The Competition and Markets Authority (“CMA”) has backed down from its decision in the Market Investigation into Privately Funded Healthcare Services (the “PH Investigation”), which required HCA to divest some of the private hospitals it owns. The climb-down is another major setback for the PH Investigation, the latest of several for the CMA during what has been a troubled inquiry. It is concerning that this reversal comes only after the Competition Appeal Tribunal ordered the CMA to disclose key evidence supporting its conclusion. For a major competition inquiry to collapse simply following disclosure of the evidence is highly damaging to the CMA’s nascent reputation. The CMA will want to take urgent steps to improve matters for current high profile inquiries into energy and banking. Hopefully, those steps will include a fundamental rethink of the approach to disclosure in ongoing and future investigations.

Context -

In the PH Investigation, the CMA concluded that HCA’s hospitals had market power in Central London and that, as a result of this, it was charging excessive prices to self-pay patients and to private medical insurers. In order to rectify the problem, the CMA imposed a number of remedies, including a divestment order requiring HCA to sell either the Wellington hospital or both the London Bridge and Princess Grace hospitals. HCA appealed the CMA’s findings before the CAT and sought to have the divestment order quashed. If the appeal is successful, the CAT would remit the matter back to the CMA for reconsideration, giving appropriate directions as to how the new process should be conducted.