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Insight

It's all about the consumer

"Competition is a consumer issue". This was the hallmark of a speech given last week by Europe's Competition Commissioner, Margrethe Vestager. Competition policy isn’t there to defend competitors, she says. Nor is it there to help one company and hold back another; it's there to defend consumers.

"Competition is a consumer issue".  This was the hallmark of a speech given last week by Europe's Competition Commissioner, Margrethe Vestager.  Competition policy isn’t there to defend competitors, she says.  Nor is it there to help one company and hold back another; it's there to defend consumers.

The focus on consumers has resonated close to home this week, following the Queen's Speech announcement that the Better Markets Bill will form part of the UK government's legislative agenda for the coming parliamentary session.

The purpose of the Bill is to open up markets, boost competition and "give consumers more power and choice".  The main benefits would include:

  • Giving consumers more power and choice so that they are encouraged to switch providers and get a better deal;

  • Encouraging open and competitive markets which keep costs low and deliver for bill payers (particularly in the energy market); and

  • Speeding up decision-making by the Competition and Markets Authority (CMA) for competition investigations and making the whole process easier for businesses and better for consumers.

So why the drive for consumer power and protection? Well, the obvious answer is that consumers (for the most part) are the final beneficiaries from strong competition and the ultimate losers from any lack of competition (through higher costs, less choice or lower quality). 

Yet consumers are more than that. Informed, educated and active consumers drive a competitive marketplace.  It is the choices and purchasing decisions made by end consumers that dictate market requirements upstream and enable businesses to decide where to focus their investment.

This is why the CMA's vision for 2016/17 is focussed heavily on consumer powers and protection. During 2016/17, the CMA aims to launch as many consumer cases or projects as possible where it has the requisite evidence, with a minimum target of three, and aims to conclude the majority of these cases, whether by agreement or proceeding litigation, within 18 months of being publicly opened.

In terms of focus areas, online and digital markets have been identified as a key area for the CMA, particularly in relation to online reviews, the commercial use of consumer data and price comparison websites.

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