An overhaul of the UK consumer law landscape is on the horizon, with the consumer law provisions of the Digital Markets, Competition and Consumers Act 2024 set to take effect on 6 April 2025.
By Fiona Maclean, David Little, Irina Vasile, and Sean Newhouse
The Digital Markets, Competition and Consumers Act 2024 (DMCCA) represents a significant shift in the UK’s consumer protection regime. By introducing new enforcement powers and substantive obligations on top of a foundation of
PE investors may like the sound of music deals but complex issues remain.
By Tom D. Evans, Andrew Gass, Kem Ihenacho, David Little, Lisbeth Savill, David J. Walker, Jonathan West, Rachael Astin, Amrita Ahuja, Oscar Hayward, and Catherine Campbell
Music deals, particularly the acquisition of rights to songs and recordings by popular music artists, continue to be attractive investments for PE. Recent transactions underscore the ongoing demand for large-cap music assets.
The continued popularity of global streaming services and the music rental economy have helped to reduce the threat of online piracy, made revenues easier to track and predict, and ensured that strong revenues continue to flow to rights holders. Music rights will likely become even more attractive as revenues are increasingly derived from a growing number of sources, including social media platforms, video games, exercise platforms, video streaming, and virtual reality. As the use of popular music continues to broaden, rights holders will reap the dividends.
Businesses must review the Green Claims Code and accompanying guidance to determine whether their environmental claims are in compliance.
By David Little and Anuj Ghai
Background: The need for a Green Claims Code
The Competition and Markets Authority’s (CMA’s) recent publication of the Green Claims Code (the Code) and its final guidance (the Guidance) in respect of environmental claims represents the culmination of extensive consultation and investigation into claims about “green” goods and services.
In recent years, consumers have paid greater attention to the environmental footprint of the products and services that they buy and consume. In 2019, UK consumers spent £41 billion on ethical goods and services — almost four times the amount spent two decades previously. In light of increasing demand for green goods and services, in 2020 the CMA launched an investigation under its consumer protection powers into the impact of green marketing on consumers and carried out inquiries into potentially misleading environmental claims. At the end of its investigation, the CMA found that up to 40% of online green claims could be misleading. As a result of these findings, the CMA published draft guidance on environmental claims on 21 May 2021, and the final Guidance on 20 September 2021.
The proposals include certain notable changes, while also mirroring the current UK framework and the European Commission’s planned approach in many respects.
By David Little, Alexandra Luchian, and James Mathieson
The UK Competition and Markets Authority (CMA) has proposed replacing the retained Vertical Agreements Block Exemption Regulation (Retained VABER), which has applied in the UK following the country’s departure from the EU and will expire on 31 May 2022, with a UK Vertical Agreements Block Exemption Order (UK VABEO). The CMA’s proposals include a number of changes intended to reflect evolving market conditions and enforcement practice, and to widen the CMA’s existing powers.
Concurrently, the European Commission is consulting on the draft revised Vertical Block Exemption Regulation (VBER) and Vertical Guidelines, planned to enter into force in the EU at the same time as UK VABEO.
This blog post provides an overview of the key similarities and differences between (i) Retained VABER and the proposed UK VABEO, and (ii) the proposed UK VABEO and the draft EU VBER.
The CMA’s efforts to make dynamic, forward-looking assessments of parties’ overlaps will only increase post-Brexit.
By John Colahan, Tom Evans, David Little, Jonathan Parker, David Walker, Greg Bonné, Anuj Ghai, and Catherine Campbell
Dealmakers must be alert to the increasingly interventionist approach of the UK’s Competition and Markets Authority (CMA), including on transactions with a limited nexus to the UK. Until now, the European Commission has acted as a “one-stop shop” for large-cap transactions. But the end of the Brexit transition period means that from the start of 2021, acquirers may face parallel EU and UK investigations — with the effect that the CMA will play a more prominent role in reviewing global deals.
The CMA’s efforts include investigations into the package holiday and hand sanitizer industries.
By John D. Colahan and Anuj Ghai
CMA announces package holiday sector investigation
On 10 July, the CMA announced that it was investigating suspected breaches of consumer protection law in the package holiday sector. The investigation was launched on the back of work carried out by the CMA’s COVID-19 Taskforce. As noted in previous updates (see here), the Taskforce received a number of complaints about allegedly unfair practices concerning cancellations and refunds, including in relation to package holidays. The investigation specifically relates to concerns that businesses have not been respecting customers’ statutory rights to a refund for package holidays that were cancelled by either party due to lockdown restrictions. Notably, the CMA is carrying out the investigation under its consumer protection powers, rather than under competition law.
The CMA continues to field COVID-19 complaints concerning refunds and previously widespread excessive prices on day-to-day products.
By John D. Colahan and Anuj Ghai
The CMA continues to respond to complaints from consumers on COVID-19-related issues. Consumers submitted more than 80,000 complaints through 28 June 2020, with the volume decreasing from 7,000 a week in May to 3,500 a week in June.
The judgment has important implications for the competition law compliance responsibilities of company directors.
On 3 July 2020, the High Court disqualified[1] Michael Martin from acting as a director for seven years. The court found that Mr Martin had contributed to a breach of competition law by his former company, which owned and ran an estate agency (Berryman’s) in Burnham-on-Sea. This finding was made despite the fact that Mr Martin was not concerned with day-to-day sales, had not attended any of the meetings with the other estate agents where the competition law infringement had taken place, and had taken some steps following the inspection of the company by the Competition and Markets Authority (CMA) including the obtaining of legal advice that led to compliance actions.
The investigation is being carried out under the CMA’s competition law powers rather than under its consumer protection functions.
By John D. Colahan and Anuj Ghai
On 18 June, the CMA released an update noting that it had launched an investigation under Chapter II of the Competition Act 1998 into suspected breaches of competition law by four pharmacies and convenience stores. In particular, the investigations relate to suspected charging of excessive and unfair prices for hand sanitiser products during the COVID-19 pandemic.
As noted in a prior blog post, the CMA believed that there was a significant risk that prices would rise above justifiable levels in a number of sectors because of the COVID-19 outbreak, coupled with the restrictions on businesses and people. As of 17 May, the CMA had written to more than 200 traders about this issue. In its communication, the CMA asked for more information or expressed concern about what the CMA considered may be unjustifiable price increases.
The UK government has relaxed the application of UK competition law to certain types of agreements across sectors.
By John D. Colahan and Anuj Ghai
On 21 May 2020, the CMA published a register containing links to each public policy exclusion order and notified agreement related to COVID-19 in the UK. A public policy exclusion order is a legislative tool used by the Secretary of State for Business, Energy and Industrial Strategy to relax UK competition law for certain agreements that may normally be considered anti-competitive.
The Secretary of State has made several public policy exclusion orders to enable a coordinated response to the COVID-19 pandemic. In March, for example, the UK government considered it necessary to relax the application of UK competition law to certain types of agreements in the groceries sector, in order to ensure a smooth and efficient supply of food and essential grocery products to isolated and vulnerable consumers.