The Competition and Marketing Authority (CMA) announced last week that it is launching a taskforce to deal with businesses that try to exploit the situation and take advantage of consumers during the COVID-19 pandemic.

The CMA has already contacted traders and platforms regarding excessive pricing of hand sanitiser. Furthermore, it has published an open letter to the pharmaceutical and food and drink industries advising them that companies seeking to capitalise on the current situation by charging unjustifiably high prices for essential goods or making misleading claims about the products will be dealt with using the CMA’s entire range of competition and consumer powers to tackle unacceptable practices.

At the beginning of the outbreak the CMA had asked retailers to behave responsibly and warned that it would consider any evidence that companies may have broken competition or consumer protection law. The CMA said that members of the public who resell goods on an online marketplace, for example, may also be subject to the same restrictions.

CMA Chair Lord Tyrie said "We will do whatever we can to act against rip-offs and misleading claims, using any or all of our tools; and where we can’t act, we’ll advise government on further steps they could take, if necessary."

The CMA’s taskforce will:

• Scrutinise market developments to identify harmful sales and pricing practices as they emerge.
• Warn firms suspected of exploiting the exceptional circumstances, and people's vulnerability, through unjustifiable prices or misleading claims.
• 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 that 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.

The CMA has said that it understand some price increases may result from increases further up the supply chain and if this is the case they have asked stakeholders to inform them so they can investigate the issues. Information should be sent to covid.monitoring@cma.gov.uk.

The CMA has published a form to report concerns about business practices during the COVID-19 outbreak.

For any questions about this or any other commercial law matters please contact Chris Taylor on 01484 821 300.