Tyrie steps down as CMA chief after two years in post

Andrew Tyrie has resigned from the chairman of Competition and Markets Authority (CMA), hinting at his dissatisfaction with the limits of the regulator to combat market dominance of digital giants such as Facebook and Google.

Lord Tyrie, a former Conservative MP and chairman of the Treasury Select Committee from 2010 to 2017, said that he was standing down from the UK’s competition watchdog three years before his term was due to finish in order to make the case “more forcefully” for a crackdown on market abuse by multi-national companies in favour of consumer rights.

Tyrie, who has held the role for two years, will step down in September this year.

In a statement, he said he was leaving to “make the case more forcefully for legislative and other reform - in parliament and beyond - than is possible within the inherent limits of my position as CMA chairman".

In a letter sent in February 2019 to the Department of Business, Energy and Industrial Strategy, Tyrie made the case for wide-ranging reform of the powers of the CMA and argued for tougher powers to fine and reprimand incumbents that sought to inhibit competition. He highlighted the need to update legislation to focus on digital giants in particular.

“The central challenge is that, despite relatively recent legislative changes, the UK has an analogue system of competition and consumer law in a digital age,” the letter read.

“The ability of the CMA to act quickly to prevent harm to consumers in fast-moving markets is impeded by a complex web of interacting pieces of legislation that have accumulated on the statute book over many decades. It is impenetrable to nonspecialists. It also lacks a clear and unifying purpose. “

In an interim review into digital advertising published in December last year, the CMA suggested that digital platforms such as Google and Facebook had been able to use the data collected on individual users to generate digital advertising revenue of more than £13 billion.

In 2018, Google accounted for more than 90 per cent of all revenues earned from search advertising in the UK, with revenues of around £6 billion, while Facebook took around half of the total share of display advertising revenues, reaching more than £2 billion.

The report stated: “Whilst the services these firms provide appear to be free, consumers pay for them indirectly through providing their attention and personal data, which platforms use to sell digital advertising.”

It warned that a lack of real competition to Google and Facebook could mean people are already missing out on the next great new idea from a potential rival. "It could also be resulting in a lack of proper choice for consumers and higher prices for advertisers that can mean cost rises for goods and services such as flights, electronics and insurance bought online.”

The report also raised concerns over the amount of personal data social media platforms were able to gather, and the level of control individuals now have over their own information, concluding at the interim stage that there was a “strong argument” for the development of a new regulatory regime.

“The most likely outcome at the end of this study will be recommendations to the new government as it decides whether and how to regulate the digital sector," it concluded. "On the other hand, the CMA stands ready to act directly through any or all of its own powers if, ultimately, these issues are not addressed in other ways, whether domestically or internationally."

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