In September 2021, the UK Competition and Markets Authority (CMA) announced the official launch of the Office for the Internal Market (OIM), a new unit within the CMA intended to support the effective operation of the UK internal market through monitoring, publishing reports and advice, and making recommendations to the Government. This article examines (i) what the OIM does and why it was introduced; (ii) how the OIM proposes to carry out its functions; (iii) the OIM’s information gathering powers; and (iv) broader implications for UK competition policy.

The UK Internal Market Act 2020

When the UK was a member of the EU, it was subject to uniform rules and regulations that applied to products and services across the EU single market. This in turn ensured that uniform rules applied across the whole of the UK. Following Brexit, EU law no longer prevents the devolved administrations or national authorities in Scotland, Wales, and Northern Ireland (other than goods that fall within the scope of the Northern Ireland Protocol) from legislating or implementing rules and regulations that have the potential to affect trade within the UK.[1]

To address this concern, the UK Government introduced the UK Internal Market Act (the UKIMA). The Act is intended to ensure “the continued seamless functioning of the UK Internal Market” and that “the rules governing the production and sale of goods and services in one part of the UK are recognised as being as good as the rules in any other part of the UK.[2] It enshrines in law the principles of:

  • Mutual recognition: if a good complies with requirements in one part of the UK where it was produced or imported, it can be sold in another part of the UK without having to comply with any additional local the requirements, and
  • Non-discrimination: a requirement will have no effect to the extent it directly or indirectly discriminates against goods connected to another part of the

The UKIMA in effect creates a “lowest common denominator” approach to trade regulation between the four constituent nations of the UK. With limited exceptions, and in the absence of a common framework agreement,[3] a national authority cannot impose a higher regulatory burden on goods imported from another UK nation. Common framework agreements have so far been provisionally approved in relation to matters such as driving licences, rail technical standards, motor insurance, and nutrition labelling.[4]

The Role of the OIM

The UKIMA provides for the OIM to be established within the CMA. Its overarching objective is “to support, through the application of economic and other technical expertise, the effective operation of the internal market in the United Kingdom.”[5] Its functions include monitoring and reporting on the operation of the UK internal market,[6] as well as providing reports and advice on the effect of specific regulatory provisions in response to requests from the UK or a devolved government. The OIM is headed by a Senior Director, Rachel Merelie, who previously held a number of senior roles within the CMA. She oversees a team with delivery, economic, legal, and business advisory functions located across the CMA’s offices in London, Belfast, Cardiff, and Edinburgh. The UKIMA also establishes the OIM panel within the CMA, consisting of a panel chair, who will sit on the CMA Board, and a number of panel members. OIM panel members are expected to be appointed by April 2022.

When carrying out its functions, the OIM must have regard to its objective to support the effective operation of the UK internal market and the need to act even-handedly in relation to the relevant national authorities. Crucially, the OIM’s role is advisory rather than decision-making.

In addition to its functions under the UKIMA, the OIM is tasked with setting up a “Subsidy Advice Unit” to receive notifications of subsidies from public authorities, including devolved administrations and local authorities, under the Subsidy Control Bill (as and when it passes into law). The Subsidy Control Bill – the UK’s equivalent of a state aid regime – establishes “subsidies of interest” and “subsidies of particular interest” that can be referred to the Subsidy Advice Unit on a mandatory or voluntary basis. The OIM anticipates reviewing between 10 and 40 subsidies per annum.[7]

In September 2021, the OIM published two guidance documents setting out how it proposes to carry out its functions under the UKIMA: (i) Guidance on the operation of the OIM,[8] including the analytical approach it will adopt and the prioritisation principles it will use when it decides which work to undertake pursuant to the UKIMA (the OIM Guidance), and (ii) a Statement of Policy on the enforcement of its information-gathering powers (the OIM Statement of Policy).[9]

Analytical Approach

The OIM’s analytical approach will focus on the impact of divergent regulatory approaches on the effective operation of the UK internal market, including (i) minimising barriers to trade, investment, and the movement of labour between all parts of the UK, (ii) ensuring that businesses or consumers in one part of the UK are not favoured over others, and (iii) effective management of regulatory divergence (including through the use of common framework agreements).[10] The OIM will use the following tools to analyse the impact of divergent regulatory approaches on the UK internal market.[11]

