Overview
2023 has been another eventful year for competition and consumer protection at both EU and UK levels. Below we set out three areas with notable developments, that are expected to impact antitrust enforcement and disputes this year.
Enforcement
As we predicted back in January 2023, the last year saw robust enforcement action by the UK's Competition and Markets Authority (CMA), with a total of 13 investigations launched in a range of sectors, and the pace is expected to continue into 2024.
2024 is also set to see important changes to the UK's consumer protection regime with the Digital Markets, Competition and Consumer Bill (DMCC) expected to receive Royal Assent in Spring 2024. The DMCC will introduce a new targeted approach to addressing concerns regarding competition in the digital industry. Under the new regime, we expect to see the CMA's engagement with the most powerful firms in digital markets to ensure competition is maintained to protect and support consumers.
At the EU level, in September 2023, under the Digital Markets Act (DMA), the European Commission designated six gatekeepers (Alphabet, Amazon, Apple, ByteDance, Meta, and Microsoft) and 22 "core platform services" which they provide. The obligations on gatekeepers under the DMA will become enforceable in March 2024 (see our blog post on the gatekeepers under the DMA here). We expect DMA enforcement will be one of the top priorities for the European Commission in the coming year. The Commission is very keen to hear from business users of platforms about their experiences, their concerns, and any challenges in dealing with gatekeepers, to monitor the effectiveness of compliance with the Act, and to gather evidence for possible challenges.
Private Damages Actions
In the competition litigation space in the UK, 2023 saw a surge in competition law class actions under the collective opt-out redress provisions introduced by the Consumer Rights Act 2015. There are now some 30 cases pending before the Competition Appeal Tribunal (CAT). 2023 also saw the first settlement between the Class Representative and a defendant in a class action relating to car delivery charges. In February 2024, the CAT will hear its very first trial in collective proceedings. We expect to continue witnessing major developments in developing class action litigation in the UK this coming year.
Across Europe we have been seeing a significant increase in class actions and across all professional and consumer sectors including product liability. This has been driven by the advent of the EU Representative Actions Directive 2023. The UK has a special class action regime established exclusively for follow-on damages competition cases and we are seeing a significant number of cases launched in the UK under this new regime before the specialist court, the Competition Appeal Tribunal. Such claims in the UK total Euro 120Bn. Other leading countries for class actions are the Netherlands, Germany and Portugal.
ESG and Sustainability
In October 2023, the CMA published the Green Agreements Guidance, setting out the key principles, along with practical examples, that businesses can use to inform and share their own decisions when working with other companies on environmental sustainability initiatives. It explains that the CMA does not expect to take enforcement action against agreements that are in line with the guidance.
The CMA is currently investigating a number of "greenwashing" cases, where there is concern that businesses are making inaccurate or false environmental claims. In the Annual Plan 20223/24 consultation document, the CMA highlighted that this will be an area of priority, stating that it will continue to take action to accelerate the transition to a net zero economy and promote environmental sustainability.
The European Commission will also continue its focus on facilitating the transition to Net Zero through supervision and enforcement. In March 2023 it published a proposal for a Directive (Green Claims Directive), which aims to prevent businesses making unclear or unsubstantiated environmental claims and using labels that are not credible. The directive, expected to be voted in during early 2024, and adapted by the Member States 24 months after is introducing fines of a minimum of 4% of the business's total annual turnover in the Member State or Member States relevant to cases of widespread infringements with an EU dimension.
For full details on ESG and Sustainability developments, read our note here.
