CMA seeks emergency powers to tackle COVID-19 price gouging

The Competition and Markets Authority (CMA) has asked the UK Government for emergency powers to crack down on firms profiteering from the coronavirus pandemic, the Financial Times reports.

The UK competition watchdog said that 'emergency time-limited legislation' was needed to deal with retailers that have ramped up prices for products in high demand such as hand sanitizer and face masks.

Between 10 March and 19 April the CMA received 21,000 complaints related to COVID-19, including alerts about price gouging. On average, the prices complained about had gone up by 130% — and in the case of hand sanitizer, prices had risen by an average of 367%.

The CMA has promised to take enforcement action where necessary. However, competition lawyers told the Financial Times that the CMA can do little to intervene because competition and consumer laws in the UK do not cover price gouging.

Nelson Jung, partner at Clifford Chance, explained: 'These retailers are often small, their behaviour is also not subject to competition rules on abuse of dominance. This means that the CMA has to rely on consumer protection legislation which is arguably deficient in this regard.'

CMA chief executive Andrea Coscelli has contacted the Department for Business, Energy and Industrial Strategy to make the case for temporary new laws.

Speaking to the newspaper, Coscelli said: 'Consumer and competition law are not really designed for emergencies.

'Part of our role is to use everything we have but if there are gaps, to explain to the Government what those gaps are. Ultimately though it's for the Government and Parliament to decide.'

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