The time is now: CMA will not wait for new powers to tackle Big Tech

The CMA’s CEO, Dr Andrea Coscelli, has told the FT that the CMA intends to use its new and expanded post-Brexit jurisdiction to take a tough approach to reigning in Big Tech. 

Dr Coscelli's views are hardly a state secret: the CMA already launched an investigation into Google’s Privacy Sandbox in January, and Dr Coscelli strongly intimated a fortnight ago that the CMA would have blocked the Google / Fitbit merger (which was cleared by the European Commission on the basis of commitments given by Google about how it would use Fitbit’s data) – a refrain he repeated in yesterday's FT interview.

The CMA's ambitions are bold, and the UK is certainly one of the leading antitrust authorities globally in enforcement against Big Tech. Despite Dr Coscelli's tough words however, it seems unlikely that the CMA will have the teeth or the power to single-handedly curtail global Big Tech any time soon.

Accelerating the timetable - using current tools

The CMA has already been one of the most aggressive authorities globally in pursuing Big Tech and its laser focus on the sector is not new. What has changed however since Dr Coscelli’s last FT interview in October 2020, is the how, and the when. As I wrote about at the time, Dr Coscelli told the FT then that the CMA would give the UK Government until the end of 2021 to give it additional powers to take on Big Tech, and suggested that it would use a “combination of antitrust and market investigation references” (i.e. the CMA’s existing powers) as “Plan B” should these powers not be granted. 

Today’s interview suggests the CMA is planning to deploy “Plan B”, ahead of schedule: Dr Coscelli is clear that “until we have these new legal powers, if we want to achieve impact for consumers in the UK, we need to use our current [tools]… [and therefore] we certainly expect to open more cases during the course of this year”.

The CMA has made clear its view that its existing powers are insufficient to tackle Big Tech (for example, in its Digital Taskforce Advice), and the UK Government has committed to establishing a Digital Markets Unit (DMU) within the CMA from April this year, so why has the CMA lost its patience?

When might the DMU's powers be written into law and how broad will they be?

Put bluntly, it’s unclear when the fabled DMU will get any teeth. While the DMU has funding to “launch” in April, the legislation giving it powers is nowhere to be seen. Thus it appears the DMU will run in only shadow form pending its powers being written into law sometime later this year.

It’s also unclear if when those powers are written into law, they will include the full wish-list the CMA set out in its Digital Taskforce Advice. The UK Government has committed to giving the DMU powers to hand down and administer bespoke codes of conduct for those tech businesses which are considered to have “Strategic Market Status” (SMS). 

However, it remains unclear whether there is legislative appetite to adopt some of the CMA’s more radical proposals, in particular the creation of a new, mandatory merger control regime for SMS businesses, and broad remedial powers which would extend to the ability to order structural separation of SMS firms. 

Indeed, all the proposed reforms – which will at least initially target large US tech players – could well be a delicate topic in the context of post-Brexit trade negotiations with the US. And even if the legislative appetite exists, the ongoing Covid-19 pandemic and fall-out from Brexit are likely to be higher legislative priorities.

What's driving the CMA's agenda?

Of course the uncertainty about legislative appetite and capacity to deliver the CMA’s wish-list is not new. We can only speculate on why the CMA is no longer willing to wait. Has it lost faith that its wishes will be granted? Not necessarily. The complaint that prompted the Google Privacy Sandbox investigation was clearly framed as too urgent to wait – perhaps the CMA considers this to also be an issue in other investigations in its pipeline. 

Or perhaps the CMA just doesn’t want other authorities to have all the fun: Big Tech is top of the agenda for regulators globally, and at a time when the CMA is seeking to take up its independent role on the global stage, it may want some of its own irons in the fire.  

What will this mean for tech businesses?

Looking for gaps in the EU investigations

The EU has a number of ongoing antitrust investigations into Google, Amazon and Apple. While it is no wonder the CMA wants to take matters into its own hands, EU investigations formally commenced before the end of 2020 include the UK in their scope under the Brexit transition arrangements, and thus the CMA does not have the power to open its own parallel probes. 

Rather, Dr Coscelli said the CMA would be looking for “gaps” in the work the European Commission is doing, based on its scanning of the players and complaints it has received, and looking at what peer authorities are considering.

Looking to the US and Australia?

One possibility is that the CMA could look across the Atlantic at suits commenced by the US Department of Justice, or perhaps to other Commonwealth counties like Australia, where authorities are pursuing Big Tech on multiple fronts. But the Australian experience and the ongoing dispute over plans to make Google and Facebook pay publishers for news content, show the limits of how much a single jurisdiction can achieve. 

The need for international cooperation

While the UK no doubt wields significantly more economic and political power than its Commonwealth cousin, it is unlikely to affect fundamental changes to the global tech landscape unilaterally. Despite the CMA’s enthusiasm to exploit its newfound independence from the EU therefore, international cooperation will be more crucial than ever.