Welcome to this final panel of today’s inquiry of the Business and Trade Committee into prices for consumers in the UK. We have the Competition and Markets Authority. Emma and Hayley, thank you so much for joining us. Emma, perhaps I could start with you. We have just heard some of the least plausible evidence that the Committee has ever heard about the competitive dynamics of the ticketing market. We have seen real evidence today of price gouging by supermarkets in poor communities. We have seen an extraordinary situation in the airline market where prices are surging to astronomical levels, fleecing fans who want to go to their favourite events. What on earth is the CMA doing to bring justice for consumers in this country?

First, thank you very much for having us here today. We really welcome the chance to account to Parliament for the work we do to protect your constituents. We have listened to those sessions with very great interest. Clear and competitive prices are absolutely vital to consumers, and they are very important to the CMA. Over the past couple of years, we have undertaken an extensive programme of work looking very specifically at prices and what we can do to protect consumers through our work in the grocery sector, on road fuel, on IVF or will writing. Our priorities for enforcement under the new DMCCA regime place protecting consumers squarely at its heart.

I appreciate that you have a tightly defined role in the law set out by this place, but can you tell us what on earth you felt listening to the evidence that we have heard this afternoon? Do you feel that consumers in this country are adequately protected today? I mean as a citizen, not as a regulator.

There is clearly work to do. We are absolutely committed to doing that work. With the new enforcement regime under DMCCA, we now have better tools to do that work than before. What I would say, though, is that the CMA has worked hard over the last few years. We have delivered £10 billion in benefits to the economy since the CMA was established. We have delivered £175 million of benefits directly from our consumer protection work. Across areas of essential spend, across the sectors that we have talked about today, such as groceries, airlines, hotels and car booking, the CMA has taken action over the last few years, including to protect consumers through the covid pandemic.

Are you asking us to believe that the enforcement regime we have in this country on prices is okay?

The new regime gives us the tools to take more direct and effective action than we have been able to take in the past. We are absolutely committed to doing that. Prices are absolutely key. We have specifically called out pricing in our approach document. We are looking squarely at drip pricing and misleading pricing practices. Those are among the most important priorities to the consumer protection team at the CMA.

Is it right that Tesco can charge my constituents, who can only get to one particular store, 10% more for a box of Weetabix than if they were lucky enough to be able to go to the superstore in Quinton? Is that right?

I will come in on that point, if I may.

Of course, yes. Any light you can shed would be welcome.

We absolutely get that concern. We all know the importance of grocery pricing to household spend. It has been a vital part of our work. We have been looking rigorously at the supermarkets, the way in which they price and the healthiness of competition. When there is effective competition, we know that bears down on prices. You are absolutely right that prices may be higher in certain parts of the country. That may be in a particular rural area; you also mentioned constituencies that may have a lower-income demographic; and a previous witness talked about inner cities. We looked at that, and that is what we found.

What did you find?

We found that convenience store prices were higher.

Today, is that legal?

We looked at the health of competition in that market and whether anything about competition was driving the inflation of food prices. We did not find that was the case. At the CMA, we hear the concerns, but we have limited levers to pull. We can look at competition. We can really bear down and make sure competition works effectively. Ms Cochrane and I enforce consumer protection law. We can make sure that consumers are treated fairly, but the CMA does not have the role in setting prices. That remains a commercial freedom for businesses. We absolutely get that this is a very cold comfort for a constituent who pays more, but if we do not find a competition problem or a problem with consumer protection law, we do not have the jurisdiction to intervene any further. Where we find those problems, we stretch every sinew of our powers to make sure we have a positive impact on consumers and prices in this country.

Just so we are totally clear, the law of the land today allows companies such as Tesco to charge poor people 10% more on their shopping basket than people in the middle-class area down the road?

It does. It does not allow them to trade anti-competitively or to exclude rivals that might want to come in and charge lower prices. It does not allow them to collude, mislead or be dishonest with their consumers. Where we find that kind of egregious conduct, we act.

