regulated sectors.

For instance, the CMA has taken action in relation to a breach of its Payment Protection Insurance Market Investigation Order 2011. The CMA publishes a full register of breaches of the CMA’s markets remedies (and mergers remedies) at the following link: Register of breaches of the CMA’s markets and merger remedies.

Market reviews and other markets work

As noted above, certain regulators have also used their sectoral powers – rather than their powers under the Enterprise Act 2002 - to carry out work to consider competition issues affecting their sectors. A summary of this type of work carried out during the reporting period is included for each regulator.

Ofcom

Monitoring compliance with the Wholesale Fixed Telecoms Market Review 2021 to 2026

In March 2021, Ofcom set out its decisions for its regulation of the fixed telecoms markets that underpin broadband, mobile and business connections, following its Wholesale Fixed Telecoms Market Review (WFTMR) for 2021 to 2026. Ofcom set a framework to promote investment and competition in gigabit-capable networks.

To address a concern that Openreach could set commercial terms that undermine new network build, Ofcom required Openreach to notify commercial terms where the price or other contractual conditions are conditional on the volume and/or range of services purchased. Ofcom continues to monitor whether Openreach is meeting the regulatory requirements and expectations imposed under the WFTMR.

In December 2022, Openreach notified Ofcom of a new pricing offer for its full-fibre services. Following the conclusion of the consultation on Openreach’s proposed pricing arrangement, Ofcom published a statement in May 2023 confirming that it had concluded no action was required at that time to prevent the new terms from being introduced.

In June 2023 Ofcom opened an investigation into Openreach’s compliance with its quality of service obligations. These obligations had been introduced under SMP Condition 10 as set out in the WFTMR for 2021 to 2026 and were imposed with the intention of ensuring that Openreach provides an appropriate level of service to its customers.

In March 2024, Ofcom found that BT, through Openreach, had contravened some of those quality of service standards. After taking account of circ*mstances affecting its performance, and the steps taken by Openreach to comply with BT’s quality of service obligations under these circ*mstances, Ofcom decided not to impose a financial penalty for the breaches.

In March 2024, Ofcom announced that it was starting work on the Telecoms Access Review 2026, which will set the regulations that will apply to the UK fixed telecoms market from April 2026 to March 2031. The review seeks to ensure that the UK’s broadband infrastructure is fit for the future and will aim to set the right environment to promote competition and investment in gigabit-capable broadband, to deliver better services and more choice to consumers.

Ofgem

Review of the non-domestic gas and electricity market

In November 2022, Ofgem initiated a review of the retail energy market for non-domestic customers. Non-domestic customers vary considerably, and range from small business with relatively low energy usage, who may have limited knowledge of the energy market, to large industrial customers. Ofgem launched a call for input in February 2023 inviting stakeholders to comment on the state of the market, and respond to the concerns which had been raised by stakeholders. These include concerns in relation to pricing and contractual behaviours; competition in the non-domestic energy market; and the regulatory support available for specific groups of customers.

Ofgem published a Policy consultation in July 2023 setting out the findings of its review and proposed actions, and a Statutory consultation in December 2023 on proposed license changes.

As part of its review, Ofgem looked at factors which affect how easily customers could switch contracts with suppliers, given its role in supporting effective competition. Ofgem received significant evidence of issues related to the processes for businesses switching suppliers when they move into new premises, and intends to work with industry to standardise the documents businesses need to provide as part of this process.

Ofgem also looked at the transparency of contracts, so that customers could understand their terms and make the right decisions for their business. Ofgem proposed to require clarity for all businesses on the fees being paid as part of supply contracts to ‘third party intermediaries’, which are businesses sitting between customers and suppliers.

FCA

Cash Savings Market Review

The FCA announced in June 2023 that it would report on how well the cash savings market is supporting savers to benefit from higher interest rates, amid renewed concerns that not all savers are getting good deals.^{[footnote 29]} In July 2023 the FCA published its Cash Savings Market Review. This report analysed the current state of competition in the cash savings market, set out the consumer outcomes the FCA expects, and the actions needed to achieve them.

The FCA found that competition is delivering better rates for savers who shop around but many longstanding easy access customers are penalised. The FCA also identified a number of concerns relating to the pace and scale at which firms pass through higher interest rates, the process for switching saving accounts, and the prompts that firms provide to consumers to make use of better savings products.

