Competition | UK Regulatory Outlook March 2024

Long-term land interests and housebuilding

The Competition and Markets Authority (CMA), in its much-anticipated market study report into the housebuilding sector in Great Britain published at the end of last month, granted a momentary reprieve for the practice of so-called "land banking" while delivering a scathing assessment of the planning system. Alongside the conclusions to its study of the housebuilding market that it opened in February 2023, the CMA also announced the launch of a follow-up competition investigation into whether certain information sharing between housebuilders is anti-competitive.

The competition regulator views the increasing amount of land being tied up in options-to-purchase and promotion agreements – more than one million plots of land according to the study – as a symptom of wider problems in the market. These are primarily driven by the duration and uncertainty of the planning process. Crucially, the report says that "artificially reducing the levels of land banks" would likely have a negative effect on the amount of housing being built if the underlying drivers of the under-delivery of housing are not addressed. While identifying the planning system as a topic for legislative amendment, the CMA has proposed that the UK, Scottish and Welsh governments consider a range of changes to the planning system.

The CMA has indicated that its follow-up investigation into suspected anti-competitive information sharing, including information gathering, analysis and review of information gathered, will run until December this year. In the conduct of this investigation, the CMA will have broad information-gathering powers, extending to documents held on domestic premises. An unjustified refusal to comply with its  information requests can attract substantial fines and even criminal sanctions. The CMA has discretion to widen its investigation should further information come to light in the course of the investigation. In the past, this has included investigating additional companies as well as broadening the scope of the investigation to incorporate different conduct. (See our Insight.)

Digital Markets Act workshops

The European Commission is convening a number of all-day workshops for designated gatekeepers to showcase their compliance solutions for the most critical Digital Market Act (DMA) obligations and for third parties to ask questions and comments. At the time of writing only the Apple workshop had taken place, with the Commission subsequently confirming an official investigation into the company.

The DMA requires Apple to allow users to transact with iPhone apps via different payment processors or directly on their website, outside the iPhone ecosystem. It requires Apple to let users install apps on iPhone via alternative app stores or directly from developers websites. The DMA also requires Apple’s business terms for developers on the App Store to be fair, reasonable and non-discriminatory (FRAND). There was significant debate around how far Apple's compliance plan addresses these and other topics covered by the DMA.

The EU has not published a specific schedule beyond dates for hearings in March 2024 regarding each of the Big Tech firms covered by the DMA. Regardless of whether these hearings lead to specific action, the EU will continually monitor Apple and the designated gatekeepers.

CMA annual plan

On 14 March the CMA published its Annual Plan 2024 to 2025. It outlines the CMA's strategic approach and priorities for the coming year. Businesses should be aware of the CMA's expanded powers and responsibilities, particularly in relation to the regulation of digital markets under the proposed Digital Markets, Competition and Consumer (DMCC) Bill. When enacted, this legislation will provide the CMA with new tools and powers to regulate digital markets. Businesses operating in digital markets should anticipate increased scrutiny and potential enforcement actions from the CMA.

The CMA's focus on promoting fair competition and protecting consumers extends beyond digital markets. Businesses should be aware of its priorities in areas of essential spending, such as travel, accommodation, and caring for oneself and others. The CMA aims to ensure that consumers have great choices and fair deals in these areas, which may involve investigations into anti-competitive behaviour or harmful practices.

Sustainability is another key area of focus for the CMA. Businesses involved in sustainable products and services should be mindful of the CMA's efforts to promote competitive markets for climate technology. Additionally all businesses need to be aware of the CMA's Green Agreements Guidance, which aims to provide guidance on agreements between competitors with environmental sustainability objectives. Please see our previous Insights for a discussion of the guidance and analysis of the first informal guidance publication for more details on this.

In its latest Annual Plan, the CMA has emphasised the importance of fair and competitive labour markets. It plans to tackle potential competition issues in UK labour markets (such as non-poach and non-solicit arrangements), ensuring that workers are not disadvantaged by anti-competitive practices. Competition in labour markets is a focus of several competition authorities around the globe, including the European Commission, the US FTC and DOJ and the Canadian Competition Bureau.

Overall, businesses should closely monitor developments related to the DMCC Bill and the CMA's activities in digital markets. They should also stay informed about the CMA's priorities in areas such as essential spending, sustainability and anti-competitive behaviour. By proactively ensuring compliance and promoting fair competition, businesses can navigate the evolving regulatory landscape and mitigate potential risks.

Consultation on competition and consumer protection-related information sharing

Please see regulated procurement.