As a Committee, we might conclude that there is a gap in the law.

Good afternoon. These questions are to whoever would most like to answer them. The Digital Markets, Competition and Consumers Act received Royal Assent on 24 May 2024 and came into force on 6 April this year. Until today—I am aware of the Google announcement—there have not been any actions taken under the DMCC Act. I find that a bit odd. You have had a year. You knew this law was coming in. There is lots and lots of unfairness going on. Everybody was like, “If only we had these new powers, we would get right to it,” but nothing has happened. It does not sit well.

I appreciate that nothing has happened publicly. I can assure this Committee that it is not the case behind the scenes. When you talk about the law coming into force in January, the consumer elements of that law came into force in April. Our enforcement powers relate to conduct that has occurred since 6 April. You are right. We were preparing for this. We prepared for this for a long time. As the law came into force, we were monitoring the conduct of quite a large number of businesses across different sectors and different behaviours. One of the things we saw overnight on 6 April was that a number of businesses changed those practices. That tells us how important this new law is. The simple fact that it came into force caused businesses to change their commercial practices to bring themselves into compliance. Not all businesses have changed their conduct, of course. Of those that did, a number will not have gone far enough. We have been gathering evidence at scale and monitoring. We have been sending information notices. We have been taking the preparatory steps that we need to take to identify conduct that we can enforce against, which is only conduct since 6 April. You can expect to see announcements of the cases that we will be pursuing in the autumn.

I have two more questions. First, back at the beginning of the year we had a conversation with your colleagues about subscription-specific rules. We had a discussion about the meaning of “spring 2026” and whether “spring” meant April or October. I would love some confirmation today of whether “spring” does indeed mean April and that these subscription rules, which apply to everyone who is being ripped off by subscriptions that they cannot get out of, are going to be put into force and we are not going to go easy on a bunch of corporates ripping off consumers by dragging “spring” out to October.

We agree. We want to see those rules come into force. That is a matter for DBT at the moment. It has consulted on the secondary legislation that will be required under the DMCCA, and it is thinking about the guidance that is also going to be required. Those provisions are not coming into force before the spring, but I do not have the information.

We should go to DBT on that?

Yes.

Okay, we will. Thirdly, I am impressed that you were listening to the previous sessions. Thank you for doing that. On Ticketmaster, what is going on feels completely egregious. The data seems to be very strong, although Phil and Andrew did a nice stonewalling job. What is it going to take for the CMA to get on to this? They are completely wrapped around the consumer, and the consumer is being completely knifed.

We hear from this Committee and the people we speak to that this is really important. People should be able to go and see their favourite bands or go to events, and they should not be ripped off. We have taken action here in the past. We have secured undertakings with StubHub and we have secured a court action for Viagogo. As you know, we are also taking action in relation to Ticketmaster’s selling of Oasis tickets. Essentially, there are three things that the CMA can do here. We can use our consumer powers, which is what we have been focusing on to date; we can use our Competition Act powers; or we can use our markets tools. In terms of our Competition Act powers, we have proactively called for evidence of collusion or abuse of a dominant position. At the moment, as of today, we do not have evidence that gets us over the threshold to open an investigation. If there is further evidence, we would look at it with interest and would consider whether the evidential threshold is reached. In terms of our markets work, that is something we are considering at the minute. We could choose to open a market study, which gives us a period of 12 months to look at the market, at the end of which we would be able to make recommendations to Government, or we could choose to open a market investigation, which would be on a timeframe of 18 to 24 months. That would open up the possibility of making orders, including breaking up a business, for example.

Just in terms of that market study, the stats are in the public domain. This is nothing that is not out there already. What is the consideration for not kicking off a market study or market investigation, whichever has the most teeth, now?

