In this article, members of our international competition team share their insights on competition authorities’ investigations into both anticompetitive conduct and consumer harms. We focus on the investigation trends of the European Commission (EC), the Australian Competition and Consumer Commission (ACCC), the UK Competition and Markets Authority (CMA) and the Chinese State Administration for Market Regulation (SAMR). 

Focus on the digital economy and sustainability

Investigation trends in recent years show a surge in active competition and regulatory investigations worldwide. In part this is because competition authorities have been addressing the backlog of planned inspections accumulated during the COVID-19 pandemic. The impact of the pandemic on supply chains and price increases experienced by consumers have also fuelled this surge in activity. Furthermore, competition concerns regarding online platforms and digital markets have spurred increased engagement in competition enforcement efforts. The development of information technologies, along with the increasing significance of data, has influenced inspection trends worldwide. See our article on forensic aspects of investigations for further information on this.

In recent years, the regulators in Australia, the EU and the UK have intensified their scrutiny of the digital economy, as well as focusing on issues of sustainability. For instance, in response to a 2022 Internet sweep revealing numerous vague and unqualified environmental claims, the ACCC commenced several greenwashing investigations in relation to companies that were making allegedly misleading or deceptive claims. Scrutiny of green claims is now filtering through from investigation to enforcement. 

The CMA has paid particular attention to sustainability claims, specifically in the fashion industry, and secured undertakings from three fashion retailers to change the way they display, describe and promote green credentials. They also launched an investigation into potentially misleading green claims about hydrogen readiness in domestic boilers. 

The EC launched competition law investigations by leveraging information from leniency applicants and its own investigative activities. It has conducted unannounced inspections across a number of sectors, targeting different types of misconduct, with the goal of sending deterrent signals and encouraging compliance. For instance, there has been a resurgence in the number of inspections conducted by the EC and national competition authorities, with a focus on such fields as chemicals, fashion and online food delivery. 

The competition authorities have also been directing their attention to the digital economy, particularly online platforms, and technology companies. The CMA, EC and ACCC have also taken enforcement action against leading digital brands. For example, the ACCC has recently launched the latest phase of its five year Digital Platform Services Inquiry by releasing a white paper on search services, to assess the level of competition in general search services and trends in search quality. This follows its proposal to introduce mandatory codes to regulate digital platforms with substantial market power.

Fostering Global Collaboration: Cross-Border Initiatives 

Another current trend is the increased practice of cross-border collaboration between the authorities in planning and carrying out investigations across the globe. This has included practices such as conducting simultaneous inspections in various locations and collaborating on efforts to detect and investigate anti-competitive behaviour.

In February 2022, the national competition authorities of the ‘five-eyes’ countries (UK, USA, Australia, New Zealand and Canada) established a new working group. This initiative was prompted by concerns over price increases due to disruptions in the global supply chain and the desire to share intelligence and jointly investigate instances of anti-competitive behaviour.

Additionally, there have been a number of cross-jurisdictional investigations. For example, in 2022 the EC and the CMA simultaneously carried out on-site inspections of associations operating in the automotive sector across both the EU and the UK. Further examples occurred in March 2023, when the EC, together with the CMA and US and Swiss competition authorities, carried out inspections at the premises of fragrance manufacturers, and in October 2023, when the EC conducted inspections at construction chemical companies, collaborating with competition authorities from the UK, Turkey and the USA. 

Navigating Competition Law in a Shifting Landscape

While markets continue to evolve, the approach to competition law enforcement is also evolving to reflect changing market practices and priorities.  

For example, in the UK, the CMA will be required to adopt a more proactive and pre-emptive approach to digital markets. The Digital Markets, Competition and Consumers Bill will grant the CMA enhanced powers to oversee firms with strategic market status (SMS), enabling it to impose conduct requirements, investigate potential competition issues, and enforce pro-competition interventions. Additionally, a proposed amendment in the Investigatory Powers (Amendment) Bill could expand the scope of authorities' powers over digital communications and data. 

