CMA chief executive Sarah Cardell unveils new strategies to promote industry collaboration in support of UK's net zero ambitions
The Competition and Markets Authority (CMA) has announced it is planning to relax some competition laws to ensure they do not act as an "unnecessary barrier" for companies looking to work together to accelerate progress towards a net zero economy.
Speaking at the Scottish Competition Forum in Edinburgh last night, the CMA's chief executive Sarah Cardell said that the agency had increasingly heard from businesses that they are worried that competition laws may prevent them from working together to deliver environmental initiatives.
"Given the scale of the challenge to address environmental sustainability and particularly climate change concerns, and the degree of public concern about it, we think it is important that firms are not unnecessarily or erroneously put off collaborating in this space by fears about competition law compliance," she said, adding that industry collaboration is likely to play an "essential" part in delivering on the UK's net zero ambitions.
Last year the CMA published guidance for businesses on how competition and consumer laws could help the UK meet its environmental goals. And Cardell said that while the CMA can not yet share the full details of its new guidance, it intends to launch a consultation in "the coming weeks" on reforms that could make it easier for firms to co-operate on green initiatives.
The new rules will apply to section 9 of the Competition Act and are expected to include a specific approach for the application of the 'fair share' criterion for climate change agreements.
"Traditionally, the assessment of whether consumers receive a fair share of the benefits from the restrictive agreement has focused on the benefits flowing to consumers in the relevant product market - that is, to customers of the products or services covered by the agreement," Cardell explained, adding that the new approach would reflect the fact climate change "represents a special category of threat".
"This is why, in relation specifically to agreements that make a substantial and demonstrable contribution to tackling climate change, in line with well-established national or international goals, the CMA intends to depart from the more traditional approach to the 'fair share' assessment," she said.
As an example of how businesses could benefit from the proposed reforms, Cardell suggested the new rules would make it easier for competitors to organise a joint campaign to raise awareness of sustainability issues.
The changes could also give firms the confidence that although cross-industry environmental agreements could relate to the way that companies compete, and so in theory could breach competition law, in practice this would not infringe the law, Cardell said.
For example, codes of conduct promoting environmentally conscious practices, such as joint standards or certification labels covering the use of production methods, would not be at risk of inadvertently breaching competition rules. Such schemes could be exempt from competition law, Cardell explained, provided that the participation criteria were transparent and access to the scheme was granted on the basis of "reasonable and non-discriminatory criteria".
With the fight against climate change prompting the development of new markets, the CMA said it would also look to help ensure that these emerging markets for sustainable products and services develop in competitive ways.
Cardell cited the growing electric vehicle (EV) and charge point market as an example, stating that with a current total of around 25,000 EV charge points and a requirement for more than 10 times this amount by 2030, "strong competition and the right regulatory framework will be required".
The CMA said it will be putting a "priority focus" on these emerging markets and will offer the government support in the form of market studies and informal advice "to ensure that emerging markets foster competitive conditions that enable environmentally sustainable initiatives to thrive, delivering a real benefit to the competitiveness of the UK economy and UK society as a whole," Cardell added.
In addition, Cardell reiterated plans to crackdown on greenwashing and help ensure consumers can make more informed choices about the impact on the climate of the goods and services that they use.
The CMA highlighted that its 'Green Claims Code' already provides guidance on how to comply with consumer law when making environmental claims. While the CMA wanted businesses to celebrate their environmental success, it added that it would be taking action in instances where firms are making unfounded claims.
"Climate change is one of those real-world challenges in which competition and consumer authorities have an important role to play within our existing statutory duties," Cardell concluded.
"We want to promote an environment where people can be confident they are getting great choices and fair deals, competitive and fair-dealing businesses can innovate and thrive, and the whole UK economy can grow productively and sustainably."
