Earlier in the year, the Competition and Markets Authority (CMA) received its long-awaited new powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC) to directly enforce consumer protection laws. This includes the power to impose fines of up to 10% of group global turnover, without the need to go through the courts.
The CMA has been pushing for these powers for years. When the legislation was first announced, it was clear the initial intention was to make use of them quickly – particularly in relation to the new obligations relating to consumer reviews. A three-month grace period was given, to allow businesses to get their house in order.
Now that grace period is over – and despite government guidance tempering the CMA’s messaging – we are likely to see some enforcement.
Food scrutiny continues
The CMA has indicated it will focus its activities on the eight key sectors identified in the government’s industrial strategy, published in June, which sets out a 10-year plan to make the UK a better place to do business.
This development may offer the grocery sector some relief, as food and drink are not listed among the CMA’s priority sectors.
However, because food and drink is an area of essential consumer spend, combined concerns around high food inflation and the rising cost of living , the sector won’t escape scrutiny completely. Food security has been identified as an issue of national security and it remains high on the policy agenda.
Given the CMA’s vast experience in the sector and its ongoing focus on non-discretionary items like groceries, food and drink enforcement activity is expected to continue.
Pricing and protection
As the landscape of enforcement tools has evolved, we expect the CMA to prioritise its new consumer protection powers on areas such as displaying prices and price dripping, in addition to established concerns such as false advertising, fake reviews and marketing claims. We also expect to see significant activity around unwarranted health and green claims.
New, simplified guidance has been published in draft and is expected to be finalised in the autumn. Once this guidance is final, enforcement may follow, making it crucial for businesses to monitor new guidance throughout 2025 and 2026.
The CMA is also likely to focus on situations where consumers receive false information or where aggressive sales practices are used. This suggests that so-called ‘dark patterns’ remain on the agenda – but perhaps with an increased focus on the newly-updated definition of vulnerable consumers.
Questions also remain around whether loyalty schemes and price matching will become an area of concern. They could potentially be drawn into the CMA’s focus if they reduce price transparency or mislead consumers into thinking they’re receiving better deals than they actually are.
Competition law compliance in the labour market will also impact the grocery sector, as the CMA published guidance for employers on avoiding anti-competitive behaviour. It identified no-poaching and wage-fixing agreements between employers as the main area of concern, along with sharing commercially sensitive information.
Balancing enforcement with growth
The CMA is very much seeking to operate in line with the government’s growth agenda and ensure its enforcement activities don’t block economic growth. It has affirmed its commitment to the ‘4Ps’ – pace, predictability, proportionality and process – throughout its activities, so we expect it to be innovative in its approach to enforcement and to focus on areas where there is clear evidence of harm.
The authority may also explore ways to reach quicker conclusions, such as ending investigations more swiftly with early settlements,
Despite the CMA’s messaging, the regulatory picture is arguably becoming more complex for businesses in the grocery sector, as the number of potential compliance issues has grown significantly.
As the watchdog settles into its expanded enforcement role, food and grocery businesses should prepare for a more intense regulatory landscape. With clearer rules, stronger powers and continued a focus on grocery, the food sector should take the opportunity to lead on transparency, build consumer trust, and stay ahead of the curve.
Kate Newman, partner and head of competition at Mills & Reeve
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