CPI TV Exclusive With CMA Chair Jonathan Scott

Below, we have provided the full transcript of the interview with Jonathan Scott, Chair of the Competition and Markets Authority (CMA), recorded on July 28, 2021.

This is part of a series of videos that CPI is producing where we will interview the heads of various NCAs all around the world.

Thank you, Chair Scott, for sharing your time for this interview with CPI.

A video of the complete interview is available HERE.

Maria COPPOLA:

Welcome. Today’s exclusive talk is with the UK Competition & Markets Authority Chair, Jonathan Scott. Jonathan, you joined the CMA as a board member in 2016, and now have chaired the CMA for almost a year. This leadership spans a time of truly seismic change, both with emerging new consensus around appropriate antitrust intervention, but very importantly for the UK, the CMA assuming powers that were once reserved for Brussels. How has it been to lead an agency during such a transformational period? I think, in some ways, I’m not sure if the CMA’s evolution has been televised. What are the key developments during your tenure?

Jonathan SCOTT:

I think the starting point is just one of immense pride in what we’ve achieved in the last 12 months. As you said, seismic. You stand back and think on what’s been done and just delivering the business-as-usual agenda, which was tough with some really big cases, would have itself be in something to tick the box and say, “Wow, that was pretty good.”

We created from nowhere in our consumer space, what we call the COVID-19 task force. We had some absolutely fantastic wins for consumers facing really very difficult conduct, particularly in the travel space and the amount that we have recovered for consumers who have been really struggling and really needed that money: that matters.

As you said, we’ve just taken for granted the repatriation of the powers and the cases, and obviously an enormous amount of planning went into that. But I suppose a couple of other things just to mention almost in passing, and I hope this reflects the fact that what we’re doing is well received, is that we have been asked to take on two new responsibilities, both with political risk, and neither of which we asked for. One is the office of the internal market, and the other is a role in subsidy control. I have to say I was very grateful we didn’t get that on Christmas Eve and then be asked to start on the 1st of January. But nevertheless, I think these are votes of confidence from government.

We’ve also continued to push our reform agenda, as you’ll have seen, and perhaps we’ll touch on this a little bit later where that has landed. Again, we’re really pleased that we’ve able to keep that moving throughout all of this. Then you could list the cases, you could list the wins in court.

If I stand right back, it’s been a fantastic year, and one which was probably somewhat unexpected, but the CMA is still a relatively young organization. It brought together the Competition Commission and the Office of Fair Trading. I think we’ve come of age in this year. It has really been a team effort. A team effort with generosity of spirit across the leaders of areas of work and real team working between the front office and the back office. So, that’s the bit that’s unsung, but I suppose if you stood right back and said, “Well, if you were going to chair the CMA for one year and one year only,” I probably couldn’t have chosen a much better year, and we haven’t even touched on digital.

COPPOLA:

That is incredibly positive view of the year to choose to lead the CMA. I’m not sure others would have your ferocious courage to do that during a global pandemic, but certainly its resilience through this time has been truly amazing. One thing that strikes me, you said the CMA is a new agency. I guess for me, this goes back to having been an observer of the Office of Fair Trading as well as the UK competition regime, but in particular, the competition agency. It stands out as a leader in many ways, but in particular for its organizational adaptability and the real commitment on behalf of the leadership, I guess probably throughout the agency to this ethos of continuous institutional improvement. How do you think that factored into the CMA’s reputation, I guess, both domestically and externally? You’ve already touched on the additional powers, so that might be one way, but are there other observations that you’d make?

SCOTT:

I think that you start from all of this, if you’re the chairman, with the quality of your senior leadership team. I am extraordinarily privileged that my senior leadership team is really outstanding. They’re not just great antitrust lawyers or antitrust economists, they’re really good human beings as well. There is a big piece here about the tone from the top. I would be failing if I didn’t acknowledge our COO, Eric Wilson, because being able to keep the show on the road is just amazing in times like this.

I think what I’m struck by is the generosity in difficult times. I haven’t had my teams fighting with one another about resources, actually people have stood back and said, “Either we can’t do that, or we’ll just have to pause this. We’ll just have to make space.” I think that makes an absolutely enormous difference.

