CMA Boss Warns UK ‘Falling Behind EU’ On Tech Regulation

Evil parliament (c) pisaphotography, Shutterstock 2014

Britain risks becoming ‘rule taker’ as government puts off legislation to empower CMA’s digital markets regulator, as EU speeds ahead with major packages

The outgoing chief executive of the UK’s markets regulator has criticised the government’s move to put off giving it more powers over the biggest multinational tech companies, saying it risks handing the lead in regulation to the European Union.

The government set up a digital markets regulator within the Competiton and Markets Authority (CMA) last year, but it requires additional legislation to set its own rules for tech companies.

These were left out of the Queen’s Speech, putting the UK behind the EU, which is in the process of finalising two major packages of bills aimed at regulating tech multinationals — the Digital Markets Act and Digital Services Act, Andrea Coscelli told the Financial Times.

Google CMADivergence

He said that while the UK is no longer part of the EU, in practice corporations are investing in compliance with the bloc’s rules, making it difficult for the UK to set its own path.

Coscelli said the UK is in a good position to set “smart, pro-business, pro-competitive rules of the road”, but if it doesn’t, “in practice we become a rule taker because of the cost of divergence”.

He voiced “frustration” that the UK was initially “ahead of the European legislation” in drafting rules but “we’re now behind”.

Without its required legal powers the agency will focus on its existing resources and numerous probes into the likes of Google, Apple and Facebook parent Meta.

Killer acquisitions

Coscelli, who leaves the CMA at the end of next month, said he had “underestimated” the complexity of the rising workload following Brexit, in particular the resources required by complex merger investigations that were previously handled by EU agencies.

“At any point in time we (now) have six or seven cases” on the level of Nvidia’s controversial takeover of ARM, he said, a workload that has seen its staff grow from around 600 to 900.

While it can intervene in a wide range of mergers, the agency is looking for greater powers over so-called killer acquisitions in which a dominant company buys up a smaller competitor.

“We worry that these companies are so big and powerful that quite a few of their acquisitions are a problem,” he said.

Google probe

The government has promised powers over killer acquisitions, along with other measures, since as far back as 2019.

Coscelli said he plans to return to the private sector and is handing over the reins to general counsel Sarah Cardell, who was named interim chief executive on Friday.

The CMA earlier this month announced a third antitrust probe into Google, with a new investigation into the company’s app store payments.

The probe follows earlier investigations into Google’s advertising rules and its requirements around in-app billing.

Mobile browsers

The agency said it is consulting on the launch of a formal investigation into Apple and Google’s market power in mobile browsers and Apple’s restrictions on cloud gaming through its App Store.

“Right now, choice in this space is severely limited and that has real impacts –- preventing innovation and reducing competition from web apps,” Coscelli said at the time.

“We need to give innovative tech firms, many of which are ambitious start-ups, a fair chance to compete.”

Google said it regularly reviews “how we can best support developers and have reacted quickly to CMA feedback in the past” and that it would “review the report and continue to engage with the CMA.”