Concerns have been raised by tech businesses, consumer advocacy organizations, and public figures about the recent selection of Doug Gurr, a former Amazon UK CEO, as chair of the Competition and Markets Authority (CMA). They contend that this appointment jeopardizes the CMA’s independence and its ability to hold giant tech corporations accountable.
Chancellor Rachel Reeves has received a letter signed by a number of well-known groups, including the Future of Technology Institute, the consumer advocacy group Which?, Mozilla (the company that makes Firefox), and the News Media Association. The ramifications of Doug Gurr’s selection as the CMA’s interim chair are questioned in the letter.
Gurr’s hiring comes after he managed the UK business for four of his nine years at Amazon. In 2020, Gurr left Amazon to take a position as director of the Natural History Museum before joining the CMA. The organizations that wrote the letter are especially concerned that the CMA’s credibility may be jeopardized in light of the recent removal of former chair Marcus Bokkerink and the appointment of Gurr to take his place.
What Issues Do Those Against Gurr's Appointment Have?
These organizations’ letter conveys their concern about the possible weakening of the CMA’s autonomy under Gurr’s direction. The letter states, “We are concerned that the UK government is losing sight of its commitment to robust competition enforcement of the digital markets unit (DMU) regime and the CMA’s operational independence following the removal of the CMA chair and his replacement with a former Amazon executive.”
The DMU, which was established by the CMA under new law from the previous government, has the authority to strictly oversee large tech firms that are deemed to have “strategic market status,” like Amazon, Apple, Google, and Microsoft. Fairer competition is the regime’s main goal, especially in the digital sectors.
Is the CMA Overly Affected by Tech Giants?
The letter also raises questions about the CMA’s capacity to fend off lobbying from influential IT firms. The necessity of preserving the CMA’s independence from such lobbying is emphasized by signatories, which include prominent specialists such as professors Derek McCauley and Philip Marsden, who were members of a group looking into the market dominance of US tech firms.
According to a recent assessment by Jason Furman, the former senior economic adviser to Barack Obama, the dominance of these internet titans has limited consumer choice and hampered innovation. To solve these problems, it suggested creating a section dedicated to digital marketplaces.
Additionally, the signatories contend that the Labour party has always advocated for taking firm measures to combat monopolization in the UK’s technology industry. In order to oppose big tech lobbying and protect consumers, the letter maintains that the CMA must continue to operate independently.
How Will Gurr Handle Possible Conflicts of Interest?
Justin Madders, the business minister, was forced to refute claims that the government was “in the pocket of big tech” after Gurr was appointed. Following Gurr’s new position and his affiliation with Amazon, these allegations came to light.
In response, Gurr said he wants to make CMA merger and acquisition investigations “simple and rapid.” He went on to say that under his direction, the CMA’s new “north star” would be a regulatory framework that encourages corporate investment.
But Gurr is already in a precarious position. The dominance of Amazon and Microsoft in the cloud computing sector may be driving up prices for British companies by up to £430 million a year, according to the CMA’s independent inquiry group. The organization has suggested that the CMA look into whether these two businesses could be given “strategic market status” in the cloud services industry using its newfound digital authority.
In order to resolve the market distortions, the CMA could need to implement new rules or take other actions if such a designation is made. Given his experience with Amazon, it’s unclear if Gurr will have to abstain from decisions pertaining to Amazon’s possible strategic position in the cloud market.
The matter nonetheless calls into doubt Gurr’s nomination as CMA head and his capacity to lead the competition watchdog objectively, even if the CMA has not yet responded to this possible conflict of interest.
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