Lord Andrew Tyrie hasn’t written his memoirs yet. If and when he does, he might want to consider borrowing the title: How to Lose Friends and Alienate People.
Because in his role as chair of the Competition and Markets Authority (CMA), that is exactly what he is doing.
The UK’s competition watchdog has already made a few high-profile enemies across the retail sector, in particular since Lord Tyrie assumed his position in June 2018.
Its decision to block Sainsbury’s merger with Asda last year, followed by the frankly laughable conclusion last month that JD Sports’ acquisition of Footasylum – a company whose market share stands at less than 5% – would see shoppers lose out “through fewer discounts and less choice in stores and online”, have left plenty in the industry questioning the authority’s methods and motives.
“A bid to better understand markets is all part of Lord Tyrie’s grand plan to ‘get tougher’ on enforcement”
An event held by the Policy Exchange thinktank in London last week served to shed a little more light on the matter. Put simply, the CMA is on a power trip.
Tyrie and CMA chief executive Andrea Coscelli said the CMA wants to better understand certain markets – a statement that will offer little comfort to Sainsbury’s boss Mike Coupe and JD Sports supremo Peter Cowgill, who have both have lambasted the group for its “complete misunderstanding” of their respective sectors in the recent past.
Even this message from the CMA came with something of a caveat. A bid to better understand markets is all part of Lord Tyrie’s grand plan to “get tougher” on enforcement and become a more prominent and recognised force in the eyes of consumers.
“Most of the public won’t have even heard of the CMA, but in my opinion that is a weakness, not a strength,” Tyrie said.
He suggested the digital economy has left shoppers “much more vulnerable to getting bad deals and poor service online” and said: “We’ve got problems there.”
Tyrie wants to address those perceived problems and insisted that “doing nothing really isn’t an option”. As a result, he wants “new statutory duties to be imposed on the CMA” by the government that will allow it to “act swiftly when things go wrong”. But he cautioned that it “will need the powers to back up these duties”.
That was the overriding message he wanted the audience of parliamentary aides, representatives of the House of Lords and journalists to take away with them.
At one point during Tyrie and Coscelli’s back-to-back addresses, I spotted another unimpressed audience member messaging a colleague with their verdict on what they were hearing. “The s*** they are coming out with is worrying,” it read. I wish I could disagree.
“The CMA leadership must set aside their egos and global ambitions for the good of British markets and consumers”
It was worrying because Tyrie and Coscelli admitted they did not have a deep enough understanding of certain markets – markets they have made big calls on during the past year or are in the process of investigating. You need to look no further than its interventions into Amazon’s minority investment in Deliveroo, or the merger of online food delivery service JustEat and its Dutch counterpart Takeaway.com.
It was worrying because the duo placed huge emphasis on their desire to be “more visible and more vocal [and] affect change through speaking up publicly as well as through enforcement” in order to boost the CMA’s public profile.
It was worrying because the consumer – the group that the CMA apparently exists to protect – played second fiddle to its plans for world domination.
Knowledge is power
That, sadly, is no exaggeration. CMA non-executive and former commissioner of the US Federal Trade Commission, Professor William Kovacic, suggested, in a world where Americans feel they have been failed by antitrust authorities, there is scope for the CMA to become a “global leader” in the competition policymaking process.
These ambitions should concern retailers – or any business in any sector currently contemplating M&A activity.
The CMA wants to show its teeth, it wants to become a more prominent body in the public eye and it wants to be seen as a regulator that is standing up for British consumers.
- Read more: Is the CMA killing retail?
First and foremost, it needs to focus on properly doing the latter. Boosting ‘brand CMA’ on these shores or beyond won’t help it achieve that.
Instead, Tyrie and Coscelli must wake up to the fact that knowledge can become the real source of its power. They must initiate conversations with chief executives and analysts to help them better understand the retail market, its challenges and ongoing evolution.
They must embrace the idea of gaining first-hand perspectives from these genuine experts, which will allow it to make better, more informed decisions on behalf of customers.
Ultimately, they must set aside their egos and global ambitions for the good of British markets and consumers. The future of businesses could depend on it.