City Comment: The new broom at the CMA should go for it
WARM welcome to Sarah Cardell, who starts as interim CEO at the Competition and Markets Authority today.
What should be top of her inbox, but almost certainly isn’t, is a proper crackdown on our big tech lords.
As General Counsel, Cardell did launch a probe into Amazon earlier this month, looking at if the way it treats other retailers on Amazon Marketplace is anti-competitive. (Almost certainly, I’d say).
We want more of the same, wider and bigger.
Chris Philp, who was Minister for Tech until the other day, recently gave a speech calling for “lighter touch regulation” of technology, to make Britain’s regulatory regime “a source of national competitive advantage”.
Ministers always think that less regulation equals more business, but it equally often favors the big established companies with all the lawyers over the start-ups we imagine we are helping.
Far better would be to empower Cardell to clamp down on the big boys wherever she can, even if only as a gesture. They plainly won’t stop otherwise.
No longer content to own search and its advertising billions, Google is expanding into retail, education and enterprise. Amazon has parked its tanks on Netflix’s lawn. Apple is now a payment service provider and Microsoft is a behemoth in cloud computing and gaming. The mighty are getting ever mightier, squeezing the life out of anything they pass.
Despite recent headwinds, Facebook still commands the attention of over three billion users. Microsoft has 1.4 billion active devices running Windows 10 or 11. This wealth and reach provides the tech giants with an insurmountable advantage over any start-up. As Facebook has demonstrated time and again, promising technology can be usurped, either via acquisition or by copying their tech.
The power of these giants is difficult for any upstart to overcome. And when they start offering ‘free’ services (or adopt predatory pricing strategies) in a competitor’s space (eg free Apple TV with the purchase of a device) it’s game over for the plucky newcomer.
The battle amongst streaming services is one thing. What happens when the battle turns to a serious issue like cybersecurity? Microsoft’s security business is growing faster than any of its other services. Moreover, they’ve committed to spending a further $20 billion over the coming years. How is that competitive, and what happens if Microsoft falls victim to hackers from China, Iran, or North Korea?
Cardell should go for it.
Credit: www.standard.co.uk /