We think about a number of things when we think about opening a market study. First of all, there is an opportunity cost to them. We can do a maximum of three or occasionally four market pieces of work a year. In the past, we have prioritised things, such as groceries, infant formula and road fuel, that directly impact consumers, as this does. In the strategic steer, we have also been told that we must consider what is happening in other jurisdictions. In particular, we are aware that there is ongoing litigation in the US, where Live Nation is headquartered, which may have the ultimate effect of breaking up those businesses. That is one of the things that the plaintiffs are asking for. We have been directly told by the Government in the strategic steer that we need to take heed of what is going on elsewhere and to avoid duplication wherever possible. That is one of the things. We are also taking into account, in this market, the fact that there is regulatory reform on the cards in relation to secondary ticketing. The Government have issued a call for evidence on live events, which means this is a moving area. We take all of that into account. To be clear, our minds are very much open to the possibility that we could take this on, but we need to balance that against other things that may also be of real import to consumers and constituents throughout the country.

I have one final question. You employ more than 1,000 people in the CMA. We have covered three or four areas today that are very problematic. We are only chewing through three to four a year. If I was a corporate up to tricks, I would be pretty happy about that. Is the CMA applying itself to working out how we could do 20 rather than three or four a year and gradating them? You do not have to go in all the way. Frankly, just by showing up and doing it, you are going to start changing behaviour. Three or four a year does not seem satisfactory, given that we have a big economy and there is a lot going on in it that is not great.

In terms of the work that the CMA does, our mergers work is non-discretionary. We have to review the deals that come in. There is the work that we do on the Office for the Internal Market and the subsidy advice unit. In our consumer protection work, our markets work and our competition enforcement work, we have a significant amount of discretion about the work we take on. We think about those in the round. When I say three or four pieces of markets work, that is literally the work done using the market study and the market investigation tool. It does not cover our consumer protection portfolio; it does not cover Competition Act enforcement in relation to collusion or abuse of dominance. Those are different. We think about them across the piece. We think about ensuring that we have coverage of markets that directly impact consumers. That has been a big focus over the last few years, particularly in relation to protections arising out of the pandemic and in relation to cost of living pressures. That is our work on road fuels, infant formula, groceries and so on. We also need to think about non-consumer facing markets. In the last week, we have opened a market study on civil engineering, which is very important in terms of the growth agenda. We have to consider, again, the Government’s strategic steer, which tells us to focus on the eight industrial sector strategies. Q207       Dr Huq: Going back to the Oasis incident, your investigation found a litany of failures. They mis-sold tickets as platinum when they were no different from the standard ones, and they hiked up the prices. Would you say that Ticketmaster, thinking about what you heard of its evidence just now, misled customers by using the fear of dynamic pricing to put pressure on people, even if it did not technically dynamically price on this occasion?

Going back to that investigation in particular, you are absolutely right that we have concerns about the conduct of Ticketmaster during that particular sale. That included clarity around the prices and the tickets. We have an ongoing investigation into that, so I am limited in what I can say. I cannot comment right now on whether or not Ticketmaster misled with the particular statement that you called out. We have also undertaken extensive work looking at dynamic pricing. Whether you call it dynamic pricing, fixed-tier pricing or capped pricing, consumers want to know what they are going to get, and they want to be able to appraise whether that is something they can afford or is a good deal for them. Regardless of whether they had a certain number of cheaper tickets and they sold out or whether their prices are varying more in real time, we have called on those traders to make it much clearer to consumers what is going to happen so they know exactly what they are going to get. In the Ticketmaster investigation that you mentioned, we had concerns that people were in the queue and they thought that perhaps prices were changing in real time because of their behaviour, but, as the last witnesses said, those prices were pre-set in advance. We were concerned that this was not clear. That is one of the key bases for our investigation. Q208       Dr Huq: At the end of the day, does it not erode trust? I had a private Member’s Bill on this. It was difficult to get Conservatives to sign up, to get the 14 names or whatever, because they said there was too much market interference in life. As you said, it is a consumer protection measure for our constituents. They need transparency.