  • The OIM will gather information on relevant developments by (i) undertaking market monitoring activities; (ii) developing toolkits and processes to understand the evolution of regulatory regimes across the UK; (iii) launching an Online Gateway to gather evidence from consumers, suppliers and producers; and (iv) gathering intelligence from other sources (e.g., routine stakeholder interaction).
  • Evidence gathering. The OIM will use its monitoring processes to gather evidence on the volume and nature of regulations that are introduced, regulatory complexity and divergence, measures of intra-UK trade, and other areas of potential relevance, such as investment flows, industry structure, labour markets, and consumer
  • Mandatory reporting and discretionary The OIM will produce annual and five-yearly reports on the operation of the internal market in the UK and relevant developments. The five-yearly reports must also cover common framework agreements. The OIM must arrange for a copy of its annual and five-yearly reports to be laid before both UK Houses of Parliament, the Scottish Parliament, the Welsh Senedd, and the Northern Irish Assembly.[12] The OIM’s first annual ‘State of the UK Internal Market’ report is expected to be published in spring 2022. In addition, the OIM can undertake discretionary reviews on any matter it considers relevant to assess the effective operation of the UK internal market and UK market access for goods, services, and professional qualifications.[13]
  • Advice on specific regulatory provisions. On request from the UK or a devolved government (e., the UK Government, the Scottish Government, the Welsh Government and a Northern Ireland Department), the OIM will provide advice or reports on proposed or passed regulatory provisions[14] and their potential economic effects on the operation of the UK internal market.[15]

In carrying out this function, the OIM will examine the nature of the regulatory provision and affected products, the extent of affected intra-UK trade, cost changes or other trade impacts, likely responses by suppliers, the wider set of products, suppliers, and/or geographic areas which may be affected due to demand-side or supply-side substitution, and the cumulative or indirect effects of the regulatory divergences. The OIM will gather evidence from the relevant national authority, suppliers whose businesses are affected by the regulation, customers, trade associations, business and consumer organisations, government bodies, regulators, and other interested and informed third parties.

The OIM must publish reports,[16] but need not publish advice. Advice given by the OIM at the request of one or more national authority must, however, be shared with the other national authorities.[17] Reports and advice are not binding on the national authority that requests them but must be shared with other national authorities and/or laid before the UK and national parliaments.

Prioritisation Principles

The OIM states that it will use the following principles to “inform decisions about what discretionary work the OIM will carry out, in particular should there be significant numbers of proposals for the OIM to undertake discretionary reviews and reports or requests for reports or advice on specific regulatory provisions (on request from relevant national authorities), and to inform decisions about intelligence or information identified by the OIM through its own monitoring activity”:[18]

  • The matter’s significance, including its relevance, appropriateness, timeliness, novelty and contribution to knowledge growth, as well as considering whether it would foster or facilitate new partnership approaches between relevant authorities and whether it could assist relevant authorities to prevent or mitigate future impacts on the internal market.
  • The potential impact of the matter on consumers, enterprises, trade, investment, and general economic The OIM will also consider whether it is acting in the “least intrusive way necessary to achieve its aims and objectives, consummate with its statutory duties.”
  • Even-handedness. The OIM will consider how the matter “contributes to a fair and balanced programme of work across the four nations and across the internal market ”
  • The OIM will have regard to the resource implications of any proposal, including whether the benefits from doing the work justify the resource requirements.

Information Gathering

The OIM can use information-gathering powers to fulfil its reporting, advisory, and monitoring functions. The OIM considers the provision of “timely, complete and accurate information” to be “critical to the OIM’s effectiveness and ability to fulfil its functions.[19] The OIM’s information gathering may in practice include informal requests, invitations to meetings or calls, and compulsory requests to any person under section 41 of the UKIMA (‘Section 41 Notices’).[20]

The OIM states that Section 41 Notices are most likely to be used where the OIM considers it necessary to obtain information that is “essential for its advice and/or reports and that could not be obtained in a timely manner through other means.”[21] The process of the OIM issuing Section 41 Notices largely mirrors CMA information requests in the context of merger, antitrust, and market investigations. In particular, addressees will normally be invited to comment on a draft request; the request will set out its purpose, how it relates to the OIM’s functions, the information and/or documents the OIM requires, and the consequences for failure to comply with the request; and the OIM will seek to set a reasonable deadline for all Section 41 Notices.

Given the “importance of information to the OIM’s reporting, advisory and monitoring functions,”[22] the OIM can under section 43 of the UKIMA impose penalties on persons who fail to comply with a Section 41 Notice without reasonable excuse. The OIM can impose both a single fixed amount, a daily rate, or both, depending on the circumstances. The maximum fines that the OIM can currently impose are a £30,000 fixed amount and a £15,000 daily rate (or a mixture of the two). These limits are the same as the limits that apply to the CMA in relation to information gathering under the Competition Act.[23]

Penalties imposed under section 43 of the UKIMA for failure to comply with a Section 41 Notice are appealable to the Competition Appeal Tribunal.

