The voice of UK tech startups
05.06.2023

Building Competition – A New Lens for Digital Competition Policy in the UK

Today we have launched our latest paper on competition policy – which you can read here.

When Coadec was founded in 2010, it was to support a growing ecosystem of businesses and innovators popping up around a small roundabout in Shoreditch, East London. Since that time, the tech startup community – not just in a small pocket of London but the entire country – has exploded.
The UK is now home to one of the most exciting and successful startup economies in the world. But we can’t take this success for granted.

With the macroeconomic environment for tech firms changing rapidly and the markets more hostile than they have ever been, there’s a cold wind blowing through the sector. Other changes are occurring too. During this time, tech giants like Google, Apple and Amazon have moved from being heroes of politicians seeking to learn from their allure, to villains for their perceived impact on markets and society.

In response, regulation has moved from a permissive green field to a far more restrictive approach. While the focus of Government in the 2010s was mostly on supporting tech’s growth, the 2020s risks having its focus set to be dominated by an unrelenting focus on ‘taming’ a small set of global technology firms.

Competition policy could be a powerful tool in the toolbox of the UK Government in creating the best environment possible for tech companies being built in the UK. However, there has always been significant scepticism of the role the UK’s competition regulator has played. In our previous paper from 2021, ‘The Digital Markets Unit: On the Side of Startups?’ Coadec’s research found that 60 percent of investors felt regulators had only a “basic understanding” of tech start-ups, a further 22 percent thought regulators had none at all. That’s not exactly a vote of confidence.

Since we published that paper in 2021, things have not improved. If anything, in the public discourse there’s been an increase in mistrust of the regulator – despite the progress that has been made in legislative terms from Furman Review to DMCC Bill. That’s why we’re calling for a new model for addressing competition in the UK.

By raising the minimum threshold for DMU notification to 25%, increasing the revenue threshold that triggers a CMA intervention to £25 million, and addressing outdated approaches to market definitions, the Government can ensure that high levels of competition are maintained without punishing firms for their successes.

Read the full report here. 

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