CMA Chair Says Regulation On Big Digital Mergers Has Been Lax

CMA Chair Says Regulation On Big Digital Mergers Has Been Lax

Andrew Tyrie, chairman of the Competition and Markets Authority (CMA), a competition regulator in the U.K., said his fellow regulators have been too soft on digital mergers, and consumers have suffered as a result, according to the Financial Times.

He also called for stronger abilities to go after large tech companies. He spoke at a CMA conference on Tuesday (March) and said there had “probably been underenforcement of merger control in digital markets.” His comments line up with those by CEO Andrea Coscelli.

Big tech companies like Apple and Facebook could “destroy a small business with a change to an algorithm,” he said. He added that by not cracking down on mergers, it was increasingly costing consumers.

Facebook acquired Instagram for $1 billion in 2012 and WhatsApp for $19 billion in 2014. On Monday (March 2), Coscelli said the mergers were examples of “merger control gone wrong.”

When asked about whether the organization had done enough oversight on the mergers, Coscelli said the deal gave Facebook a hard-to-foresee “competitive advantage,” which helped it to offset its own declines.

The CMA, he said, needed to learn from these “wrong decisions.”

Right now, the CMA is prepping to grow in stature and responsibility as the U.K. leaves the European Union, and it’s going to chase down some antitrust cases on its own against American tech giants.

It’s also going to launch a new tech regulator, which would let some businesses have a strategically advantageous market status but compel them to exist by a code of conduct. Coscelli said the CMA is figuring out whether to add that idea to its own work “based on concerns about potential historic underenforcement.”

Tyrie said Tuesday that the rise of digital companies is also to be blamed for “the amplification of fake news, the erosion of the tax base, the huge increase in the risk of fraud and identity theft, illegal content” as well as “thriving ‘dark markets’ for drugs and weapons.”


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.