Interaction with the Northern Ireland Protocol

The UKIMA applies to Northern Ireland in respect of services as it does to England, Scotland, and Wales. Goods in Northern Ireland are, however, subject to the Northern Ireland Protocol to the UK-EU Withdrawal Agreement that entered into force in January 2020. The Protocol effectively created a regulatory and customs border between Great Britain and Northern Ireland in respect of goods. As such, the UKIMA excludes from the definition of a “regulatory provision” anything that is necessary to give effect to the Northern Ireland Protocol.[24] The OIM’s mandate to monitor and report and advise on the operation of the UK internal market therefore does not apply to goods covered by the Northern Ireland Protocol. The OIM will not, for example, review the impact of the Northern Ireland Protocol (or legislation necessary to implement it) on the operation of the UK internal market as part of its annual and five- yearly reports or discretionary reviews.[25]


The UKIMA was controversial when it was introduced and failed to achieve support from the Welsh Senedd or Scottish Parliament.[26] Their main objection was that the market-access principle applied in the absence of a common framework agreement on how devolved or transferred matters previously governed by EU laws should be regulated, and there is no obligation on the UK government under the UKIMA to introduce a common framework agreement.[27] The Scottish Government criticised the UKIMA as “based on unilateral decision-making and imposition, with no minimum standards or guarantees [and which] creates a power for UK Ministers to alter what is in or out of the scope of the Act unilaterally (for example, health services are currently excluded), without the consent of devolved administrations.”[28]

The OIM will nevertheless have to work with the devolved administrations and will be required to challenge measures that fail to observe the principles of mutual recognition and non-discrimination. Placing responsibility on the CMA to carry out this assessment suggests that the UK Government is alert to these political tensions and is keen to ensure that the OIM’s recommendations are based on an objective assessment conducted by an independent agency insulated from political pressures. It also suggests that the OIM will rely on established economic principles and the expertise of the CMA when analysing the effects on trade and any market distortions arising from regulatory measures.

[1] Relevant national authorities are: (a) the Secretary of State; (b) the Scottish Ministers; (c) the Welsh Ministers; (d) a Northern Ireland department.

[2] Department for Business, Energy & Industrial Strategy, UK Internal Market Policy Paper (July 2020).

[3] Common framework agreements are defined as agreements between the UK and a devolved government as to how “devolved or transferred matters previously governed by EU laws are to be regulated after [31 December 2020].” See UK Internal Market Act, s.18(4).

[4] Cabinet Office, UK Common Frameworks,

[5] UKIMA, s.31(2).

[6] UKIMA, s. 33.

[7] Mlex, UK CMA expects Subsidy Advice Unit to receive up to 40 references a year, exec says (October 27, 2021).

[8] See OIM, Guidance on the Operation of the CMA’s UK Internal Market Functions, OIM1 (21 September 2021).

[9] OIM, Statement of Policy on the Enforcement of the OIM’s Information Gathering Powers, OIM2 (21 September 2021). The OIM is required to publish this Statement of Policy under UK Internal Market Act, s. 42.

[10] OIM Guidance, para. 3.2.

[11] See further OIM Guidance, paras. 3.8 to 3.36.

[12] UKIMA, s.33(7).

[13] UKIMA, s. 33(1).

[14] A “regulatory provision” is defined in Part 4 of the UK Internal Market Act as a provision contained in legislation or a provision not of a legislative character but made under, and given effect by, legislation (but excluding a provision so far as it contains anything that is necessary to give effect to the Northern Ireland Protocol).

[15] UK Internal Market Act, ss. 34 to 36.

[16] UKIMA, s. 34(10).

[17] UKIMA, s. 34(9).

[18] OIM Guidance, para. 4.2 ff.

[19] OIM Statement of Policy, para. 3.2.

[20] UK Internal Market Act, s. 41. OIM Guidance, paras. 2.40 to 15.

[21] OIM Statement of Policy, para. 3.5.

[22] OIM Statement of Policy, para. 3.15.

[23] Competition and Markets Authority (Penalties) Order 2014.

[24] UK Internal Market Act, ss. 30(8) to (9).

[25] OIM Guidance, para. 2.13.

[26] See further Stephen Weatherill, Will The United Kingdom Survive The United Kingdom Internal Market Act? (UKICE working paper, March 2021).

[27] Ibid.

[28] Scottish Government, After Brexit: The UK Internal Market Act and devolution (March 8, 2021).