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Competition and Markets Authority puts focus on tech with new team

The UK's Competition and Markets Authority (CMA) is planning to build its expertise in technology and data, hiring a team of experts to handle a growing number of cases, including a new chief data and technology insights officer.14 Nov 2017

Speaking to the Financial Times (subscription required), chief executive Andrea Coscelli said the CMA would shortly advertise for the position. Other team members would include data scientists, computer experts and economists, said Coscelli.

The news comes after a rise in investigations involving technology and ahead of the UK's withdrawal from the EU.

Competition law expert Alan Davis of Pinsent Masons, the law firm behind Out-Law.com, said the CMA and other competition authorities were seeking to catch up with developments in the use of technology.

“There is a major focus by the leading competition authorities around the world on the perceived use of algorithms, artificial intelligence and data by companies to facilitate breaches of competition law,” Davis said. “There is a sense that the competition authorities are lagging behind technological developments that may make it easier for businesses that are breaching competition law to avoid detection.”

Davis said it would become more challenging for the CMA to prove that competition law had been breached in cases involving sophisticated use of technology.

“These advances in technology give rise to new competition concerns that mirror the traditional ‘hub and spoke’ price fixing arrangements we have seen in the retail sector," Davis said. "Essentially, there is evidence that these software tools could be programmed so as to implement a pre-agreed arrangement to fix prices whilst avoiding direct contact between competitors.”

“On the other hand, the unilateral use of price monitoring and automatic repricing tools is also widely prevalent. The key challenge that the CMA will have is to show evidence of an agreement or understanding between competitors with regard to the use of the tools. But there is also a risk that the genuinely unilateral use by certain businesses of those tools could lead to false suspicions or allegations that they have breached competition law,” Davis said.

The CMA has made a series of announcements relating to technology, online selling and the use of data in recent months. In September it published a report into the use of price comparison websites and digital comparison tools, and in August it fined a company for banning UK retailers from selling golf clubs online.

Davis said the CMA and its peers in other countries were also worried about the future competition implications of big data, “specifically the ability of data-rich companies to abuse their dominance through creating market foreclosure, strengthening barriers to entry and exploiting consumers, for example, through personalised pricing and geo-blocking”.

He said the shift of some responsibilities to the CMA from the European Commission after Brexit would be difficult for the authority.

“The CMA needs to prepare itself to take on the UK aspects of the ongoing and future EU investigations involving the digital giants post-Brexit," Davis said. "Even with enhanced digital forensic capabilities, the resourcing of these cases will present a huge challenge to the CMA.”  

“The CMA is not starting from scratch on these issues – they have already undertaken a number of cases that deal with some of these concerns in the competition and consumer protection space. They are also well used to employing digital forensic tools to analyse large amounts of data obtained during investigations, including dawn raids, which helps them to find the 'smoking gun' evidence to show that a cartel existed or evidence of anti-competitive intent in mergers,” Davis said.