CMA Must Issue More Fines to Justify Budget, State Auditor Saysby
Agency faces fresh criticism for being lenient with business
Regulator is committed to increasing number of cases, CMA says
The U.K.’s competition regulator, already under fire from lawmakers for being too lenient with banks, faced new criticism Friday for handing out too few fines compared with its European counterparts.
The Competition and Markets Authority faces “big challenges” to increase the number of successful enforcement cases it brings, according to the National Audit Office, an independent body set up to scrutinize state spending. The U.K. issued just 65 million pounds ($95 million) of enforcement fines between 2012 and 2014, compared with almost 1.4 billion pounds imposed German authorities, the NAO said.
There are “still too few successful enforcement cases, and business awareness of competition law could be improved," said Amyas Morse, head of the NAO. "The regime has further to go to ensure that value for money is achieved.”
The criticism comes a week after the CMA decided to extend its investigation into the retail banking market following comments from lawmakers. At a public hearing in November, Alasdair Smith, chairman of the banking inquiry, faced accusations of allowing the lenders "to pull the wool over their eyes" after the provisional findings stopped short of advocating a break up of the banks.
It is the second market investigation carried out by the CMA since it was spun out of the Office of Fair Trading in April 2014. The U.K.’s energy companies also escaped the more drastic recommendations the CMA could have made, which included proposals to break up the biggest six suppliers.
Those investigations are currently using 16 percent of the CMA’s "front-line competition resources,” the NAO said. The U.K. spent 66 million pounds enforcing competition law during the period through March 2015 with 810 full-time staff. The CMA was granted an additional 12 million pounds "to expand its competition work" during the year.
"We recognize there is still much to be done," said Alex Chisholm, chief executive officer of the CMA. "We are committed to increasing both the number and the speed of our competition enforcement cases, while maintaining our emphasis on fairness and rigor."