In light of these findings, the FCA set out a 14 point action plan to improve competition in the savings market and help make sure that consumers get better savings outcomes. In relation to improving competition, this included requiring firms offering the lowest rates to provide their fair value assessments under the Consumer Duty,^{[footnote 30]} reviewing the timing of firms’ savings rate changes each time there is a base rate change, and analysing the difference between on-sale and off-sale products. The FCA set out 6 expectations on banks, as part of the action plan.^{[footnote 31]} The FCA’s first analysis of the different rates offered by banks was published in December 2023 alongside an update on the wider action plan.

Big Tech entry into retail financial services

In October 2022, the FCA published a discussion paper seeking views on the potential competition benefits and harms from the entry and expansion of ‘Big Tech’ firms into a range of retail financial services sectors.

In July 2023, the FCA published a Feedback Statement summarising the responses received to its discussion paper, which included a wide range of stakeholders such as Big Tech firms, regulated financial services firms, trade associations, challenger firms, consumer organisations and research institutions.

The FCA identified key themes arising from the feedback, including that Big Tech firms should not be treated as a hom*ogeneous group given their differing business models and strategies, the need to broaden the analysis to incorporate additional sectors (for example, investment management, wealth management plus others), the role of data access and data sharing, the need to address potential challenges with Big Tech firms operating at the boundary or outside the regulatory perimeter, and the potential overlaps with regulators and other regimes.

As part of its next steps, the FCA committed to launch a Call for Input on Big Tech firms as ‘gatekeepers’ and key drivers, including the role of data sharing asymmetry between Big Tech firms and financial services firms, by the end of 2023. The FCA also committed to reviewing its supervisory approach for Big Tech firms to improve how it monitors Big Tech activities within and outside its regulatory perimeter, as well as continue its work with the UK government and the CMA as the Digital Markets, Competition and Consumers Bill passed through Parliament (as noted at Digital markets competition and consumers act, the Digital Markets, Competition and Consumers Act gained Royal Assent on 24th May 2024).

In November 2023, the FCA published a Call for Input, seeking focused information and evidence on whether the data asymmetry between Big Tech and financial services firms can influence how effectively competition evolves in retail financial services markets in the future. The FCA is also asking for evidence on other significant factors that have evolved since publication of its Feedback Statement and whether these could lead to Big Tech firms gaining market power in financial services. The feedback period ended in January 2024 and the FCA published a feedback statement in April 2024, after the end of the reporting period, setting out its proposed steps.

Multi-occupancy buildings insurance

In January 2022, the Secretary of State for Levelling-up, Housing and Communities asked the FCA, in consultation with the CMA, to review the market for multi-occupancy buildings insurance, in the context of price increases and the restriction of coverage available following the Grenfell tragedy.

In September 2022, the FCA reported on the findings of its review, identifying a range of potential remedies to give leaseholders in the UK greater protections from high buildings insurance prices, and to ensure the buildings insurance market operates better for leaseholders.

The FCA implemented new rules in September 2023 to improve the information which is provided to leaseholders about their insurance arrangements, and also require firms to consider leaseholders’ interests when designing and pricing their products. The rules also prohibit remuneration practices which are not consistent with leaseholders’ interests. These rules came into force in December 2023.

Credit information market study

In June 2019, the FCA launched a market study into the market for credit information. Credit information is used to help the assessment of the financial standing of consumers and plays a key role in enabling access to a range of financial and non-financial services. The market study was paused in April 2020 to enable the FCA to prioritise other work during the COVID-19 pandemic and relaunched in July 2021. In November 2022, the FCA published the Credit Information Market Study interim report which flagged the aspects of the credit information market that were not working well and a potential package of remedies.

In December 2023, the FCA published its Credit Information Market Study final report. This report included the FCA’s proposed package of remedies aimed at addressing the concerns identified in the market, and next steps. The remedies can be grouped into 4 themes:

• industry governance – reform of industry governance arrangements to help deliver key measures and provide greater transparency and accountability

• data quality – improving the coverage, quality and consistency of credit information to help deliver better outcomes

• consumer awareness and engagement – support for consumers to improve awareness of and access to credit information

• competition and innovation – fostered through potential changes to data access arrangements and more timely reporting of key metrics

The proposed remedies work together as a package, a key part of it being the reform of the governance arrangements. As part of these remedies, the FCA has formed an advisory Interim Working Group (IWG) with industry, led by an independent chair. The IWG will produce recommendations to the FCA on the design, implementation, and operation of a new Credit Reference Governance Body. The IWG started work in January 2024 and is expected to complete its work after 9 months. The FCA is also planning to publish a consultation paper on rules for mandatory data sharing by the end of 2024.

