Covid-19 profiteers may face tougher UK CMA crackdown via emergency legislation

24 April 2020 00:00

Retailers exploiting the coronavirus outbreak by hiking up prices could soon see tougher enforcement from the UK’s competition regulator.

The Competition and Markets Authority has told the UK government that it would be able to crack down on such profiteering better if emergency legislation was brought in to give it extra powers for a limited time.

A CMA spokesperson said: "The CMA is using its existing powers to the maximum possible extent through its Covid-19 taskforce. But competition and consumer protection law were not designed for emergencies or for tackling price gouging.

“That’s why we have advised the government that emergency time-limited legislation gives a better prospect of dealing with this type of problem.”

Emergency price-control laws exist in the US, where 36 states have such powers. France has also recently introduced similar legislation.

MLex understands the CMA has advised the government privately on the form that legislation could take, but it is up to the government to decide whether to introduce it.

The authority has been in line for increased consumer-law powers that would allow it to tackle abuses without resorting to court action. At the moment, the CMA can require companies found to have breached consumer law to sign undertakings, but it can only enforce them by chasing the abusers through the courts. The regulator also doesn't have the power to issue fines.

Today's news comes after the CMA gave an update on the progress of its Covid-19 taskforce since it was set up last month. Its mission is to identify harmful sales and pricing practices, and to advise the government on policy and legislative measures.

The CMA said it had written to 187 companies accounting for more than 2,500 complaints about "large price rises" for personal-hygiene products, such as hand sanitizer, and for food products.

Overall, it said it had received about 21,000 complaints related to Covid-19 as of April 19. It also said it has received information on business practices from sector regulators and consumer bodies.

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