Competition | UK Regulatory Outlook July 2025

UK housebuilders reach deal with CMA following investigation 

A group of the largest housebuilders in the UK have agreed to a series of legally binding commitments to ensure they are acting lawfully and prevent future anti-competitive behaviour following a Competition and Markets Authority (CMA) investigation. 

The housebuilders have proposed the following commitments, according to the CMA: 

• Not to share competitively sensitive information with competitors, specifically including the prices for which houses have been sold.
• To support the Home Builders Federation and Homes for Scotland to produce guidance on information exchange for the housebuilding industry.
• To pay £100 million in aggregate to programmes supporting the construction of affordable housing in the UK.
• To introduce enhanced in-house compliance measures and training programmes. 

The proposed commitments are now under consultation until 24 July 2025 and, if accepted, will bring to a close the investigation into suspected exchanges on commercially sensitive information in the sector.  

Should the investigation be closed, the CMA will not be required to reach a conclusion on whether the housebuilders had in fact been acting anti-competitively. 

Interchange fees found to be anticompetitive 

The Competition Appeal Tribunal (CAT) has found that Mastercard and Visa's "Default Interchange Fee Rule", which impose a specific charge on all transactions with a Mastercard or Visa card, are inherently anticompetitive. 

The CAT stated that the interchange fees acted as a minimum level for the merchant service charge, preventing free competition between acquirers seeking contracts with merchants. 

As part of the broader interchange proceedings, further trials are either under way or scheduled to examine costs being unlawfully passed from merchants to consumers, and a potential exemption for the fees under EU competition rules.  

This development could constitute significant victory for UK merchants seeking compensation, mirroring the $30 billion settlement already secured by US merchants with Visa and Mastercard. Mastercard has also reached a smaller settlement in the UK which has already been approved by the CAT.  

Class-action appellants lose third-party funding agreement appeal 

Several companies defending class-action proceedings in the UK have lost their bid in the Court of Appeal to declare "third-party litigation funding agreements" (LFAs) unenforceable.  

The Court of Appeal's ruling differentiates between the new LFAs, which calculate returns for litigation funders based on the funding provided (subject to a maximum cap), and damages-based agreements (DBAs) where parties receive returns based on the damages awarded, usually through a percentage mechanism. This differentiation is crucial as class actions often rely on third-party funding to proceed. 

As a result, several high-profile cases against the appellant parties that are underpinned by these types of agreement can proceed. The ruling underscores the importance of third-party funding in supporting collective competition law proceedings and may influence future litigation strategies.