The Competition and Markets Authority in Scotland
It has been a momentous couple of years for the CMA. We have significantly expanded our presence in Scotland. We have been preparing to take on new responsibilities following the UK’s exit from the European Union. We also proposed reforms to update our duties and powers to bolster competition and consumer protection. This is alongside our continued commitment to promote competition for the benefit of UK consumers.
The work that the CMA does affects millions of households and businesses across the UK. For example, ensuring competitive prices for groceries or recommending the government addresses deep-seated problems identified in the audit market. Competition is good for consumers and business. It means that people get better products at lower prices. It helps ensure that the most consumer-focused and innovative businesses are the ones that succeed. Our work has an important role in encouraging effective competition across the UK.
Weakening competition
Competition in the UK however appears to be getting weaker. Concentration and profitability in some sectors are high and rising. Many markets are not as competitive as they should be, or as they used to be. Profit margins have risen substantially. Practices that harm consumers and damage trust in markets, which effective competition should drive out, persist. That is why, as the UK’s primary competition and consumer authority, the work of the CMA is fundamental.
Legislative reform
We believe that legislative reform is necessary to update our duties and powers to bolster competition and consumer protection. Our current powers are outdated in a fast-moving digital age. That is why we need reform to make regimes swifter, stronger and more flexible. Our Chairman, Andrew Tyrie, is leading our work to press the government for new laws to be introduced.
CMA expansion
A great proportion of our time in recent years has been preparing to take on new responsibilities for transnational mergers and cartel cases at the end of the implementation period on 31 December this year. The European Commission previously had exclusive jurisdiction of these. Now, we will be responsible, in parallel or separately. We don’t underestimate the task and have been recruiting significantly to ensure we are ready for the new business.
That includes recruiting seriously in Scotland. The CMA is an independent authority with a UK-wide jurisdiction. We take our UK-wide responsibility seriously. While we are headquarted in London, we have an expanding presence in Edinburgh, Belfast and Cardiff. Over the last two years the CMA has undergone a significant expansion in Scotland, growing from just three, to over 50 members of staff. The team based in our Edinburgh office represent all of the CMA's core professions – legal, economist, financial analysis, investigation and project delivery staff.
Edinburgh presence
This increase in resource means that a great deal of CMA work that matters most to Scotland will now be done from Edinburgh. Last summer we announced our first Scotland-specific project to be run out of the expanded office in Edinburgh. We are undertaking research into certain aspects of the Scottish legal service market to support the Scottish Government’s response to the Roberton Review. This includes considering the impact of the current regulatory framework on competition. Particularly the impact on innovation and the entry of new business models to the market. New business models such as alternative business structures (ABS). We expect to publish our findings in the next couple of months.
Our Edinburgh expansion has equally allowed us to devote Scottish resource to making our UK work more relevant to consumers in Scotland. For example, we have several people in Edinburgh working on our investigation into the funeral market. In practice this means that we can engage directly with MSPs, consumer groups and businesses who have an interest in our work. Our funeral market investigation was, in part, prompted by the high levels of public and political concern in Scotland about the increasing cost of funerals.
Stay up to date
It has been a busy few years for the CMA, and with the sustained importance of competition for our Scottish and UK-wide economy, it seems likely that it will continue to be. If you would like to be kept up to date with the CMA’s work in Scotland, you may find our quarterly newsletter of interest. To be added to the distribution list please contact scotland@cma.gov.uk.