We absolutely agree with you. Trust and confidence are the foundations. You do not have to have either strong consumer protection or competition. You need both to be working. If you want an economy to grow and thrive, you need to have active consumers who can be confident in where they spend their money and know they are getting good deals. That is why, as Ms Cochrane set out, the core of our mission in the consumer protection team is to make sure that we do two things. On the one hand, we help businesses to get it right first time so consumers are not harmed in the first place. Once harm has occurred, you have eroded consumer trust. Let us stop it happening in the first place, and then we will bear down where we see egregious conduct. That is exactly our approach and our mission under the new regime. Q209       Dr Huq: Are they emboldened because they have this monopolistic position? They are so big. They handled 900,000 ticket sales in the Oasis incident alone.

In relation to that investigation under consumer protection law, whether or not there is market power and the volume of seats is put to one side. Our focus is on whether those customers, on that day, in that queue, were misled or whether they were given the right information about tickets. As I said, we have concerns about that. Consumer law applies whether you are a small firm or some of the world’s largest. It is blind to the size of the firm. Q210       Dr Huq: They are gigantic in size. Does that help them be even more arrogant than they should be?

In that investigation, it meant that a large number of consumers were affected, yes. Q211       Dr Huq: Lastly, what are the lessons learned? What will improve for our constituents? The thing I was trying to angle at before is that people buy their accommodation in advance, and then it gets cancelled. It happened at the Labour party conference as well. You buy it well in advance, and then they cancel it. It is Booking.com and companies like that. Do you have any power to do anything to rein in those people? They hike it way up.

We have heard those stories. It is immensely frustrating, particularly when you have booked in advance and then something is suddenly cancelled. In those circumstances, if a trader has cancelled your booking simply because they are going to resell it at a higher price, they are at risk of a breach of contract. If there are terms in the contract that put all the power with them rather than the consumer, that could also be a consumer law concern. In those situations, my advice to consumers is to talk to their local trading standards department or Citizens Advice because those traders are at risk of breaching consumer law. As Ms Cochrane said, the consequences now for breaching consumer law are so much greater than they were before because of the new powers under the DMCC. For the first time there is parity between the requirements of competition law and consumer law. We have seen this already, but we continue to hope that every boardroom and every business in this country takes account of the fact that they are now at risk of enforcement from the CMA and the imposition of fines of up to 10% of worldwide turnover. In our experience and discussions, that somewhat focuses the mind.

That was not at the core of our investigation. We were primarily looking at the rise of loyalty pricing, which is now common in our daily shop but at the time was relatively new, and whether those discounts were genuine and fair. We looked quite forensically at those prices and some of the differences between brand and non-brand products. No, we did not look at that precise question.

We have been very clear with the supermarkets about the information they should provide to consumers about pricing, whether that be the detail on the edge of the shelf or the discount. Was the previous price and the current price they are seeing absolutely genuine? Consumers need to have trust and confidence in the prices that they see. That was the focus of our investigation.

Generally speaking, we want thriving competition, particularly in this sector, which really matters to people. There are limited levers that we can pull to prevent the organic increase of market power. If they are increasing their market share because that is where people are shopping, it is quite difficult for us to do something about that. If they are in a position of dominance already, they are not able to abuse that dominant position. That abuse could, for example, be through charging excessive prices or price discrimination. If we were concerned that the way they were growing market share was a function of something going wrong in the competitive process, we could then look at using the markets tools I spoke about earlier. There are different things that we could do, but it really depends on what is going on. As I say, we are actively considering whether we should be looking at this market sector.

As a whole, the CMA employs around 1,000. In the consumer protection and markets division, we have in the region of 110 at the moment.

It is mergers, competition enforcement and our data unit, which is looking at ensuring that we are using new technologies, including AI, as effectively as we can both in how we work and in how we do enforcement and detection. We are doing some really interesting work to detect more consumer infringements with that team at the moment. It is also corporate services, as you would expect.

It depends on which tool we are using. In competition, generally speaking, we prioritise based on the impact that we can have, whether we can be effective and whether we can generate change in the market, if we see a problem. We look at how important it is to consumers. We look at the Government’s strategic steer, including the fact that the Government have asked us to focus on those eight industrial sectors. We look at whether it is an intervention that is pro-growth and pro-investment.