I think also, a word that probably people wouldn’t associate with antitrust authorities, humility. I think there is humility in that we know sometimes we don’t get things right. There are occasions, and I see the care and attention that goes into these decisions at a distance, and I see also when we step away and it might be in a decision, or it might be in court. But I think that that is something about the maturity of the organization and where it’s come from that you don’t find in all organizations and all antitrust organizations. The great risk is when people are in a hole, they get out the JCB and they see if they can dig a bigger hole to get into. Whereas I have a leadership team who are very different from that, and there is just this striving to be better, striving to do things better.

I suppose that leads me to think about the work we’ve been doing in digital, where three, four years ago, I think we would have said, “We’re off the pace. We haven’t actually got the skills that we need in-house.” Setting up what we call the data unit and bringing in people with no antitrust expertise, no legal expertise, no economics expertise, but actually who really could help inform our thinking. They have formed a nucleus that we’ve built out. I think that that was the beginning of a journey.

Then if you look back from that, we moved on to work in terms of using our market study powers. Again, I think a formative piece of work, but a formative piece of work because actually we went out and got facts that people hadn’t got. People have suspicions about this and that, and how perhaps markets, particularly the ad tech space, was working, but I’m not sure that anybody really got to the bottom of it.

I think using our powers is obviously been intensely valuable for us, but there has actually been much more valuable across the piece. Again, that led to government saying to us, “Okay, well actually we see these issues. We see the challenges that people are facing. We’d like you to actually set up a unit and we’d like you to advise us on what the legislative space should look like,” and we’ve done that. That is now leading to the consultation for reform. We think that that is really, really important, but it is fact-based and it’s been important for us also, because I think it’s given us, and you’re better placed than I am to express a view on this, a sense of thought leadership. I think that that, for the UK at this particular moment, is really important.

But again, getting back to that word, humility, I think we also know this is not something any of us can do on our own. So for us, again, building that international coalition and also again, really important for us, building something which is nowhere else, I think, the working together between the regulators in the UK. So the Digital Regulation Cooperation Forum, probably given it the wrong name, which brings together the ICO, brings together the FCA, brings together the Ofcom, and brings together the CMA, I think is really groundbreaking stuff.

I think that it means that we think imaginatively and if I go back to the world I came from as a private practitioner, it perhaps makes it more difficult for the very well-resourced tech companies to play divide and rule, that great game, whether it’s between international regulators or domestic regulators. So, I think it is offensive and it is defensive and I think it really is important.

COPPOLA:

That’s great. By the way, just to underscore on the market studies work, I mean, certainly agencies around the globe are consuming all the studies coming out of the CMA. It’s really interesting to look expansively at the market, to see what might fit into a competition issue bucket and what might fit into a consumer bucket and what might need both, has been really, really important for other agencies that have dual mandates as well. So I think a lot of lessons, lot of notes being taken. You mentioned the digital-

SCOTT:

I was just going to say, Maria, just picking up on that. I think that if you and I stand back, the divide and rule between competition and IP, and trying to challenge that in terms of thinking more imaginatively around competition and privacy, I think again, really important and yes, you have to be really pleased when you’re a regulator in the UK and your work is up in front of the Senate and Congress. That a good moment for us.

COPPOLA:

That certainly is. Speaking of legislatures, you mentioned earlier a little bit, you briefly touched on the reform packages. So, I guess for the benefit of the audience, the CMA has for a number of years now, been engaging with government on necessary forms on the consumer and competition side in order to have a more robust enforcement authority. Also, as you mentioned, the digital advice. Just last week, breaking news, perfect timing for this and I’m sure that’s exactly why they did it then, but the government responded to the advice from the CMA on both the competition and consumer reforms and on the digital markets work. What are the key takeaways from the government’s response?

SCOTT:

I think first is that we are really pleased that they have come forward with it. I think my predecessor put forward proposals, it’s probably only two years ago. Since that we’ve had the EU exit and we’ve had COVID, and government legislative space is at a premium. So, we have approach this in a very pragmatic way. We haven’t been arguing publicly over the last 12 months for reform, but we’ve made the case privately.

