Competition | UK Regulatory Outlook February 2025

What can business expect from the CMA? 

The government's line on growth, and its recent decision to replace chair of the CMA, Marcus Bokkerink, with former Amazon manager Doug Gurr, suggests that the CMA will be taking more a flexible, business-friendly approach to regulation in the coming months. The clear message for the CMA to adopt a more hands-off approach to investigations will be difficult to ignore, particularly after this unprecedented governmental intervention into the CMA's leadership. This approach is reiterated in the government's draft strategic steer to CMA. 

This focus is mirrored by the CMA's Draft Annual Plan for 2025-2026, which alongside reiterating a commitment to acting proportionately mentions growth over 100 times (for comparison, growth was only mentioned 11 times in the previous annual plan). However, in Mr Bokkerink's recent letter, after being ousted from the CMA, he stated that the government "has indicated it seeks a different approach to what is set out in that plan".  

Currently, the draft plan highlights the CMA's ambition to "foster growth", "protect consumers", and "allow fair-dealing companies to innovate and thrive". Intervention into areas where consumers spend the most money and time will be key. Specifically, the CMA intends to investigate drip and dynamic pricing, travel, housing and online entertainment. Public procurement is another target for investigation and the CMA proposes to use its data and AI capabilities to spot anomalies in bidding data to identify bid rigging. The CMA aims to publish its annual plan 25/26 in March 2025. 

The draft annual plan indicates some continuity in the CMA's investigative approach this year. The green energy transition remains significant and the CMA wants to encourage competitive agreements in the green technology space with the aid of its Green Agreements Guidance. It also aims to continue its investigations into cloud infrastructure services and online advertising.

Digital Markets, Competition and Consumers Act 

2025 saw the entry into force of the digital markets competition regime under the Digital Markets, Competition and Consumers Act (DMCCA). 

The CMA has now announced its first two strategic market status (SMS) investigations under this regime. As part of these investigations it will consider conduct requirements (CRs) that could be imposed on these firms. 

The CMA has set out a number of steps that will be taken while conducting these investigations, mirroring legislative requirements for extensive consultation with third parties and potential SMS firms before making any decision:  

• Stage 1 (January to March 2025): Initial evidence gathering and engagement with potential SMS firms and other stakeholders.
• Stage 2 (April to June 2025): Further evidence gathering and analysis, followed by a consultation on the proposed decision regarding SMS designation and any initial CRs.
• Stage 3 (July to September 2025): Analysis of consultation responses and further evidence gathering. 

The CMA final decision regarding SMS designations and CRs is subject to a statutory deadline in October. 

The CMA has stated an intention to launch a further investigation in June/July of this year. It is unlikely to launch an investigation earlier as this staggered approach has been adopted in consideration of the capacity of both the CMA and challenger firms. For further details on how the DMCCA may affect your business, please see our dedicated website. 

Procurement Act 

The Procurement Act will come into force on 24 February 2025, delayed by four months to allow for a rewrite of the National Procurement Policy Statement (NPPS). The government aims to enhance public procurement’s potential to deliver value for money, economic growth and social value. The Act also introduces significant changes to the interplay between competition law and public procurement. 

The Act expands mandatory and discretionary exclusion grounds for breaches of competition law. Bidders may be excluded from public contracts and placed on a publicly available debarment list if any exclusion ground exists. 

Contracting authorities must exclude bidders or "connected persons" (including subcontractors) found guilty of cartel behaviour (such as price fixing, bid rigging, or market sharing) unless granted full immunity under the CMA's leniency scheme.  

Authorities also have discretion to exclude bidders suspected of such offences or abuse of a dominant position. Bidders must disclose potential or suspected breaches of competition law, even if no infringement decision has been made or the investigation is ongoing. Discretionary exclusion grounds also apply to breaches under foreign jurisdictions. 

Potential bidders should review exclusion grounds and identify any applicable circumstances. They should consider "self-cleaning" measures, such as updating compliance training and policies, to demonstrate a positive compliance culture. Monitoring competitor infractions may also be beneficial for challenging future contract awards. Osborne Clarke has a dedicated webpage for advice on navigating the changes under the Procurement Act. 

Civil litigation 

At a directions hearing on 4 February 2025, Sir Julian Flaux and Lord Justice Green lifted a stay on five appeals from the Competition Appeal Tribunal (CAT). The outcome of these appeals is likely to have a significant impact on competition litigation claims in the future. These cases centre on whether the "multiple approach" – where funders receive payment based on a multiple of their investment rather than a percentage of damages – complies with English law following the Supreme Court’s landmark PACCAR decision. For an in-depth discussion of this decision please see our previous Insight. 

The PACCAR ruling disrupted litigation funding by determining that agreements entitling funders to a share of damages are damages-based agreements (DBAs) and unenforceable in opt-out CAT cases (most competition litigation cases are opt out). Funders then adopted the multiple approach, arguing it falls outside DBA scope. However, defendants in the stayed CAT cases argue that even with a multiplier, funders' returns are still linked to damages, classifying the arrangement as a DBA.  

These cases were stayed due to anticipated legislation to resolve PACCAR uncertainty. However, the government will not act until the Civil Justice Council review, expected in summer 2025, is complete. With no imminent legislative intervention, the Court of Appeal decided there is no reason to delay further. 

The Court of Appeal plans to list a hearing between late May and July 2025 to determine the multiple approach's validity. The ruling could significantly impact litigation funders, claimants and competition litigation. If the court sides with defendants, it will continue to restrict funding models in opt-out CAT proceedings, forcing funders to rethink strategies. Conversely, a decision favouring the multiple approach would provide clarity and a potential path forward post-PACCAR.