CMA decides to investigate the UK’s Electric Vehicle Charging market

Our team: Alex Haffner, Sam Tye

On 2 December, the Competition and Markets Authority (CMA) announced the launch of a ‘market study’ into the UK electric vehicle (EV) charging market.[1] The CMA’s announcement comes against the background of an amendment to the Climate Change Act 2008 in 2019  giving the force of law to the UK’s commitment to have net zero emissions of greenhouse gasses by 2050, bringing forward the ban on the sale of new petrol and diesel cars twice in 2020 (first to 2035 and then to 2030), and the recently published  UK National Infrastructure Strategy, which includes commitments on the roll-out of EV charging infrastructure.

The CMA has a range of powers to investigate markets in which particular features may give rise to anti-competitive effects that would not be captured by other competition law rules (in particular, the prohibitions on anti-competitive agreements and abuse of dominance).  The focus of such investigations will, therefore, be on industry-wide practices that are harming competition, rather than the behaviour of a specific firm or firms.

What will the CMA focus on it this Market Study?

The stated object of the CMA’s EV market study, which is intended to include all (public and private) types of electronic charge points, is to:

help to make sure the [EV Charging] sector works well for consumers as it grows and prevent any competition problems before they become embedded.”

CMA observes that there has been a significant increase in the number of charge points in the UK in recent years, with a 632% increase since 2015 and a range of different providers having emerged.  However, it also recognises that, in order to meet future demand, EV charging infrastructure will need to grow significantly in the UK.

Against this background, the CMA intends to focus on two key themes:

  • How to develop a competitive sector while also attracting private investment to help the sector grow: incentives to build EV infrastructure, current or potential barriers to entry and expansion in the sector, and how different policy approaches can build on current support, including the role of local authorities; and
  • How to ensure consumers using EV charge points can get the best out of the service: how to make informed decisions on charging, whether price and payment options make it difficult to compare and switch providers, and other factors impacting on the consumer experience (eg access or availability).

What might be the outcome of this market study?

Market studies focus on the causes of why particular markets may not be working well by looking at regulatory/economic drivers and patterns of consumer and business behaviour.  Publication of a market study notice triggers certain statutory time limits:

  • where the CMA proposes to make a full market investigation reference, or representations have been made arguing that a reference should be made, it must publish a notice of its proposed decision and begin the process of consulting within six months of publication of the market study notice; and
  • the CMA must publish a market study report setting out its findings and the action (if any) it proposes to take within 12 months of publication of a market study notice.

As well as a market investigation reference, which puts in motion a very detailed examination of the relevant market, the CMA has a range of tools to tackle any of the concerns it has raised in its study.  These can include guidance to the sector and/or consumers on commercial practices, recommendations to the government where additional support is required or policy or regulatory intervention is advisable. At this stage, the CMA will keep an open mind as to any outcomes or combination of outcomes that may be appropriate.

What happens now?

The CMA has issued an Invitation to Comment which sets out the framework for the Market Study and has invited interested parties to respond by 5 January 2021 on the outline issues set out in the document.

The next step will be for the CMA to write to a range of interested parties to seek factual information and views. Detailed questionnaires may be sent with a specified timescale within which reply is requested. Based on past experience, the CMA might also conduct meetings, interviews and telephone surveys and will want to ensure companies respond appropriately. Earlier this year the CMA fined a company, AppNexus, £20,000 for failing to respond adequately to the CMA’s request for information in the context of its Market Study into the Digital Advertising sector.

Concluding thoughts

It is no coincidence that the CMA has decided to launch its market study at this time, given the UK’s ever increasing focus on net zero greenhouse gas emissions, and the importance of a national EV charging infrastructure to reducing the significant contribution made to greenhouse gas emissions in the UK by the transport sector. This sector is set to see significant growth during the course of the 2020s and will no doubt come to be seen as an attractive sector for new market entrants and investors.

In view of the likely influence of the CMA’s intervention in the future development of the EV market, investors, network operators and other stakeholders would be well advised to actively participate in the EV Market Study.


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