PSR

In October 2022, the PSR published the final terms of reference for 2 market reviews into card fees. The reviews focus on Visa and Mastercard, as these businesses account for 99% of debit and credit card payments in the UK.

Market review into cross border interchange fees

One market review concerns cross-border interchange fees for consumer transactions between the UK and the European Economic Area (EEA) when the cardholder is not present, such as online sales. Since the UK’s departure from the EU, these fees have been increased by Visa and Mastercard approximately fivefold. In 2022, UK acquirers paid EEA issuers £150 million to £200 million more than they would have if Mastercard and Visa had not increased their fees. The PSR considers this may be adversely affecting UK businesses and ultimately consumers, as merchants may pass the increased costs on to them (at least in part).

The PSR published an interim report in December 2023 which set out its provisional concerns that Mastercard and Visa have likely raised these fees to an unduly high level, at the expense of UK businesses. The PSR is proposing to introduce a price cap to protect UK businesses from overpaying on these interchange fees. Subject to the PSR’s final report and further consultation on remedies, this could happen in 2 stages:

• an initial time-limited cap of 0.2% for UK-European Economic Area (EEA) consumer debit transactions and 0.3% for consumer credit transactions (where the transactions are made online at UK businesses)

• a lasting cap on these interchange fees in the future once further analysis has been carried out to establish an appropriate level

Market review into scheme and processing fees

The second market review concerns scheme and processing fees charged by card payment system operators (eg Visa or Mastercard) to issuers and acquirers:

• scheme fees are charged in return for services relating to participation in the card system

• processing fees are charged for authorisation, clearing and settlement services for card payments

The PSR’s work on its earlier card-acquiring market review, as supplemented through its ongoing work with stakeholders, showed that the fees paid by ‘acquirers’ (organisations that process card payments for merchants) had increased significantly since 2014. The PSR has since received additional information, including through meetings and information requests, from the payment schemes, and other stakeholders. The PSR has continued its work analysing the profitability of the schemes, the competitive constraints they face in setting their fees and how these fees have changed over time. This includes some of the most significant fee changes, and to understand the relationship between the schemes and their customers (issuers and acquirers).

The PSR has been analysing the information that has been provided to it so far and has published a series of working papers to elicit further views from stakeholders on key issues as part of its review.^{[footnote 32]}

Ofwat

Expanding the scope for competition in the developer services market

Developer services describe the activities delivered to connect new developments to the public water and/or wastewater networks. They comprise site specific developer services and network reinforcement.

Network reinforcement work – to support the additional demand from new connections - is mostly delivered by the incumbent monopoly water companies. However, site specific developer services activities are mostly contestable and can be provided by the incumbent water company or by third party providers (a self-lay provider or a new appointee). These third parties may provide faster, more responsive services and lower prices than the incumbent water company. They can also sometimes provide developer services across utilities, reducing coordination issues.

There has been substantial growth in competition for developer services in the water sector in recent years, notably with the expansion of the market for new appointees. However, the extent of competition from third parties varies from company to company, and between different types of new development.

Ofwat is making changes to de-regulate developer services from April 2025 (as part of Ofwat’s price review in 2024). The new approach will remove site specific developer services activities from the ‘water network plus’ price controls for English companies, and from the wastewater network plus price control for English and Welsh companies. This means the incumbent monopoly water companies’ provision of these services will be fully exposed to competition from other providers, although they will still be subject to regulation via Ofwat’s charging rules and general competition law powers.

As part of this work, Ofwat consulted in August 2023 on changes to its charging rules for English water companies (Ofwat does not set the equivalent charging rules for Welsh companies) which aim to protect customers following the deregulation of certain aspects of developer services. The measures Ofwat consulted on were aimed at protecting those developer customers with limited choice in the market (requiring companies to tether charges for typically uncontested sites to those of typically contested sites, for example), provisions for increased transparency of charges, and greater transparency in regulatory reporting.

Annual review of the business retail market

Since April 2017, around 1.2 million business customers in England have been able to choose their supplier of water services, rather than being restricted to their regional monopoly.

