While trade negotiations between the EU and UK are now underway, the role of the Competition and Markets Authority (CMA) during the Transition Period has been outlined in the CMA's Guidance published in late January.
The Guidance explains how the UK's exit from the EU affects its powers and processes in competition law, merger control and consumer protection law enforcement during the Transition Period. This Period is currently set to expire at 11pm UK time on 31 December 2020. This article deals solely with the position as regards consumer protection law enforcement.
The CMA stresses that its existing guidance continues to operate, and that in the event of any conflict, the most recent guidance takes precedence (i.e this latest Guidance).
Under section 3 of the Withdrawal Act, directly effective EU legislation as well as EU-derived UK legislation which is in operation immediately before 31 January 2020 continues to apply and forms part of UK law after the UK's exit. This has been amended by the Withdrawal Agreement Act so that it applies to legislation which is operative immediately before the end of the Transition Period. As a result, on a practical level the same requirements for businesses and rights for consumers apply as they did pre-31 January. Similarly the CMA retains its consumer protection enforcement powers and responsibilities. Any new consumer protection requirements which come into effect before the end of the Transition Period will also apply (subject to the outcome of any concluded trade agreement). Businesses will still need to comply with EU requirements in cross-border consumer transactions after the Transition Period, just as EU businesses trading with UK consumer will need to comply with UK consumer laws.
In cross-border enforcement cases, the CMA and other regulators are responsible under Part 8 of the Enterprise Act 2002 for civil enforcement of consumer protection law. This enables both EU enforcers to bring proceedings against UK businesses in the UK courts and the CMA and other UK enforcers to bring proceedings in the UK against EU businesses that are in breach of UK consumer law. Actions can also be brought in the consumer's member state where the UK business is directing its activities. This position will remain unchanged during the Transition Period. Where a case is commenced during the Transition Period, the same rules on jurisdiction and applicable law will continue to apply to it until it's conclusion. Any references to the CJEU for a preliminary ruling on EU consumer law interpretation which have been commenced before the end of the Transition Period will continue to enable the CJEU to provide its preliminary ruling.
The EU cross-border enforcement cooperation and assistance regime was established by the 2006 Consumer Protection Cooperation (CPC) Regulation, replaced on 17 January 2020 by the 2017 CPC Regulation. This prescribes reciprocal powers and duties for Member States’ competent authorities to request and provide assistance. The CPC system enables competent authorities to request a cross-border authority for information on a business based in their jurisdiction and can require it to take enforcement action against that business to stop it committing infringements which are harming consumers in the other member state. The 2017 Regulation strengthens the cooperation mechanisms and provides for a wider range of investigation and enforcement powers for national authorities to assist in meeting the challenges of the digital environment.
Throughout the Transition Period, the legal rights and obligations created under the CPC system, which apply to UK competent authorities, and the CMA’s role as the Single Liaison Office, will remain. The CMA will remain responsible for co-ordinating requests to and from the UK, and for referring incoming requests on to the appropriate UK authority, for example, National Trading Standards. It will also remain involved in common consumer protection law enforcement activities where infringements occur in multiple member states.
There are currently no provisions on how ongoing cases or requests for assistance to or from the UK will be dealt with after the end of the Transition Period. The CMA has only said that referrals for enforcement action made to the UK will be determined in accordance with its published prioritisation principles It has also stated that it will continue working with all its international counterparts on co-ordinated enforcement projects, including for example the International Consumer Protection and Enforcement Network (ICPEN), with which it worked on the issue of product endorsements and fake reviews. It therefore remains to be seen how the CPC system will work post the end of the Transition Period.