I just wanted to pick up on some of what we have heard today, and particularly to follow-up on the supermarket theme. We seem to be being told that Tesco and Tesco Express, or Sainsbury’s and Sainsbury’s Local, are somehow completely separate businesses that operate entirely exclusively, but they are not. They do not have a separate entity. These are just operating segments. They have nothing to do with a legal structure in that sense. These are just all operating costs for the business, but that is the excuse given for why there are price differentials at different stores. I wondered whether that is the type of thing you might look into: these reasons why they cannot possibly do it, and it is out of their control. In a former life, when I had to deal with employers, the same claim would be used. They would say, “There is a site and it makes no money. It makes no money at all.” One very famous crisp manufacturer once made this excuse. The entire site that made all the crisps did not make any money, so it could not possibly pay a pay rise. Again, it is the convenience of using these segments as an excuse for why they cannot take action. I just wondered whether you come across these types of arguments and what you think you might be able to do to challenge them.

Particularly with the supermarkets, we look at how competition is working overall. As I said earlier, we did not find that a lack of competition was causing those price rises, nor did we find that there were particularly higher exploitative margins at convenience stores. As you heard in the earlier session, there are different costs, but I completely understand the point that, if you are paying more at a convenience store operated by a large firm, that feels incredibly frustrating and unfair. We have intervened where we found that the cause of any of those kinds of problems is within our sphere, so where it is a competition problem or a consumer problem. In terms of how the supermarkets behave, they are ultimately accountable to their customers and to Committees such as this one. The Competition and Markets Authority does not have the ability to say to Tesco or Sainsbury’s that they should open a store in a particular area or lower their prices to match their larger retail stores. Those are not powers that we have on the books to use. That is the honest answer, but I realise it is not one that a constituent wants to hear when they are paying 10% more at their convenience store.

Can I put it to you that the CMA is a bit of a paper tiger? You talk about the powers that you have in theory and that these companies are at risk. How much risk are they at? Are you not swamped by all this?

As with all public authorities, we have to prioritise the cases that we take. With the DMCCA coming into force and those higher sanctions, that creates credible deterrence where there has not been any until now on the consumer side because we have not had those powers to impose fines, to order companies to pay redress or to compensate consumers they have harmed. That makes a real impact. When we have been out talking to businesses, there are real meaningful shifts in the way that these businesses are now thinking about consumer compliance, which were not there last year because the risk profile was simply not the same. We are not a paper tiger. We have active lines of inquiry. We will be bringing those into live investigations at the right time. I appreciate that right now you are not seeing progress, but we would be delighted to come back and talk to you next year about the cases that will be open at that point.

Jam tomorrow, but no jam today.

We are picking the fruit.

Hayley, is there a structural problem with the CMA? Is that the difficulty? You are geared up to do a great investigation into whether petrol prices across the country are being fiddled, for want of a better word, but when it comes to the internet, buying tickets or things like that, you are just not at the races.

I would reject that quite strongly. I would look at our record, particularly how tough we have been as an authority. We have taken consumer protection law investigations against some of the world’s largest firms. We were there for consumers during covid. We got hundreds of millions of pounds back for them. Just last year, we got £4 million back from Wowcher to consumers because we thought they were treated unfairly, having been opted in via a pre-ticked box to a service that they did not always want. We have a very strong record. That record will continue to be strong, and our impact will be much greater than it ever has been because we have these new fining powers under the DMCC. The CMA is very well set up to tackle those challenges. If you particularly look at how we have been thinking about AI in recent years, we were one of the first authorities in the world to think about the impact of AI on competition and consumer protection and to get ahead of the curve and think about what conditions need to be in place for markets to work well. We have a world-leading data unit that has data engineers and scientists. As Ms Cochrane explained, we are deploying some of the latest technology to detect possible consumer law infringement at scale across the economy. That is advanced for other consumer protection authorities around the world. That is exactly where the CMA is. We have everything that we need to do the right thing for consumers.

