UK CMA's Sustainability Consultation

We wrote in February about the CMA’s Draft Guidance on Environmental Sustainability Agreements. In April we submitted our response to the CMA’s consultation which you can read here.

In a nutshell:

• We welcomed the CMA’s progressive stance on the sustainability debate. We think it offers clarity on the key topics and is practically useful to businesses who want to collaborate on sustainability projects.
• We asked the CMA to provide more examples of “Climate Change Agreements” which benefit from an exemption from the normal application of the antitrust rules and we also asked the CMA to keep under review whether biodiversity agreements should be given similar treatment as Climate Change Agreements.
• We suggested that the CMA should adopt a more generous approach to mandatory standard-setting agreements – in line with that of the EU – which would give industries more confidence about setting (more effective) mandatory standards.
• We supported the CMA’s approach on “object restrictions” – those restrictions which are often seen as restrictive of competition by their nature – the express statement that such agreements are in principle capable of being justified provides comfort for businesses.
• We called for more guidance on the types of evidence that the CMA would expect to see to quantify sustainability benefits and emphasised the importance of adopting existing practice on quantification from other government departments.
• We welcomed the “open-door” approach where parties can get comfort from the CMA that their agreements do not infringe competition law and the protection from fines for parties who do engage in consultation, but suggested some clarifications to give businesses even more comfort.
• We raised the risk that publication of information about environmental sustainability agreements might act as a disincentive to businesses from approaching the CMA and suggested that parties be given a greater level of control than is usual about what information can be made public.

If you are grappling with how competition rules apply to sustainability agreements, we are happy to discuss the application of the new UK Draft Guidance in more detail.