Competition watchdog wants power to order refunds for UK consumers
Key Points
- The CMA wants powers to order lawbreaking firms to compensate consumers directly
- Payouts could use a set presumed overcharge instead of detailed damages assessments
- Consumers accepting scheme payouts could be asked to waive further claims
- A CAT web page would list genuine class action claim sites
- The CMA backs full damages immunity for the first firm to report a cartel
The UK’s competition watchdog wants powers to make lawbreaking firms pay consumers back directly.
The Competition and Markets Authority (CMA) set out its position in its response to the government’s consultation on swifter and simpler competition redress.
Consumers who overpay because firms secretly agreed to fix prices currently rely on class actions at the Competition Appeal Tribunal (CAT) for compensation.
The CMA said these claims can be complex, lengthy and costly, with uncertain outcomes for consumers. It added that the number of claims has grown significantly since 2015, adding to the tribunal’s workload.
Under the proposals, the CMA could order a firm to set up a compensation scheme after finding it broke competition law. The regulator could also accept binding promises from firms to set up their own schemes.
The CMA said the power would suit cases where a large number of consumers each lost a relatively small amount. It pointed to price-fixing cases where the facts already show roughly how much extra consumers paid.
The regulator backed a proposal to calculate payouts using a set figure for how much extra consumers paid, rather than a detailed damages assessment. Firms could still argue against that figure in specific cases.
Romania already presumes consumers paid 20% extra in competition damages cases, while Hungary and Latvia use 10%.
“Where an infringement has been proven, a reasonable estimate of loss is often preferable to the risk that affected consumers will be left uncompensated due to evidential or procedural barriers,” said the CMA.
The regulator said the cost and difficulty of working out exact losses can mean consumers receive no compensation at all.
Protection against paying twice
Firms running a compensation scheme could require consumers who accept a payout to give up further legal claims. Money offered through a scheme would also count against the value of any later class action.
The CMA wants the government to go further and have the tribunal start from a position of refusing class action claims for losses a scheme already covers. It said this would stop businesses that pay compensation from facing claims twice for the same conduct.
The regulator said businesses may prefer to design their own voluntary scheme rather than wait for a CMA order.
The government also proposed a page on the CAT website listing links to every live class action claim website.
The page would let consumers check that a claim is genuine before signing up. The CMA said it would link to the page from its own website.
Immunity for cartel whistleblowers
The CMA also backed full immunity from damages claims for the first firm to report a price-fixing cartel it took part in.
Applications from these first reporters fell from an average of 21 a year between 2014 and 2016 to eight a year between 2022 and 2024. The regulator said fear of follow-on damages claims may be discouraging firms from coming forward.
The CMA’s own review found around 100 cartel claims before the CAT and High Court between 2020 and 2025. Almost all of them relied on facts uncovered by an earlier competition authority investigation.
Victims would still be able to recover compensation from the other members of the cartel. The CAT could also withdraw immunity where the remaining firms cannot pay, for example because they have gone bust.
The CMA said it would decide case by case whether ordering compensation is appropriate. It added that cases where firms passed extra costs down the supply chain can be complex to assess.
