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Businesses exploiting Covid situation

The outbreak of COVID -19 is an unprecedented and rapidly evolving challenge that has prompted many concerns that businesses might exploit the situation to take advantage of people, for example by charging excessive prices or making misleading claims about their products. In its statement of 5 March, the Competition and Markets Authority (CMA) urged retailers to behave responsibly and said that it would consider any evidence that companies may have broken competition or consumer protection law.

As the public health emergency worsens and its impact on the economy becomes more serious, the CMA is creating a taskforce which will:

  • Scrutinise market developments to identify harmful sales and pricing practices as they emerge.
  • Warn firms suspected of exploiting these exceptional circumstances – and people’s vulnerability – through unjustifiable prices or misleading claims. The CMA has already contacted traders and platforms regarding excessive pricing of hand sanitiser.
  • Take enforcement action if there is evidence that firms may have breached competition or consumer protection law and they fail to respond to warnings.
  • Equip the CMA to advise the Government on emergency legislation if there are negative impacts for people which cannot be addressed through existing powers.
  • Enable the CMA to advise the Government on how to ensure competition law does not stand in the way of legitimate measures that protect public health and support the supply of essential goods and services. It will also advise on further policy and legislative measures to ensure markets function as well as possible in the coming months.

Binding statutory deadlines apply to a significant proportion of the CMA’s work and it intends to continue progressing its cases, making decisions and meeting deadlines – helped in part by the adjustments it is already making including things like remote working.

At the same time, it will continue to monitor timetables including, as permitted, extending statutory timeframes where necessary. It is reallocating resources to help ensure that the most urgent and the most critical work can be done on time.

Andrea Coscelli, the CMA’s Chief Executive, said:

This is obviously a time when we all have to behave responsibly to protect our fellow citizens, and particularly those who are most vulnerable. We urge retailers to behave responsibly in the exceptional circumstances of the COVID -19 outbreak.

But if they do not, our taskforce is monitoring market developments to enable us to intervene as quickly as possible. We have a range of options at our disposal, from warnings to enforcement action to seeking emergency powers. We hope that such action will not be necessary, but we will do whatever is required to stop a small minority of businesses that may seek to exploit the present situation.

Andrew Tyrie, the CMA’s Chairman, said:

The intervention in the economy necessitated by public health policy may have a substantial impact on competition, with the risk of an increase in consumer detriment. That’s why this taskforce is needed.

The CMA is already mitigating some of these risks using existing powers. We are working closely with the Government to address this detriment and to advise where extra time-limited powers, exercisable on a contingency basis, may be needed.


20 March 2020
Last Updated
26 October 2020
Published in