This document discusses how the UK's Competition and Markets Authority (CMA) selects cases for market studies. It notes that market studies are a flexible tool to explore whether markets work well for consumers. The CMA draws ideas for market studies from various sources, including other areas of its work, problems identified by other organizations, and horizon scanning of economic indicators and consumer complaints. The selection process involves developing initial proposals before fully scoping out a market study. The CMA reflects that directly linking economic indicators to competition issues can be challenging, so it often uses market studies themselves to identify new areas of focus, such as where markets are changing.

1. Achieving the objectives of market
studies: impact on case selection
OECD Workshop
9 March 2017
Daniel Gordon
Senior Director, Markets
CMA
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2. Give a man a bow and arrow and tell him “Shoot!” …
…..his response will be “At what?”
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3. Policy aims of UK markets framework
“ The importance of competition in an increasingly innovative and
globalised economy is clear. Vigorous competition between firms is the
lifeblood of strong and effective markets. Competition helps consumers
get a good deal. It encourages firms to innovate by reducing slack, putting
downward pressure on costs and providing incentives for the efficient
organisation of production. As such, competition is a central driver of
productivity growth in the economy, and hence the UK’s industrial
competitiveness.”
Productivity and Enterprise White Paper, 2001 (emphasis added)
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4. Implications
● “Proactive” competition policy
● Identification of “problem markets”
● Holistic assessment
● Explicitly deregulatory
● Advocacy
● Independence
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5. Market regime tools
● Call for information: light touch investigation where there
is a preliminary concern
● Market studies: examinations into the causes of why
particular markets may not be working well, taking an
overview of regulatory and other economic drivers and
patterns of consumer and business behaviour
● Market investigations: more detailed examinations into
whether there is an Adverse Effect on Competition in the
market(s) for the goods or services referred. If so, the
CMA must decide what remedial action, if any, is
appropriate
- market investigations give the CMA power to impose remedies,
both structural and behavioural
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6. CMA’s use of market studies
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● A flexible tool to explore whether markets work well for
consumers
● Flexible in terms of:
● Themes/Issues covered
● Outcomes
● Scale
● Resourcing

7. Market studies take a range of forms
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Strategic studies
Longer & larger studies
Shorter studies
Led to enforcement
MIR and significant
reform
Recommendations for
change
Remote Communities – aimed to
understand responsibility for frequent
concerns raised by such communities
Advertising of Prices – research into
advertising and pricing to determine which
practices may mislead consumers and
prioritise where to take action
Personal Current Accounts – included
analysis of bank data and customer surveys
including psychological research . Significant
recommendations and follow-up
Pharmaceutical Price Regulation Scheme
– proposed a value-based pricing alternative
to current scheme. Recommendations
gradually taken forward over recent years
Homebuilding – included surveys, analysis
of land-banks, planning permissions and
carried out case studies . Sector found to be
broadly competitive
Quick House Sales – launched due to
concerns about vulnerable consumers. Study
led to consumer enforcement and
undertakings being given by three firms
BAA Airports – A market study of BAA’s
airports led to a reference to the Competition
Commission.
Sale & Rent-back – a quick study of a
growing sector which recommended statutory
regulation
Medicines Distribution – examined changes
to distributing medicines following significant
volume of complaints. Recommended
regulatory change
Outdoor Advertising – study prompted by
concentration in the sector. Led to
competition enforcement action on media
owners’ contracts with local authorities
Payment Protection Insurance - Super-
complaint, market study led to market
investigation and subsequent action.
Defined Contribution Workplace Pensions
- agreement secured from Pensions
Regulator at the time of conclusion of the
study for reforms to the sector
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8. Waste
management
Pensions
Car hire Infrastructure
ownership
Airports
Range of sectors examined
since 2002
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Airport surface
access
Housebuilding
Aggregates
Higher
education
Extended
warranties
Home collected
credit
Audit
Legal services
Pharmacies
Taxis
Rolling stock
leasing
Comparison
tools
PPRS
Off-grid energy
Rail competition
School
uniforms
Groceries
Estate agents
Retail banking
Energy
Payday lending
Ferries
Local bus
services
Use of dataDentistry
Motor
insurance
PPI
Fuels
Scottish
property agents
Sub-prime
brokerage
Home
insulation
Second-hand
cars
Public-sector IT
/ comms
Online reviews /
endorsements
Care homes
CUPI
Medicine
distribution
Payment
systems
Property
searches
Residential
property mgmt
Sale and rent
back
Timeshares
Forex / money
transfer
Public
subsidies
Opium
derivatives
Pay TV movies
Domestic LPG
Store cards
Insolvency
practitionersLiability
insurance
Organic waste
Public sector
procurement
Quick house
sales
Ticket agents
New car
warranties
Internet
shopping
Equity
underwriting
Doorstep
selling
Consumer
contracts
Energy
efficiency
Domestic
electrical goods
Home repairs /
improvements
OTC
derivatives
Personalised
pricing
Mail
consolidation
Card
surcharges
Public service
markets /
procurement
New / newly
digitised
markets
Economically
regulated or
adjacent
Healthcare /
pharma
Financial
services
Transport
Private
healthcare
Cash ISAs
NI banking
Industrial /
manufacturing
/ agricultural
Conti payment
authorities
Low-income
consumers
Other cross-
sector
Market
investigation
OFT / CC /
CMA project
Travel agents
Remote
communities
Private rental
Housing
Mobility aids
Scottish legal
Regulated
professions or
adjacent
Classified
directories
Outdoor
advertising Newspaper /
magazine dist
Online ad
targeting
Beer in pubs
Retail /
advertising /
publishing
DCTs

9. 9
Collect and
develop
initial view
on ideas
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Development of
outline proposal
Market Study
Development
of full
proposal
Ideas and leads
Initial
research
Project
Delivery
Activity
The “Funnel”
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10. 10
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Ideas and leads
A market study is not the
only outcome
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Competition
Enforcement
Consumer protection
Enforcement
Call for
Information
Market Study
Advocacy
Compliance
Work
“Soft”
Enforcement

11. Sources of “problem markets”
● Other areas of CMA activity
- Mergers
- Competition Enforcement
- Consumer Enforcement
- Markets’ cases
- Unresolved issues
● Problems identified by others
- “Supercomplaints” from designated bodies
- Market references from sectoral regulators
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12. “Horizon-scanning”
● Productivity analysis
- Existing research on productivity drivers
- “Top-down” data approaches
- Central Government productivity priorities
● Consumer assessment
- Trends and changes
- Complaints monitoring
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13. Some reflections
● Directly linking productivity/consumer indicators to a role
for competition policy are “challenging”
● Greater success from indirect approaches that start by
identifying priority sectors/themes
● Often the best approach is to use market studies
themselves as a means of identifying new areas
● Where markets change
● Talk to others
- Academics, Think-tanks
- Consumer bodies
- Other NCAs
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14. Areas to start digging?
● Government involvement with markets
● Where markets are going through change
● Practices/behaviours that are common across
different markets
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15. Achieving the objectives of market
studies: impact on case selection
OECD Workshop
9 March 2017
Daniel Gordon
Senior Director, Markets
CMA15