In September 2023, Ofwat published a Business Retail Market Update for the period April 2022 to March 2023. Ofwat noted that the landscape of retail suppliers in the market continues to evolve, with new entrants consistently gaining market share each year. Findings also included that larger customers broadly continue to be more active and engaged in the market. Nevertheless, Ofwat also highlighted that the number of small customers who switched supplier in the year had increased, notwithstanding that higher consumption customers are more likely to switch compared to smaller customers. Ofwat also noted that total complaints received by the Consumer Council for Water (‘CCW’) fell in 2022/23 by about 3% compared to 2021/22, below the 10% reduction target set by CCW. Around 3 quarters of customer complaints to CCW concern billing and charging.

Ofwat is reviewing its overall approach to market monitoring and customer research during 2023/24, including the question of the extent to which competition is protecting customers’ interests. Ofwat is also keen to ensure that its ongoing monitoring targets relevant areas of the market, and continues to align with, or complement, industry objectives. Ofwat anticipates publishing its next market update in the second half of 2024, which would, where relevant, reflect any changes in approach to its market monitoring.

ORR

Market monitoring of open access services

There are 2 types of train operator running passenger services in Great Britain: contracted operators who hold contracts with the UK government to run services and open access operators that work independently of, and often compete with the contracted operators on certain routes. Open access operators introduce competition to the railway sector in a way that has been shown to deliver benefits to passengers. In deciding whether to grant these operators access to the network, ORR seeks to balance the benefits that open access operators can bring through increased competition (for example, through lower fares or innovation) against the potential costs to incumbent operators and the government through lower franchise values.

In May 2023, ORR published a report updating on its monitoring and response to open access passenger services on the railway network in Great Britain.

ORR’s report found that there has been continued growth in the open access market. Following the pandemic, open access operators have tended to recover passengers and revenues quicker than other operators, and there has been no notable difference between the punctuality of contracted and open access operators. The report also noted that the open access operators have requested more clarity and transparency in the track access application process, and outlined the latest developments in open access competition, including the approval of a new open access operator, Grand Union Trains, which will offer a new train service on the Great Western Main Line, between Carmarthen and London.

NIAUR

Review of the Regulation of the Non-Domestic Energy Retail Market

In May 2023, NIAUR initiated its ‘Review of the Regulation of the Non-Domestic Energy Retail Market’. Following a period of research, evidence gathering and engagement with customer representatives, NIAUR launched a Call for Inputs in December 2023 inviting comment on the non-domestic retail market and responses to the concerns which had been raised by stakeholders. These concerns were in relation to 4 main areas: the operation of third-party intermediaries, the treatment of customers in debt, transparency and information, and contract terms.

Since the end of the relevant reporting period but before the publication of this report, NIAUR published its Position Paper marking the formal end of the review in May 2024. The paper summarises the stakeholder responses to the Call for Inputs. It also outlined the NIAUR projects that will seek to remedy the gaps identified in the existing non-domestic regulatory framework, to ensure fair engagement and outcomes in the retail energy market for non-domestic consumers. These outlined projects were included in NIAUR’s Consumer Protection Programme (CP24) which was published at the end of March 2024.

General cooperation

The CMA and regulators have continued to cooperate more generally, in line with the practical arrangements set out in the Concurrency Regulations, the Concurrency Guidance and the bilateral Memoranda of Understanding agreed between the CMA and each of the sector regulators.

Information-sharing

In line with previous years, the CMA and the sector regulators have continued during the period of this report to exchange key information in respect of the particular cases that they have been investigating. This includes the authority investigating a particular case sharing emerging thinking and draft decisions of key documents, as provided for in Regulation 9 of the Concurrency Regulations and the Memoranda of Understanding, and the supporting authority (for example, any authority that has jurisdiction but to which the case has not been allocated) providing comments on those key documents. Additionally, and as in previous years, the CMA and the sector regulators have augmented the prescribed information-sharing process with more informal discussions and the sharing of know-how and relevant expertise.

Case allocation

During the relevant reporting period, 2 new Competition Act 1998 cases were allocated to the FCA, one case was allocated to Ofgem, and one case was allocated to the CMA. The CMA and the regulators have engaged in constructive discussions on the allocation of concurrent cases, resulting in agreement having been reached in each case in accordance with the Concurrency Regulations.

Assistance on policy development

The sector regulators have assisted the CMA in certain areas of policy development.