What we’ve really thought about is what do we really need? What is nice to have, and also what can we do ourselves? But I think that from our perspective, the really important point is the timing. Now, we don’t have a guarantee that this will come forward in the next legislative session, which would begin in next year. But I think the fact that the consultation is taking place now, particularly from our perspective, the story around enhanced consumer powers, which for us has been something of a very, very real concern.

But I suppose if I stand right back from it, to me, the absolutely most important thing is the coming forward with the proposals for new legislation to regulate the digital space. There, time really is of the essence. So, I’m down on my hands and knees on this one, hoping that it will be in the next legislative session, because I think that is so very, very important. Otherwise, we will always be playing capture. Whilst we are using our powers as effectively as we can, the timing of this more than anything else is important. But certainly government has been very supportive of what we have suggested, which i a different merger regime for big tech companies, but very much also a tailored regime, which will reflect where market power actually exists and is fact-based rather than theory-based. So, we’re really pleased about that.

COPPOLA:

That’s terrific. Again, another aspect of the CMAs work that is being closely watched around the globe, the digital work. Speaking of digital, that’s obviously on everyone’s mind, it’s the hot issue. What would you say, how does CMA deal with trying to stay one step ahead? I mean, you just referred to not wanting to play catch up, how do you handle emerging issues that you see coming at you further on down, so that you’re not playing catch up? Does that factor into how the CMA thinks about things and how do they deal with it? How do you-

SCOTT:

I think it factors in in that every year we produce our annual plan and we do try and use that as an opportunity to stand back, raise our heads above the parapet, and actually think about what we think are the emerging issues. I think that on digital, I described the work that we’d done earlier. I think enormous credit to Andrea Coscelli because he, as chief executive, identified that there was a gap in our armory and that we really needed to up our game, but it’s is not the only time that we’ve done it. I’m actually also very proud of the work we’re doing at the moment in the green space, if I can put it that way, the work that we’ve been doing on greenwashing, that’s what we refer to as fake reviews on the internet that perhaps give a greater green credence to products than they actually deserve.

You would have seen, Maria, this week we came out with our report on electric vehicle charging. That is the first time that we’ve done a market study, which hasn’t really been historic and said, “Okay, well, this market is malfunctioning. What’s wrong with it? What do we need to do to put it right?” But where we’ve actually looked at a nascent market, one that is really, really critical going forward and actually looked at some of the emerging trends and tried to identify issues before they arise, before they become a problem. But I’m sure that in all of this, there’s an element of luck as opposed to judgment, and I guess we’d be asleep at the wheel if we weren’t really thinking about digital and we weren’t really thinking about the green economy. You have children, I have children, I have grandchildren. I mean, that has to be front of mind for all of us.

COPPOLA:

I think that’s absolutely right. Well, that’s great. I know that we’re getting on in time. We’ve probably run past the 10 minute mark, but I did want to ask a final question on how you see the CMA going forward. Where will it exercise its leadership? What will it be like? It’s a very dynamic agency and what are your predictions about what the CMA will look like in the medium term?

SCOTT:

I think the challenge for any regulator, well actually, for any business, is if you are performing well, and I’d like to think we are performing well and I’d like to think that that is reflected externally, is that process of continuous improvement, that process of challenge. I think for us, actually having been given these new responsibilities, we’ve got to make them work. The organization is growing, and that will create challenges for us.

I’m particularly excited though, about the fact that we are becoming less London-centric. We’ve got 50 people in Edinburgh, that is growing. We’ve got small presences in Belfast and in Cardiff. We’ve talked about subsidy control, we’ve talked about the Office of the Internal Market. We are hopeful that we will be able to have in the north of England, a number of people.

So, I think that even though that is a small part of it, I think that that will make our work more relevant to more of the people who we are there to serve. So, it’s very exciting times and whoever takes over from me will be very lucky indeed.

COPPOLA:

Well, I think the current agency is very lucky indeed, to have you now. Thank you so much for your time and I wish you a good rest of your day.

SCOTT:

Thanks very much indeed. Stay safe.