20 Mar 2024

CMA Annual Plan 2024/25

On Thursday 14 March, the Competition and Markets Authority published their Annual Plan for the 2024/25 year.

techUK welcomes the transparency that comes with the CMA Annual Plan, which outlines the areas the CMA will focus on in the next year, the medium-term priorities of the organisation and its longer-term priorities. We also welcome the CMA’s commitment to looking several years ahead in each annual plan, as this helps to provide some stability to business and increases confidence in the CMA’s long-term direction.

CMA Annual Plan 2024/25

The CMA has outlined limited changes to its framework, maintaining the same overriding ‘purpose’ and ‘ambitions’ for the longer term.

The medium-term priorities, set for a three-year period, are being slightly updated. Specifically, there will be a merging of the priorities on resilience through competition and promoting sectors that will have the biggest impact on innovation and productivity. The medium-term priorities are now as follows:

1. People can be confident they are getting great choices and fair deals

Consistently focus action on the areas where consumers spend the most money and time, particularly for people who need help the most
Protect people from harmful practices
Resolutely deter anti-competitive behaviour

2. Competitive, fair dealing businesses can innovate and thrive

Enable open access to markets for innovating businesses
Help emergent sectors to develop into high growth, innovative and competitive markets
Resolutely deter anti-competitive behaviour

3. The whole UK economy can grow productively and sustainably (includes changed priority below)

Help accelerate the UK’s transition to a net zero economy
Prioritise sectors that offer the biggest potential for impact on innovation, productivity and promoting resilience through competition. When considering what more we can do to support the growth of the UK economy, the CMA will prioritise action in sectors which may have a particularly positive impact on innovation, productivity and promoting resilience through competition – for example:

markets at an early stage of development but with the potential for significant growth;

markets that appear to have significant productivity gaps and where competition appears muted
markets that display an over-reliance on a limited number of suppliers, and where a lack of effective competition, particularly in strategic markets, may put the supply of essential goods and services at risk of disruption

Prioritisation Principles

The CMA has referenced the recently redrafted Prioritisation Principles in their Annual Plan, with the principles both being informed by the plan and used to inform work going forward. These include:

Strategic significance: does CMA action in this area fit with the CMA’s objectives and strategy?
Impact: how substantial is the likely positive impact of CMA action?
Is the CMA best placed to act: is there an appropriate alternative to CMA action?
Resources: does the CMA have the right capacity in place to act effectively?
Risk: what types of risks are associated with CMA action, and how significant are they?

The principles will be used by the CMA when deciding new projects and programmes of work to take forward. Strategic significance and impact will generally be prioritised, and balanced against whether the CMA is best placed to act and the resources required. The CMA stress that these principles will not be applied mechanically, but each judgement will be taken on a case-by-case basis and will be a relative question.

These principles are also part of an explicit recognition by the CMA in their plan that they will work collaboratively with other regulators through forums such as the UK Competition Network and the Digital Regulation Cooperation Forum. The CMA also outlined individual examples of collaboration, such as a recent memorandum of understanding with the Bank of England.

Areas of Focus in 2024/25

In the upcoming year, the CMA has committed to their Public Cloud Infrastructure Services investigation and their investigation into web browsers on mobile devices.

The CMA is also gearing up for its new responsibilities and duties that will come from the Digital Markets, Competition and Consumers Bill and the AI White Paper. The CMA has committed to improving their use of technology, including data and artificial intelligence, to augment the increase in staff and resources necessary for these regulatory challenges.

The CMA has already published their provisional approach to implementing the regime in the DMCC Bill, including the use of ex ante tools to identify and address issues in digital markets. The Annual Plan outlines the DMU’s ongoing work to release draft guidance that will be consulted on before the regime begins and to continue to build relationships with stakeholders.

On AI, the Annual Plan meanwhile commits the CMA to publishing an update on their thinking regarding AI Foundation Models, following their September 2023 principles, which will include the results of their consultation. The CMA have also expanded their area of focus on encouraging competition in emergent markets to encompass consumer protection and have made specific reference to the development and deployment of AI foundation models.

Analysis

techUK submitted our input to the CMA when they consulted on the 2024/5 workplan.

We welcome the CMA continuing to publish its long-term and medium-term outlooks, which techUK sees as important to providing stakeholders with a good understanding of the framework driving the CMA’s work.

techUK are also glad to see a restated commitment from the CMA to work internationally and nationally with partners and to expand horizon-scanning capabilities. techUK is pleased to see several stated examples of current and future work in this field, such as the Memorandum of Understanding with the Bank of England and the continued engagement of the CMA with the Digital Regulation Cooperation Forum.

However, a number of techUK’s concerns have gone unaddressed:

There is currently a wide range of firms who have raised concerns that the CMA’s actions are sending a signal to the market that the UK has a more hostile environment for mergers and acquisitions than many of our competitors. This is a significant concern, given that mergers and acquisitions are a crucial and legitimate part of many business models, from SMEs to global companies. The CMA’s Annual Plan does not address this assessment that exists in large parts of the market.

Furthermore, the CMA’s Annual Plan suggests a drive to regulate emerging tech markets such as foundation models. While we welcome regulators taking an exploratory and horizon scanning approach to markets, including the well-researched and thoughtful AI Foundation Models: Initial Report published by the CMA in September 2023, regulators must be cautious not intervene too early when it comes to emerging technologies, especially in nascent markets.

Regarding how the DMU will deploy its new powers and responsibilities, techUK welcomes the CMA outlining plans to release draft guidance and to ready itself to use its plans from commencement. The provisional approach addresses a number of concerns raised by the sector, for example proposing to expand avenues for engagement through the two new advisory committees, a commitment to report on the DMU’s activities as part of the CMA’s annual report and workplan, as well as a commitment to further co-operation with other regulators.

This workplan comes at the start of a busy year for the CMA. The CMA’s Digital Markets Unit will likely also be receiving new powers and duties under the Digital Markets, Competition and Consumers Bill while the CMA itself will be charged with implementing the Government’s plan for regulating AI in the AI White Paper response.

techUK devoted one of our recent Seven Tech Priorities to the recommending how the UK can reform its regulators to better recognise their strategic economic importance. This comes off the back of techUK’s recent polling with Public First, in which tech leaders cited concerns with regulation as the third greatest obstacle to doing business in the UK. Read more about this on the Seven Tech Priorities page.

Neil Ross

Associate Director, Policy, techUK

Archie Breare

Public Affairs Manager, techUK

CMA Annual Plan 2024/25