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

But Competition and Markets Authority claims "underenforcement of merger control in digital markets" can cost consumers

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 Takeaway.com 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."

Featured Resources

Navigating the new normal: A fast guide to remote working

A smooth transition will support operations for years to come

Download now

Leading the data race

The trends driving the future of data science

Download now

How to create 1:1 customer experiences at scale

Meet the technology capable of delivering the personalisation your customers crave

Download now

How to achieve daily SAP releases

Accelerate the pace of SAP change to support your digital strategy

Download now

Recommended

UK tech startups to watch in 2021
startups

UK tech startups to watch in 2021

11 Sep 2020
The IT Pro Podcast: COVID-proofing your startup
startups

The IT Pro Podcast: COVID-proofing your startup

10 Jul 2020
US Rep. Bill Johnson introduces the Advancing Tech Startups Act
Policy & legislation

US Rep. Bill Johnson introduces the Advancing Tech Startups Act

22 May 2020

Most Popular

Windows XP source code allegedly leaked online
Microsoft Windows

Windows XP source code allegedly leaked online

25 Sep 2020
16 ways to speed up your laptop
Laptops

16 ways to speed up your laptop

16 Sep 2020
16 ways to speed up your laptop
Laptops

16 ways to speed up your laptop

16 Sep 2020