This includes providing input to the CMA as it prepared new guidance on the application of the Chapter I prohibition to agreements between actual and potential competitors (Guidance on Horizontal Agreements). For example, Ofcom provided input on the section of the guidance concerned with mobile telecommunications infrastructure sharing agreements.

The regulators also provided input as the CMA prepared its guidance on the application of the Chapter I Prohibition to environmental sustainability agreements (Green Agreements Guidance). The CMA is operating an open-door policy whereby businesses considering entering into an environmental sustainability agreement can approach the CMA for informal guidance on their proposed agreement if there is uncertainty on the application of the Green Agreements Guidance. The CMA has indicated in the Guidance that, if the agreement concerns a regulated sector, the CMA will also consult the relevant sector regulator when considering requests for informal guidance under the open-door policy.^{[footnote 33]}

The CMA has consulted the sector regulators in relation to its ongoing review into settlement in Competition Act 1998 cases. The CMA has sought the views of regulators on various potential changes to the settlement process.

The CMA has also consulted the sector regulators as part of preparations for the reforms to the competition powers, under the Digital Markets, Competition and Consumers Act, including updating sector regulators on potential changes to CMA guidance.

Under the Digital Markets, Competition and Consumers Act, there will also be significant reforms to the consumer protection landscape and the consumer law enforcement toolkit of the CMA and the sector regulators. The CMA will have the ability to make decisions about whether certain consumer laws have been breached as well as strong fining powers for substantive and procedural breaches.^{[footnote 34]} The Digital Markets, Competition and Consumers Act will also enhance the existing court-based regime for the CMA and other consumer law enforcers, including relevant sector regulators, by empowering the courts to impose monetary penalties on traders who breach consumer laws or do not comply with undertakings.^{[footnote 35]} It will also introduce new rules on subscription traps and drip pricing which will sit alongside sector-specific requirements.

Special energy network mergers

As each energy network enterprise is effectively a regional monopoly for its network service, comparative regulation has underpinned the way Ofgem has regulated the energy network sector since privatisation. Ofgem uses comparisons both during the price control process, for example in setting price limits and service quality requirements or to set incentives, and between price controls, for monitoring and enforcement and spreading best practice.

The Energy Act 2023 introduces a special merger regime which empowers the CMA to investigate energy network mergers in Great Britain, alongside the ‘ordinary’ merger control regime the CMA is responsible for. The special energy network merger regime is intended to ensure that a merger between 2 or more energy network enterprises of the same type in Great Britain will not substantially prejudice Ofgem’s ability to make comparisons between energy network enterprise.

In a special energy network merger review, the CMA is required to request, and Ofgem must give, its opinion on whether the merger may prejudice its ability to carry out its statutory functions to make comparisons between energy network enterprises of the type involved in the relevant merger situation. Ofgem and the CMA have both worked together on the preparation of guidance relevant to the operation of the new regime.

Assistance on casework

The CMA and sector regulators continue to provide each other with assistance on casework. Assistance is provided in a range of ways, including by sharing practical experience and expertise (for example, regulators have shared their sector-specific knowledge on cases and the CMA has shared relevant substantive and procedural expertise on competition cases) and through involvement of officials at key stages of an investigation (example, the provision of digital forensics support). There is also sharing of relevant policy, such as internal guidance and template documents.

Assistance on competition enforcement

The CMA and the sector regulators continue to provide each other with assistance on their respective Competition Act 1998 investigations in the regulated sectors.

In particular, the CMA has provided those regulators undertaking cases with relevant procedural advice and practical assistance on cases as well as feedback on draft documents such as draft infringement decisions. For example, the CMA reviewed and commented on a draft of the FCA’s infringement decision in respect of the supply of international money transfer services in Glasgow (see Financial Services). The CMA also provided assistance to Ofgem as it launched its investigation into a suspected infringement of the Chapter II prohibition in the energy market, by sharing templates in addition to cooperation throughout the case allocation process. Ofcom has also provided support to the CMA in a number of investigations into suspected breaches of competition law by reviewing draft documents and sharing its practical experience of digital markets and broadcasting.

Google’s distribution of apps: The CMA received assistance from the PSR in its investigation into Google’s distribution of apps on Android devices in the UK. In particular, the PSR assisted the CMA in its assessment of the commitments offered by Google in relation to payment systems for in-app purchases.