China has recently eased its strict oversight of the tech sector after a period of intense scrutiny and significant fines for anticompetitive practices. While the SAMR retains extensive investigatory powers, there has been a shift towards promoting healthy growth and adjusting regulatory measures to foster innovation in the tech industry. At the same time, SAMR continues its rigorous oversight of monopoly agreements and abuses of dominance, particularly in the digital economy. Recent enforcement trends indicate a new focus on the abuses of administrative power and price-fixing and market sharing cartels in the sector controlled by the Stated Owned Enterprises.

In Australia, the past five years have seen a number of notable legislative developments, including the introduction of significantly higher penalties for competition law contraventions. While this escalation in penalties has not necessarily signalled a shift in the ACCC investigation approach, the risk of higher penalties has undoubtedly focused the attention of companies under investigation and is intended to act as a deterrent. The ACCC is also conducting a review of its cartel immunity policy, which has to date been quite effective in leading to significant prosecutions. The ACCC’s focus over the next few years may also be impacted by proposed merger reforms to introduce a mandatory, suspensory merger clearance regime, while the Government has also foreshadowed the introduction of industry codes for digital platforms. 

In the EU, the EC has been focusing on digital markets and sustainability, with an emphasis on enforcement against exclusionary abuses and anticompetitive agreements. The EC has also been investing in ensuring fair competition in e-commerce and data economy sectors, where it has conducted competition and regulatory proceedings. In parallel, the EC has started to apply the Digital Markets Act, forcing the six identified gatekeepers to adapt to the ex ante obligations, in order to stimulate fair and contestable digital markets in the EU and prevent abusive behaviour. Please see our article on the DMA act for further information on this.

Future Trends - How will investigation trends develop across the globe?

These developments highlight a global trend towards more intrusive regulation of digital markets and sustainability, with a balancing act between fostering innovation and preventing anti-competitive practices. The competition authorities of each jurisdiction are tailoring their approach to local market conditions and broader international trends. 

In the EU, the number of investigations is expected to increase in response to the EC’s use of a variety of detection methods, sending deterrent signals to a broader audience and stimulating compliance efforts. Furthermore, the EC’s efforts to strengthen its leniency policy may affect the number of leniency applications received. In addition, the enforcement of the DMA may result in an increase of EC investigations in parallel to competition investigations. Also, the increasing cooperation between the EC and national competition authorities in the European Competition Network (ECN) is generating its own stream of national and multi-jurisdictional competition law investigations.

In the UK, the CMA has also placed emphasis on sustainability and digital markets, particularly in ensuring that collaborative agreements aimed at environmental sustainability comply with competition law. Additionally, more and more significant attention is expected to be directed towards the digital economy, with ongoing investigations spanning areas such as digital advertising, app distribution and online sales.

In Australia, the ACCC helpfully signposts its enforcement and compliance priorities each year. This provides helpful guidance to businesses and consumers. These priorities have remained relatively consistent year-on-year and key trends can be identified. Given the ACCC’s dual function of promoting competition and overseeing consumer protection, the ACCC is expected to continue to prioritise investigations aimed at addressing cost of living pressures and misleading environmental claims.  

In relation to the former, the food and grocery industry is already the subject of a market price inquiry. Also, heightened focus on the digital economy and compliance with competition and consumer laws can be expected. That said, the ACCC has always been clear that anti-competitive conduct and cartel conduct, irrespective of sector, are long-term priorities and this will always be a key pillar of ACCC investigatory practice. 

In China, the SAMR may be expected to continue its stringent oversight of the administrative power influence on fair competition. The SAMR has also been proactive in reviewing a significant number of mergers and acquisitions, reflecting its scrutiny of market consolidation effects.

If you need more information or further guidance in this area, please contact Thomas Jones, Pauline Kuipers, Peter Willis, Maria Karpathakis, Reshmi Rampersad, Tenisha Cramer, Serena Du or Patrick Cordwell.

This article is part of a special edition on Investigations of our monthly newsletter Competitive Edge.

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