Better together?

Photo by Mohammad Sanaei on Unsplash

Better together? Not if you’re Asda and Sainsbury’s supermarket chains.

As of today (25 April 2019), the statutory regulator, the UK Competition and Markets Authority (CMA) has decided that the proposed merger between the two businesses should not take place.

As the above scenario demonstrates, the CMA has been given the power by the UK Parliament to make legally binding decisions of this nature. Theoretically, statutory regulators exist (in the main) to ensure that large business organisations do not acquire an overwhelmingly, dominant market position where they can ‘kill off’ competitors and substantially reduce consumer choice.

Stuart McIntosh, chair of the CMA inquiry group, said:

It is our responsibility to protect the millions of people who shop at Sainsbury’s and Asda every week. Following our in-depth investigation, we have found that this deal would lead to increased prices, reduced quality and choice of products, or a poorer shopping experience for all of their UK shoppers. We have concluded that there is no effective way of addressing our concerns, other than to block the merger.”

The CMA press release can be read using the link below:


https://www.gov.uk/government/news/cma-blocks-merger-between-sainsburys-and-asda

Sainsbury’s-Asda merger ‘would have harmed competition’.

A link to how the story was reported by Sky News can be found below:

Sainsbury’s/Asda mega merger is formally blocked by CMA
http://news.sky.com/story/sainsburysasda-mega-merger-is-formally-blocked-by-cma-11702941

Copyright Seán J Crossan, 25 April 2019

Stuck at red …

Photo by Erwan Hesry on Unsplash

Two interesting stories appeared in the UK media today which highlight the important role of regulatory bodies in the field of consumer protection. This is a topic which has already been considered in a number of recent posts (Watchdogs and No more heartbreak hotel?) both published on 14 March 2019.

The first story involves the Competition and Markets Authority (CMA) which has effectively shown the red light to the proposed merger between the two supermarket chains, ASDA and Sainsbury’s. Any newly merged company would have tremendous economic power and such a development could adversely affect the interests of UK consumers e.g. by restricting consumer choice. In response to this setback, both retailers have offered to sell off approximately 150 supermarkets and some petrol stations in the hope that the CMA may eventually be persuaded to allow the merger to go ahead.

The second story involves the Advertising Standards Agency (ASA) which has banned the use of adverts by 150 autism therapists who claim that a controversial practice, involving high doses of vitamin C and zinc, known as CEASE (Complete Elimination of Autistic Spectrum Expression) can ‘cure’ the condition. The ASA has issued these therapists with an enforcement notice telling them to stop making and advertising such claims that CEASE is an effective treatment for autism. According to the ASA, these assertions are being made without “proper scientific foundation” and “could seriously harm children”.

Links to the two stories can be found below:

Ad watchdog orders 150 ‘autism cure’ therapists to stop
http://news.sky.com/story/ad-watchdog-orders-150-autism-cure-therapists-to-stop-11672357

Sainsbury’s and Asda offer to sell supermarkets to merge

The chains tell the UK competition watchdog they would sell up to 150 supermarkets to be able to merge.

Copyright Seán J Crossan, 22 March 2019

No more heartbreak hotel?

Photo by KEEM IBARRA on Unsplash

In Chapter 1 of Introductory Scots Law, I discussed alternative methods of resolving issues or disputes which may have legal consequences.

In particular, I focused on the role of regulatory bodies which can assist members of the public e.g. consumers to lodge complaints and have these disputes resolved relatively inexpensively.

One of these regulatory bodies with an important role to play in consumer law is the Competition and Markets Authority (CMA) . This organisation aims to ensure that there is a level playing field for consumers and that businesses do not exploit an often dominant position in the market place.

A recent story which threw some light on the work of the CMA concerned misleading pricing and marketing policies which were being used by some hotel booking websites. In particular, the CMA found that some booking companies were using high pressure tactics to get consumers to finalise a booking. A favourite tactic being used by the booking sites was to give consumers the impression that demand for rooms at certain hotels was far greater than was actually the case.

Consumers do have recourse to the law – the Consumer Protection from Unfair Trading Practices Regulations 2008 is one such example (see Chapter 4 of Introductory Scots Law). That said, taking individual legal action can be fraught with risk for consumers. It is often better if a regulator, such as the CMA, is willing to go to the barricades on behalf of consumers generally in an attempt to get businesses to play fair – either by means of (gentle) persuasion or by threats of legal action.

As a result of the intervention by the CMA, hotel booking sites will now have to behave more transparently in their interactions with actual and potential customers.

A link to a CMA press release concerning hotel booking websites can be found below:

https://www.gov.uk/government/news/hotel-booking-sites-to-make-major-changes-after-cma-probe

A link to a BBC report about the CMA investigation can be found below:

I saw this on the BBC News App and thought you should see it:

Hotel booking sites to end ‘misleading’ sales

Hotels agree to be clearer about discount claims and stop high-pressure selling tactics.

Copyright – Seán J Crossan, 14 March 2019