If I could just add to that, even with the previous powers, this year alone we have secured undertakings from Google and Amazon in relation to their processes to detect fake reviews, as reviews are relied on by nine out of 10 consumers when they are shopping online. The changes we have secured through those undertakings will make a meaningful difference to consumers, who will be able to trust and rely on the reviews that they see. That will help them to make better decisions when they are buying.

I am conscious of time, but, very quickly, one of the things about dynamic pricing is that we seem to lack even a definition of what dynamic pricing is. Even today, we have heard lots of ideas about what dynamic pricing might or might not be. Is that something you would ask of Parliament? Would it be helpful if we were to lay down a definition in law? We are lawmakers rather than law takers. Would that help you in your fight against this sort of thing?

We have looked at dynamic pricing in quite a lot of detail. You are absolutely right. It is almost impossible to find an agreed definition, but we think about it from the consumer perspective. What do they see? What do they expect? How are prices changing in real time for them? We have applied consumer law. Now, consumer law is principles-based, so it is agnostic to the technology that is being used, the practice. Today, it is dynamic pricing; tomorrow, it might be something else, but the underpinning principles that we have to deploy are exactly the same. It is about not misleading consumers, treating them fairly and making sure they have the right information at the right time. We want people to be able to benefit from new pricing practices and new products and services. We put out some advice on Friday that made it clear to businesses that they need to take people along that journey with them. If they are trying something new, they need to tell people so they know what to expect. They need to be up front and honest with people about the pricing practices that are being operated. As I say, with our new powers, we think we have the tools to tackle what we see in the economy today, but of course we stand ready to assist this Committee or the Government more broadly, if they want to introduce new requirements or think about new legislation in the future. I do not want any business to be under the misapprehension that, if there is something new, the CMA will not be there standing for consumers. We will be. We do that in two ways, as I said earlier. We tell consumers and businesses what we expect of them, and then we stand up for consumers. That is our approach.

If I could paraphrase that, you are talking a lot about deterrence and detection. You are able to deter, you hope, with your new powers. You are hoping that you can pick up on the issues. The one that is missing is enforcement. You talk about how in a year’s time things are going to be great, but there are difficulties right now. People are buying these items in shops. People are going online and buying things. Again, to Dr Huq’s point, I am a great believer in the free market. If you want to pay £300 or £3,000 for an Oasis ticket, that would not be my choice, but it might be your choice. However, if you go online, click £300 and then find out it will cost £3,000, that is a different issue altogether, is it not? That enforcement bit seems to be missing. Why is that?

We are taking active enforcement proceedings at the minute. We are litigating against Emma, the mattress company. We are enforcing against Oasis. We have recently closed our investigations into Google and Amazon. We secured undertakings against Simba Sleep last year. We are also active in our markets space looking at those consumer-facing markets that really matter to everybody. There is a lot going on. We are also building that pipeline of new cases under DMCCA. We have had those powers for three months. We have to observe breaches in conduct and gather that evidence to the standard that we need to be able to take decisions, which will be challenged by businesses. They need to be robust, and they need to stand up. It is in everybody’s interest that we do that properly, thoughtfully and carefully.

The clock is slightly against us. Thank you very much indeed for that. I have one final question that Antonia Bance wanted to put. On the infant formula market, can you just tell us very quickly where you are now in implementing the recommendations? Are costs coming down for new parents? What has happened to the pilots that were promised for the retailers?

We have made those recommendations. I believe we are waiting for a response from Government. We stand ready in any way that we can to support those recommendations, which we think are vital for making sure that it is an effective market, as was said in the earlier session, at a very difficult time for some people. I was pleased to hear in that session that some businesses are already adopting those processes voluntarily. Yes, we stand ready to help implement those recommendations following on from our market study.

You are waiting for Ministers to respond first?

Yes. We stand ready to assist in any way we can.

Thank you very much indeed for spending the afternoon with us. That has been much appreciated. Thank you for your evidence today.