Committee concerns focus on significant
potential conflicts of interest and on challenge to
Ministers in investment
decisions that deliver market
consolidation over improved consumer
welfare
After extensive questioning in a pre-appointment hearing
in Parliament on Tuesday, the House of Commons
Business and Trade
Committee today reports it is satisfied that Mr Doug
Gurr “has the professional competence and independence required
to be appointable by the Secretary of State to the position of
Chair of the CMA, as the role has been defined.”
But the Committee warns that it is “not the hallmark of a robust
recruitment process” to have secured only one
appointable candidate to lead the growth-critical
regulator.
At the top of the pre-appointment
hearing (transcript) the Committee set
out its seven areas
of major concern:
- Over the last 10 years the CMA
has almost doubled staff numbers yet the
competitive dynamics of the UK economy have deteriorated, not got
stronger.
- The will and ability of the Chair to stand up to
Ministers, given the previous Chair was
effectively removed: particularly,
whether investment will be prioritised even if it
delivers market consolidation rather than improving consumer
welfare.
- The CMA has proved quite slow to launch market
investigations despite a spiralling cost-of-living crisis
and the Committee's view is that enforcement action has
been quite weak.
- Potential conflicts of interest after Mr
Gurr's long and senior career at “one of the world's largest
oligopolies Amazon”.
- Time management, with the role only requiring a
commitment of two days a week.
- The use of the new powers available to the CMA, with
the delay seeking remedies from Google on its
relationship with news producers and the “nonbinding,
frankly legally meaningless commitments” required
of Google and Apple on their mobile ecosystems.
- After a budgeting error required a 10% staff
reduction, staff surveys show that only around a quarter of
people want to stay working for the CMA for the next three
years.
The Committee concludes that the hearing, as well
as its wider work on competition
policy, raised areas of concern that require
ministers to implement a series of risk mitigation
measures:
1) The Government's strategic steer to the
CMA must underline that the pursuit of
growth cannot risk market concentration that
diminishes levels of competition
or increases already high
levels of damage to
UK consumers;
2) Ministers must make clear the need for operational
independence of the CMA in case decisions, and
3) That they expect rigorous implementation of the powers
available in the Digital Markets, Competition and Consumers Act
2024 to better promote competition and protect
consumers;
4) Ministers should reconsider whether a
maximum two days a week is the right time commitment
required of the CMA Chair, and whether further time should be
made available to allow time for crisis management;
and
5) Consider requiring Mr Gurr to recuse himself from any decision
about designating Amazon with Strategic Market
Status.
Rt Hon MP, Chair of the Committee,
said: “The CMA sits at the heart of whether markets
work for consumers - or against them.
“Mr Gurr has the professional competence to be appointable.
But given the concerns we explored - from conflicts of interest
to the regulator's recent performance - we think there are steps
ministers must now take to maximise confidence in this
appointment.
“Growth cannot mean greater concentration. Investment cannot
come at the expense of consumer welfare. And operational
independence must be protected in fact, not just in theory.
“If the CMA is to rebuild trust, it must use its new powers
rigorously, stand up to pressure where necessary, and put
competition and consumers first - every time.”/ENDS
Notes:
The full report is linked above and can be found
here