Atlantic Joint Business Agreement: The CMA engaged with the CAA in relation to the restart of the CMA’s investigation into the Atlantic Joint Business Agreement. The CMA had previously imposed interim measures which expire in March 2026. The CMA plans to complete its investigation and, if appropriate, put in place a longer-term remedy, before the interim measures expire.

Assistance on markets work

In accordance with the concurrency arrangements, the CMA and the sector regulators have provided each other with sector specific expertise to assist markets work.

Railway catering: ORR engaged with the CAA in relation to its market study into railway station catering, to discuss the similarities and differences with the airport catering market, while the CMA supported the ORR by discussing the scope of the study and potential remedies.

Card fees market reviews: The CMA and the PSR worked together on relevant procedural matters relating to disclosure in the PSR’s card fees market reviews.

Cloud Services: The CMA engaged with Ofcom in relation to its market study into cloud services, with Ofcom subsequently referring the market for public cloud infrastructure services to the CMA for a market investigation (see Market studies under the Enterprise Act 2002 and Market investigations under the Enterprise Act 2002).

Assistance on mergers work

Reviewing mergers is an important function performed by the CMA as the national competition authority. Although mergers do not fall within the scope of concurrency, where the CMA is investigating a merger involving a regulated sector, it often receives valuable input and assistance from the sector regulators.

The CMA is also in frequent contact with sectoral regulators when monitoring merger activity in the UK. During this reporting period, the CMA’s merger intelligence unit worked together with the relevant sector regulation on 32 transactions, and most sectoral regulators assisted the CMA’s merger intelligence unit in at least one transaction and often several more.

Communications

The CMA has benefited from Ofcom’s assistance in its investigation of the anticipated joint venture between Vodafone and Three to combine the companies’ telecommunications operations under one single network provider. Ofcom has shared expertise, relevant research and, in some permitted circ*mstances, data which Ofcom holds where the parties have provided their consent. The CAA has also engaged the CMA on this merger.

In addition, the CMA’s merger intelligence unit contacted Ofcom in relation to 7 other transactions.

Financial services

The FCA assisted the CMA with understanding the relevant regulatory framework as part of the CMA’s investigation into 5 acquisitions, including the acquisition by Bloomberg of Broadway Technology and the acquisition by Nucleus of Curtis Banks.

The FCA also assisted the CMA in 10 transactions under consideration by the CMA’s merger intelligence unit.

Energy

In the energy sector, Ofgem supported the CMA with sector expertise and intelligence on a range of corporate transactions, including the acquisition by Électricité de France SA of the nuclear steam power business owned by the General Electric Company.

In addition, the CMA’s merger intelligence unit contacted Ofgem in relation to 8 other transactions.

Payment systems

The PSR provided payments systems expertise to the CMA’s merger intelligence unit when considering whether 5 transactions warranted a detailed merger assessment.

Rail

ORR continued to assist the CMA by providing technical insight to the CMA in relation to its investigation of the anticipated acquisition by Hitachi Rail of Thales SA’s Ground Transportation Systems Business.

The CMA’s merger intelligence unit also benefited from ORR’s advice when considering whether 2 other transactions warranted a detailed merger assessment.

Water

The CMA has liaised with Ofwat in relation to the acquisition of Sumisho Osaka Gas Water UK by Pennon Group.

Multilateral cooperation

UKCN

In addition to the regular bilateral meetings that the CMA holds with the sector regulators, cooperation occurs multi-laterally through the UK Competition Network (UKCN).

The UKCN seeks to facilitate the use of competition powers and the development of pro-competitive regulatory frameworks. This cooperation has the function of ensuring consistency in the application of the competition regime but also in facilitating the sharing of best practice and knowledge.

As part of this function, the CMA and sector regulators hold regular discussions on current topics of interest and give presentations based on their experiences of specific issues from their competition work.

Some examples of topics covered this year include recent developments in private competition law enforcement, updates and presentations from regulators and the CMA on their respective casework and litigation, discussions on the Digital Markets, Competition and Consumers Act as it passed through Parliament and preparations for the legislative changes. Other topics discussed included wider policy matters including new guidelines on the application of the Chapter I prohibition to horizontal agreements, sustainability agreements, and making recommendations as part of market studies.

