Competition regulator "killing" UK startups with last-minute interventions

Competition and Markets Authority

The UK's competition watchdog is stifling the country's tech startups with last minute and lengthy investigation while global rivals race ahead, a lobbying group has warned.

The Coalition for a Digital Economy (Coadec) has written to the Chancellor Rishi Sunak, suggesting that the Competition and Markets Authority (CMA) is undermining the success of UK startups with "eleventh-hour interventions" into mergers, acquisitions and investments, according to City AM.

The regulator has made a number of interventions in recent tech deals, such as Just Eat's merger with and Amazon's investment in Deliveroo, all while it calls for a clampdown of large tech giants.

"The recent actions of the CMA reflect an ignorant one-size-fits-all approach to tech acquisitions, investment and mergers that can only damage the tech ecosystem in the UK," Dom Hallas, Coadec executive director, reportedly wrote.

"These interventions not only create investor uncertainty but also starve scaling companies of capital at the very moment they need it most."

Last year, the Furman Review into digital competition also warned this kind of slow enforcement could be costly in "rapidly evolving technology markets". Hallas cited the review in his letter.

"The CMA now risks making the very mistake that the review identified - killing British companies with lengthy investigations whilst global digital markets move on around them," he wrote.

IT Pro put this to the CMA and was directed to a speech made on Tuesday at a Digital Markets event. The organisation's chair, Lord Andrew Tyrie, said that the digital revolution had "released many small firms from the confines of their local markets" and caused global disruption.

"It has greatly disrupted many markets and business models - broadcast media, taxis, food delivery and very much more besides. Almost all of this has been for the better - we like disruptors," Tyrie said.

"But, there's probably been underenforcement of merger control in digital markets. And because of the nature of these markets, this can be particularly costly for consumers. Increasingly, competition authorities are now waking up to this."

Bobby Hellard

Bobby Hellard is ITPro's Reviews Editor and has worked on CloudPro and ChannelPro since 2018. In his time at ITPro, Bobby has covered stories for all the major technology companies, such as Apple, Microsoft, Amazon and Facebook, and regularly attends industry-leading events such as AWS Re:Invent and Google Cloud Next.

Bobby mainly covers hardware reviews, but you will also recognize him as the face of many of our video reviews of laptops and smartphones.