Antitrust and Market Liberalization in the UK Since BrexitFOR THE LAST TWO YEARS, A BOCCONI ALUMNUS WITH DUAL CITIZENSHIP, ANDREA COSCELLI, HAS BEEN THE CEO OF THE BRITISH COMPETITION AND MARKETS AUTHORITY
There are those who dreamt of becoming rock stars during their university years and those who, with the same enthusiasm, had dreams of being in charge of the regulation of markets and competition one day. Among the latter, there is certainly Andrea Coscelli, a Bocconi graduate who since July 2016 has filled the position of CEO of the Competition and Markets Authority (CMA), the UK antitrust authority. In an era of deregulation, better regulation and smart regulation, here is how Coscelli addresses the hottest issues of current affairs involving Britain and Europe, from Brexit to digital disruption.
➜ What kind of challenges does the digital revolution pose?
It is a very lively and fast-evolving debate, which clearly has international fallout. The role of the Competition and Markets Authority is to maintain a balance between regulation and competition, hence between consumer protection and protection of market competition. We have undertaken, for example, a series of interventions in online markets such as car rentals, travel reservations, and gambling because, in our view, their ranking mechanisms are not always correct and transparent vis-à-vis consumers. There are also more complex antitrust interventions, such as the one conducted by the European Commission against Google Shopping, because the issue of online competition also concerns the sphere of innovation: platforms continue to evolve, adding ever new services for consumers, but this factor should not compromise the opportunities for small businesses that have smaller means compared to the big e-commerce players and whose business depends, in some cases, almost exclusively on the Internet.
➜ The struggle against monopolies began over a hundred years ago. What has changed since then?
Originally, in the United States, the debate focused on the railway monopoly and the oil monopoly; today the principles are the same, but not the scope of application because a significant portion of revenues now comes from online activities. In fact, today it has become common to say that data is the new oil.
➜ What is the cultural difference between the United Kingdom and Italy in terms of market liberalization?
Great Britain has always had a great interest in the market as a mechanism for allocating resources: past governments supported and stimulated privatization initiatives, much more than in Italy and other EU countries. With Brexit, the political environment has changed and now the idea is that all this propensity to deregulate has not always generated better conditions for consumers. In particular, public opinion is currently questioning the privatization of water, energy, and railway industries.
➜ Is Her Majesty's government backtracking?
Not necessarily. This is not an ideological debate, it is more an issue of pragmatism: we wonder what has worked and what hasn’t, learning from the experience of the last twenty years; there are market areas in which perhaps we can think of applying a less drastic model of liberalization, because the current approach has not been particularly effective. More generally, there is no perfect formula: in some countries, in fact, certain industries have remained government-owned and worked well, in others, they were privatized and have worked just as well. The variables are many and they are not only cultural.
➜London is the European hub for venture capital, and often these funds are owned by foreigners..
In the area of artificial intelligence, space industry and fintech, the British government continues to implement smart regulation to attract new investors, as this is the best way to create growth and jobs in the economy. Innovative start-ups continue to be viewed positively and are provided with incentives in spite of Brexit. According to some observers, however, the outcome of the referendum, having slowed immigration, is having a negative impact on the birth and expansion of new firms.
➜ At CMA, how do you address Brexit? Is antitrust cooperation with EU countries in the charts, based on the US-Canada model?
Yes, absolutely. I spend a lot of time talking with the heads of antitrust authorities of other countries, like Italy’s Giovanni Pitruzzella or the heads of the Antitrust division at the US Department of Justice, or the French and German competition authorities. We often cooperate, because markets are international and the issues are more or less the same. In addition, we are part of two important organizations, the International Competition Network and the OECD, which are independent of our dealings with the European Union. Then there is also a very important network within the European Union, the European Competition Network. After the Leave vote, and on the basis of the outcome of negotiations with the EU, we will understand which role we will have in it. At any rate, with Brexit, cooperation is even more important.
➜ Two years have passed since your appointment. Give us your reflections and perspectives.
The most demanding challenges have been prompted by Brexit: it is very likely that we will find ourselves dealing with major international cases in parallel with the EU, and to do so we need to expand our structure. We started this process by opening a large new office in Scotland, we have strengthened our Belfast and Cardiff offices, and we are considering opening an additional one in Manchester. The goal is to be more territorially distributed, so as to establish relationships with local lawyers and economists, who know closely the specific problems of each region of the country. In this organizational expansion, we are also establishing strong relationships with universities throughout the United Kingdom.
➜ This move seems to be an answer to the demands expressed by the Brexit vote..
In a sense, it is so. The referendum results made clear to everyone that while London had become a capital of Europe, or perhaps even the global capital, there was a strong disconnection with the rest of the British social fabric. Today, the government is implementing a program to decentralize government administrations and agencies, and this also involves us.
➜ Besides an Italian passport, you also have British citizenship..
Yes, even though the CMA is a very open environment: 15% of the people who work with me are not British nationals.
➜ How is the working climate within the UK antitrust authority?
Relationships are simple and direct. I can count on an excellent board and I have developed a deep relationship of mutual exchange with certain senior members. I also often discuss with young people: in the UK, the open debate approach is encouraged, and this stimulates junior figures to actively participate in debates. Their contribution is extremely useful when we have to deal with issues that involve new generations of consumers. In my role, I have to take difficult decisions that affect people's lives, but I have the advantage of being part of a healthy institution that has a strong tradition of independence and professional competence.
➜ And when you are not taking decisions, what do you do?
I turn off my electronic devices and dedicate myself to sports or books. Right now, I'm reading My Name is Lucy Barton by Elizabeth Strout.
by Ilaria De Bartolomeis
Translated by Alex Foti