A regulator with sharper teeth: what businesses need to know about the CMA's cost of living scrutiny
Melanie Martin, Partner at Dentons, on the Competition and Market Authority’s enforcement powers
The Competition and Markets Authority's (CMA) enforcement powers have been strengthened in the past year and businesses operating in sectors affected by the current cost of living pressures would be wise to take note of how it is using them.
The ongoing conflict in the Middle East has pushed up wholesale oil prices and, with them, the prices consumers pay for heating oil and road fuel. The CMA accepts that some price rises are inevitable when underlying costs increase. By contrast, if businesses are using a period of market disruption to widen their margins beyond what cost pressures genuinely justify, there are now new ways in which the CMA can tackle this.
In the heating oil market, the CMA has launched a formal review after receiving reports of two specific practices: suppliers cancelling existing orders and re-quoting at materially higher prices; and price increases applied to automated deliveries triggered when a household's tank drops below a set level. The CMA is writing to suppliers and intermediaries to gather evidence. No finding of wrongdoing has been made, but businesses should not wait to be contacted before reviewing their own practices.
On road fuel, the CMA's annual monitoring report found that the average retail margin on petrol remains well above historic norms and that operating costs do not explain the gap. It has brought forward requirements for fuel suppliers to provide detailed revenue, cost and sales data to assess whether margins have widened further since the conflict began. The CMA is also keeping a watching brief on other sectors relevant to household budgets, including agricultural inputs, groceries and travel.
What makes this round of scrutiny more consequential is the regulatory framework now in place. The Digital Markets, Competition and Consumers Act 2024, the consumer enforcement provisions of which came into force in April 2025, fundamentally changed how the CMA can act. Previously, enforcement required going to court – a slow and resource-intensive process – or acting under competition law, which is not usually an effective tool in this context (dominance or collusion being required). The CMA can now take direct consumer enforcement action on a range of practices without court proceedings, imposing fines of up to 10% of a business's global annual turnover and issuing directions requiring businesses to change their practices. It also has strengthened information-gathering powers and can move considerably faster than before. If the market review concludes that consumer law has been breached, enforcement action could follow.
From a practical compliance perspective, businesses in affected sectors should already be considering the following questions. Can you demonstrate, with documentary evidence, that recent price increases reflect genuine cost pressures rather than an opportunity to improve margins? Is your pricing methodology transparent and consistently applied? Are your standard terms, particularly around order cancellations and automated delivery arrangements, fair and clearly communicated? Do your internal pricing decisions leave a clear audit trail?
Conducting a pricing review now and taking legal advice on any practices that could attract attention is considerably less costly than managing an investigation and reputational fallout after the fact. The CMA has been explicit that it will act if it finds evidence of unfair treatment. Businesses that have got their house in order have nothing to fear. Those that have not should move quickly.
Melanie Martin is a partner in the Competition team at Dentons, based in Glasgow. She advises businesses on competition and consumer law matters including CMA investigations, market reviews, regulatory compliance and dawn raid preparedness.
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