The Digital Markets, Competition and Consumers Bill

The UK Government is introducing legislation that will significantly strengthen the powers of the Competition and Markets Authority (“CMA”) to enforce UK consumer law, in the form of the Digital Markets, Competition and Consumers Bill. This was introduced to Parliament in Spring 2023. Although it has passed its Commons stages, it still needs to complete its passage through the House of Lords. The legislation will give the CMA powers to take decisions on consumer law infringements without going to court and to impose fines of up to 10% of annual turnover (as it is already able to do for breaches of competition law).  Our briefing explains why the changes will give the CMA a much stronger hand when looking at potential breaches of consumer protection law in future.

1. Consumer Law in the real estate sector

In terms of how this impacts on the real estate sector, the CMA – as an enforcer of consumer law – has shown itself to be interested in the following aspects of real estate activity:

1.1 Care homes and the senior living sector

The elderly are generally regarded as vulnerable consumers and the senior living sector has been investigated for breaches of consumer law on a number of occasions in the past, for instance over retirement home “exit fees” and most recently over care home administration costs. 

1.2 The Rented Housing Sector

Amid widespread concern about the workings of the housing market in the UK, in February 2023 the CMA launched a consumer protection project into the rented housing sector.  Whilst acknowledging that some of the problems in the rented housing sector are not within its remit, it has stated its intention to ensure that ineffective competition or unfair business practices do not increase costs, limit choice or reduce quality for tenants. This is discussed in more detail in our briefing on consumer protection in the rented housing sector.

2. Competition law in the real estate sector

The Bill also makes a number of significant changes to the UK’s competition law regime, where the CMA already has significant enforcement powers – see our briefing for more detail.  In its role as a competition law regulator (as opposed to a consumer law regulator), the CMA has shown interest in the following aspects of real estate activity:

2.1 Supermarkets and anti-competitive activities

The CMA has taken action in 2023 to protect supermarket shoppers by securing agreements from Sainsbury’s and Asda to stop using unlawful anti-competitive land agreements, such as placing restrictions on land they own to stop it being used by a rival supermarket, or negotiating restrictions to stop their landlords granting leases to competing stores in the same vicinity as their existing supermarket.  These activities breach the Groceries Market Investigation (Controlled Land) Order 2010  which was introduced in order to stop supermarkets imposing new restrictions that stop rivals from opening competing stores nearby.  Sainsbury’s has agreed to remove the outstanding restrictions the CMA identified from its land agreements, and Asda has already removed the offending provisions from its land agreements.

2.2 The Housebuilding sector

In February 2023, the CMA launched a market study into the housebuilding sector in England, Scotland and Wales. Following its initial work, the CMA published an update report and consultation on its proposal to refer the sector for a full market investigation in August, as we discussed in our briefing on the CMA’s housebuilding market study. Its preliminary view is that there are two main areas of concern in the UK’s housebuilding sector in the competition law context: land-banking and estate management by private companies for profit.  The CMA has subsequently published for consultation a working paper on the private management of public amenities on housing estates, which has now closed. Part 4 of the Leasehold and Freehold Reform Bill proposes to establish a number of rights for freeholders on estates in relation to which service charges are payable, as discussed in our leasehold reform briefing.