Covid-19 Misery May Spread to Competition, U.K. Watchdog Warns

The Covid-19 pandemic is set to deliver a blow to competition as businesses close and customers shop around less, Britain’s antitrust authority warned.

In what it calls a “first-of-its-kind analysis” on how well competition is working across the U.K. economy, the Competition and Markets Authority said that regulators and lawmakers need to be on high alert as markets come “under strain.”

“Our findings suggest a need for vigilance -– by the CMA and by government –- to ensure competition is not weakened because of the effects of coronavirus,” Mike Walker, the CMA’s Chief Economic Adviser, said in a statement.

Around 40% of consumers are shopping around less, particularly those more vulnerable to the pandemic, such as the elderly. The regulator said at this point, it’s not sure whether the U.K. will see a return to pre-pandemic behavior in the future.

While there has been no spike in business closures so far, 40% of companies have postponed or reduced expansion plans and the overall business population shrank in the second quarter for the first time in three years.

©2020 Bloomberg L.P.

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