Businesses told to watch out as CMA complaints spike ahead of new powers
Complaints to the Competition and Markets Authority (CMA) have jumped by almost a quarter in the year leading to the watchdog being handed more power.
According to research commissioned by law firm Pinsent Masons, concerns raised about competition and consumer law surged by 23 per cent from 4,728 to 5,823 in the year to 30 March, 2024.
From next week, the CMA will be able to hand out substantial fines directly to businesses for breaching consumer law without the need to go through the court through The Digital Markets, Competition and Consumers Act.
Mirroring the fines the CMA can already impose on companies for breaching competition law, the penalties can be as large as 10 per cent of a firm’s global annual turnover.
Pinsent Masons argued the businesses in sectors that are subject to a high number of complaints “should be particularly concerned” as that makes their industry more likely to be the subject of a CMA investigation.
The law firm points to the 424 complaints that were made to the watchdog regarding veterinary services between 1 April, 2023, to 31 March, 2024 – the highest of any sector.
An investigation into the bets market was launched in March last year, with a conclusion expected this autumn.
The top 10 markets subject to CMA complaints
- Pets and vets – 424
- Supermarkets – 316
- Digital markets – 281
- Property management – 247
- Digital entertainment – 229
- Fuel – 227
- Financial – 198
- Internet retail – 189
- Online bookings of holidays – 154
- Advertising – 142
According to the research, the sectors with the biggest jump in complaints to the CMA include:
- Life insurance – 475 per cent to 23
- Agricultural – 467 per cent rise to 17
- Vehicle insurance – 400 per cent rise to 115
The research comes after the CMA accused Ticketmaster of misleading Oasis fans during the brand’s highly anticipated ticket sale, suggesting that some may have overpaid for seats that offered no real advantage.
The watchdog has demanded changes to how Ticketmaster labels tickets and displays pricing information, following widespread complaints from fans who felt shortchanged.
Pinsent Masons partner Angelique Bret said: “Businesses must be prepared for the CMA’s new consumer law enforcement powers, or risk facing substantial fines, including the potential for individuals (employees or directors involved) to be fined up to £300,000.
“The potential scale of the fines has been chosen to make complying with consumer protection law a boardroom issue.
“The CMA will expect those at the top of any organisation to be taking this seriously; this may require a change to business models and strategy.
“Any misleading marketing or online choice architecture (e.g. for e-commerce sites), including drip pricing, subscription traps and fake reviews, for example, will carry a much high risk for businesses.”
She added: “Customers who see that a business is under investigation by the CMA may lose confidence in that business.
“The CMA can issue press releases at an early stage in the investigation process, even before a breach of the law has been established.
“Businesses looking to avoid the risk of formal investigation must ensure they’re compliant with consumer protection laws by carrying out compliance audits and putting in place robust compliance polices and procedures.”