The UK reform agenda

The former Chair of the Competition and Markets Authority (CMA), Lord Andrew Tyrie, has written a report setting out some suggestions to reform the competition regime.  This follows an FT opinion piece earlier this year, and his much-discussed letter to the Secretary of State in February 2019 advocating reforms to the competition regime.

Lord Tyrie’s report sets out his views on the alleged “legitimacy deficit” of the CMA caused by its complexity, invisibility, impenetrability, and fragmented accountability.

(As an aside, Lord Tyrie laments a poll that suggests two-fifths of the business community have never heard of the CMA.  Personally, I’m not sure what an acceptable level of name recognition would be.  I’m tempted to reverse the statistic and be pleased that the majority of the business community have heard of the CMA.  Perhaps the CMA is doing pretty well when three-quarters of British people apparently cannot name their Member of Parliament?)

Lord Tyrie recommends a range of modest measures, such as:

  • Moving the decisions about case initiation from senior executives to the CMA Board,
  • The CMA explaining itself and informing the public debate to a greater extent, and
  • Making sure the long-awaited tweaks to the legislation set out in his February 2019 letter happen.

There is some truth to Lord Tyrie’s assessment.  The CMA could always do more to get closer to the people they serve and to streamline their work.  However, we should not forget that a lot of the CMA’s work is really difficult to explain to consumers, and unavoidably so.  That does not mean that consumers will not hugely benefit from (e.g.) its antitrust investigations into Google’s Privacy Sandbox, Apple’s app store practices and Facebook’s use of data.

We should also not forget that the CMA’s work in cases like its retail banking market investigation causes consumer benefits that are measured in the billions of pounds.  That is real money in real people’s pockets whether or not they have heard of the CMA and whether or not a House of Commons select committee gets to grill the CMA’s CEO. 

For its part, the CMA’s own prescription is also to pursue Lord Tyrie’s tweaks to the legislation, but (as regular readers of this blog very well know) it has also proposed a major new regulatory regime that will improve the digital services that are so fundamental to modern life and are the sources of a lot of the “exploitation and rip-offs” that Lord Tyrie talks about.  That regime will explicitly include consumer protection on issues such as the invasion of privacy and the manipulation of consumer behaviour, as well as the more arcane objective of enhancing competition.  The regime, in addition to the CMA’s delicate new role in the UK’s subsidy control regime, will undoubtedly raise the CMA’s public profile.

We await the UK Government’s White Paper on the new Digital Markets Unit regime. As of this morning, it is now promised in “summer 2021” (which presumably means September?). The Government’s views on the wider tweaks to the competition legislation may be consulted upon separately, but they are intertwined to some extent, so we will see soon enough what the competition regime will look like in the coming years.

[Updated on 6th July to take account of DCMS’ policy paper]

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