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Competition and Markets Authority Scotland Update Jan 2020

In the second of our quarterly stakeholder newsletters, meet Simon Roberts, Director for Economics, and find out more about what the team based in Edinburgh have been doing.

I joined the CMA’s Edinburgh office having recently moved back to Scotland after close to 25 years in South Africa. During my time there, I had a stint as Chief Economist at the Competition Commission of South Africa followed by time spent establishing the Centre for Competition, Regulation and Economic Development at the University of Johannesburg.

There are some interesting similarities between South Africa and the UK in the realm of competition. In both countries a reform agenda is being advanced to improve the ways markets work for consumers, reflecting questions about how the economy has been working in practice.

Under democracy in 1994, South Africa adopted a far-reaching liberalisation programme and established the competition authorities in 1999 as the independent market referee. The South African competition regime is generally viewed as quite successful with effective merger review and a large number of cartels having been uncovered. However, the economy remains highly concentrated and extremely unequal. There are substantial barriers to the entry and growth of smaller firms, in particular, those owned and controlled by black South Africans.

Major changes to the law, introduced in early 2019, include provisions to address price discrimination, excessive pricing, buyer power and market inquiries. Interestingly the market inquiry powers appear to have been drawn from the UK experience, and the buyer power provisions are partly in response to issues in supermarkets, which are similar to those leading to the Groceries Code Adjudicator being established in the UK.

Here in the UK, the CMA has proposed legislative and institutional reforms to safeguard the interests of consumers and to maintain and improve public confidence in markets. This is partly in response to the challenges of digital platforms, with regulation described as analogue needing to be updated for the digital era.

It is indeed an exciting time to be a competition economist. We need more research in this area and I am reaching out to institutions in Scotland to collaborate on this! Get in touch (scotland@cma.gov.uk) if you’d like to know more.

Simon Roberts, Director for Economics

Update from CMA in Scotland

Consumer Scotland Bill

We have been working with the Scottish Government as they have developed plans for Consumer Scotland.

  • In September, we submitted a response to the Scottish Parliament's Economy, Energy and Fair Work Committee, outlining our views on the legislation.
  • Our Director, UK Nations & Director for Scotland, Sheila Scobie, gave evidence to the Committee on 5 November.
  • The Committee's stage 1 report was published at the end of December, with the stage 1 debate taking place in the Chamber before the end of this month.

Transport (Scotland) Bill

As part of our ongoing work advising on the Transport (Scotland) Bill, we published a briefing on the competition and consumer implications of Local Authorities running commercial bus services. As noted by Cabinet Secretary Michael Matheson, we will continue to work with Transport Scotland to develop further guidance for Local Authorities. If you would like to receive a copy of the briefing, or would like more information, please contact us at scotland@cma.gov.uk

Scottish Legal Services Research

We intend to publish the findings of our research into the Scottish Legal service market early this year. We have focused on the benefits of independent regulation of legal services and the impact of the current regulatory framework in Scotland on competition, particularly on innovation and the entry of new business models to the market. The latest updates can be found on our project page.

  • We also responded to the Scottish Parliament petition on equal rights for Commercial Attorneys.

University Engagement

Since our last update, Edinburgh-based staff have been engaging with a number of Scottish University law and business schools to talk about our work, including:

  • speaking about our work in Scotland at the launch event for SCALES, the Strathclyde Centre for Anti-trust Law and Empirical Study at the University of Strathclyde.
  • delivering lectures and workshops to the law schools at Glasgow and Strathclyde Universities

Competition Impact Assessment Training

We delivered competition impact assessment training to a range of Scottish Government policy teams in Glasgow. This covered a wide range of policy areas, including: Energy, Climate Change and Transport. The training outlined the importance of competition and how they can screen for competition concerns in new or existing markets. The aim of the training is to encourage policy makers to consider any impact a new policy can have on markets for the benefit of consumers.

Symposium on Consumer Detriment

In September, we held a symposium on consumer detriment in Edinburgh with breakout sessions covering a number of key areas, including, vulnerable consumers; cracking down on cartels; digital markets; and fintech and open banking. We have produced a summary covering each of the breakout discussions. If you would like a copy of the summary, please contact us at scotland@cma.gov.uk

Update from the wider CMA

The CMA will publish its Annual Plan 2020/21 for consultation later this month. Responses to the consultation will help us to set the CMAs priorities for the year ahead.

We will be holding an annual plan consultation event in Edinburgh on Monday 3 February from 1400 - 1600. If you would like more information, or register to attend, please email scotland@cma.gov.uk.

CMA lifts the lid on digital giants

In July 2019, we set out to find out more about how major online platforms like Google and Facebook operate. We are now consulting on our interim report, and welcome views by 5 pm on Wednesday 12 February. Should you wish to respond, please send an email to onlineplatforms@cma.gov.uk. Further information can be found on our project page.

Chris Jenkins, Economics Director, CMA will be speaking about the interim report at the Edinburgh Futures Institute on Monday 3 February at 1800 in the Usha Kasera Lecture Theatre - all welcome.

In December, following a phase 1 merger enquiry, the CMA cleared the proposed acquisition of SSE Energy Services Group Ltd by OVO Group Ltd. Find out more on the CMA case page.

And finally...

Did you, or someone you know, buy white goods in the New Year sales? Did you buy an extended warranty? We secured improvements to Currys' sale of extended warranties. Currys PC World has agreed to change how it sells extended warranties after its staff gave mystery shoppers incorrect information.

Credits:

Created with images by Luca Dugaro - "untitled image" • Jure Tufekcic - "untitled image" • Wesley Tingey - "untitled image" • Mikael Kristenson - "auditorium" • The Climate Reality Project - "Woman Pen Notebook" • Rich Smith - "Filament bulbs"