Digital Regulation Cooperation Forum

In response to the wide-ranging nature of digital markets and the sector regulators that could be involved, the Digital Regulation Cooperation Forum was launched in July 2020 to support the coordinated regulation of digital markets. Membership of the DRCF is comprised of the CMA, FCA and Ofcom, and the Information Commissioner’s Office.

The DRCF allows for enhanced cooperation between the different regulators seeking to address the unique challenges posed by regulation of online platforms in a joined-up fashion.

The DRCF has addressed a number of key developments in digital technology over the past year, publishing its thinking in areas such as Quantum Technologies and the issues that regulators should be thinking about now to prepare for a quantum-enabled world.

In September 2023, the DRCF announced that it would pilot a new multi-regulator service – the DRCF AI and Digital Hub - to help innovators develop their ideas with regulatory compliance in mind. The new UK government-funded service will support AI and digital innovators with queries that span regulatory remits. The overall aim of the Hub is to increase innovators’ confidence in bringing new AI and digital products safely to market, by helping them understand and navigate regulatory requirements. The DRCF AI and Digital Hub launched on 22 April 2024.

Further information on the work of the DRCF can be found in its Annual Plan 2023 to 2024.

Secondments

Secondments continue to be an important way of sharing expertise and transferring knowledge between the CMA and the sector regulators. By way of illustration of how secondments facilitate this sharing of knowledge and expertise, a member of Ofcom’s enforcement team was seconded to the CMA in September 2022 to provide case support for the investigation into suspected infringements of the Chapter I prohibition in relation to the purchase of freelance services and the employment of staff supporting the production and broadcasting of sports content in the UK. During the 12-month secondment, the secondee applied existing competition and regulatory enforcement skills to assist with case management, evidence analysis and engagement with the case parties and other stakeholders. In addition to helping strengthen the working relationship between the CMA and Ofcom, the secondment allowed the CMA to harness Ofcom’s knowledge and expertise of the broadcasting sector to assist in the investigation.

During the period of this report, there were approximately 20 active secondments (including the above example) between the sector regulators and the CMA.^{[footnote 36]}

Ofcom

There was a secondment from the CMA to Ofcom’s cloud services market study of 2 members of staff who were seconded for a year from August/September 2022.

There was a reciprocal secondment between the CMA and Ofcom, with an economist moving from the CMA to Ofcom and vice versa. Both secondments started in June 2023 and are due to last for a year.

As referred to above, there was a secondment to the CMA from Ofcom, to provide case support for the CMA’s investigation into suspected infringements of the Chapter I prohibition in relation to the purchase of freelance services and the employment of staff supporting the production and broadcasting of sports content in the UK. The secondment began in September 2022 and lasted a year.

There was a secondment to the CMA from Ofcom of 2 members of staff in late 2023 to provide support for the CMA’s cloud services market investigation. One member of staff was seconded for 3 months and the other is due to remain on secondment for 18 months.

There were 2 secondments from Ofcom into the CMA’s Digital Markets Unit. Both secondments were for a year, with the first starting in November 2022 and finishing at the end of October 2023, whilst the second secondment began in February 2024 and is due to last for a year.

Ofwat

There was a secondment from the CMA to Ofwat to provide research expertise which began in the previous reporting period and ended during this reporting period. There was a secondment from Ofwat to ORR to provide maternity cover which began in the previous reporting period and ended during this reporting period.

FCA

There were 3 secondments from the FCA to the CMA which began in the reporting period. 2 secondments into the CMA’s Digital Markets Unit started in November 2023 and are due to last for a year, whilst the other secondment started in January 2024 and is scheduled to end in July 2024.

There was a secondment from the FCA to Ofcom which began in October 2022 and ended in June 2023.

There was a secondment from Ofgem to the FCA which began in August 2023 and is scheduled to end in July 2024.

There was a secondment from Ofcom to the FCA which began in October 2023 and ended in April 2024.

PSR

There was a secondment from the FCA to the PSR legal team to work on knowledge management matters. The secondment started in January 2024, and lasted for 3 months.

Ofgem

There were 2 secondments from the CMA to Ofgem which began in the previous reporting period. One secondee is working on consumer issues relating to domestic consumers on non-domestic contracts with the non-domestic retail policy team, whilst the other secondee is providing oversight on Ofgem’s British Gas PPM investigation.

There was a secondment from the CMA to Ofgem which began in late 2023 to provide support for Ofgem’s Chapter II investigation into the energy market.

There was a secondment from Ofgem to the CMA of a trainee solicitor.