Competition Markets Authority
Original script, may differ from delivered version
Introduction
Good afternoon, thank you very much for inviting me to share some perspectives about consumers, competition and AI.
Im Marcus Bokkerink, Chair of the Competition and Markets Authority. We are the UKs principal competition and consumer protection authority, an independent body responsible to Parliament. We exist to help people, businesses, and the UK economy by promoting competition and tackling unfair behaviour. That means its our job to make sure that people can be confident theyre getting great choices and fair deals and without being misled; and to make sure that competitive, fair-dealing businesses are free to innovate and thrive.
I think its helpful to first remind ourselves why those 2 sides of the same coin effective competition and protecting consumers from commercial harm are so important. I will then talk about what fostering competition and protecting consumers, means in practice in a digital economy. And last, I will talk about what we at the CMA believe fostering competition and protecting consumers requires in a world where AI starts to underpin more and more of that economy.
And I say economy, because our remit is focused squarely on enabling competition and protecting consumers from commercial harm; while online safety, which includes illegal content, cyberbullying and harmful speech, are protected by Ofcom, who we work with very closely, not least through the Digital Regulation Cooperation Forum. We were the first country in the world to create a joined-up group like the DRCF, which also includes the ICO and FCA, and its one of the benefits to the way we approach digital regulation here. I hope youll all be here tomorrow for our DRCF panel event.
So first, a recap of why Competition and Consumer Protection matter
Over 30 years working with diverse businesses of all shapes and sizes, Ive seen repeatedly how the 2 elements of vibrant competition and effective protection of consumers interests, go hand-in-hand. In open markets where competition thrives and companies play by the rules, the players in a market - be it supermarkets, food brands, vets, social media platforms, search engines, or companies who help us buy and sell goods online many of which are CMA areas of work by the way - if those markets are open with multiple players competing, those players have the incentive to do exactly that: to compete hard and innovate hard to bring us the best choices, the best quality, the best service, the best prices. And above all they compete for our trust and loyalty.
But, where a dominant few corner the market and engage in unfair, harmful practices, the opposite happens innovators and fair-dealing challenger businesses are stopped in their tracks, and we end up down a road of limited choice, deteriorating quality and service, and ever rising prices.
Thats why, to deliver good outcomes for the people and the innovating businesses we serve, the CMA is determined to protect both sides of this coin. Tackling misleading practices and unfair behaviour, the symptom if you like, through enforcing consumer protection and competition law. And, fostering the conditions for healthy, dynamic competitive markets to be able to flourish tackling the root cause.
Now let me move to the broader context of digital opportunities and risks - and how the CMA is taking action
AI is part of a broader force that has been shaping our economy and society over the past 2 decades - the ever-accelerating technology revolution and the multitude of new, often disruptive business models this brings, which are transforming how we live, work, and do business. Theres no doubt the digital revolution brings enormous benefits: so much of the worlds information and creativity, now instantly available. New, more effective and efficient ways to learn, research, create, communicate, innovate, buy, sell, do business with each other. All potentially turbocharged by AI.
To ensure these opportunities really do come to pass, really do benefit consumers, innovators and fair-dealing businesses, and ensure these benefits are not eroded over time, the CMA, has been consciously and explicitly adapting how we protect competition and protect consumers in this new digital reality, like our fellow authorities around the world.
What are we doing to protect consumers in digital markets?
Let me start with protecting consumers, and indeed businesses as customers, from unfair behaviour. Our work here includes, for example, cracking down on fake reviews, which influence hundreds of millions of pounds worth of purchases every year; and so-called dark patterns, which are intentionally deceptive or manipulative design choices that are forced on us when we search, shop or interact online. These design features of online architecture can be very subtle, steering us toward pre-defined outcomes. Features like pressure selling and drip pricing. Exaggerating the benefits of sharing personal data. Intrusive default settings and misleading opt-outs. Being trapped by ever-repeating subscriptions or hidden advertising. These are all design choices which exploit our psychology and vulnerabilities as online consumers, nudging us toward decisions that arent fully our own and arent necessarily in our best interests.
And the costs are significant. [1] Misleading or deceptive online practices are causing billions in net detriment across the economy; billions spent on things we didnt want, didnt need, or regretted buying; [2] with millions of hours wasted communally trying to fix these problems [3]. And while these numbers are bad, they represent not just frustration, but heartbreaking stories of financial loss and personal distress.
Thats why one of the priorities we set out in our new CMA strategy earlier this year, is a continuous programme of enforcement action and education to protect consumers from fake reviews, pressure selling, and misleading online choice architecture, across all online retail sectors. This includes, for example, 2 open enforcement investigations into pressure selling, multiple published guides to businesses about what is and is not acceptable conduct, and of course, our Online Rip-Off Tip-Off campaign to raise consumer awareness and encourage people to tell the CMA about potentially misleading online sales practices. Given the potential for AI to turbo charge these very same harms, it is all the more important to tackle them early on by both enforcing, and strengthening, our consumer protection laws, which I will return to later.
What are we doing to protect competition in digital markets?
Let me now turn to actions we are taking to tackle the root cause of some of these harms by ensuring dynamic competition in digital markets. Because its much easier for perpetrators to engage in harmful activity where there are few if any alternatives for a consumer or business customer to choose from, when, for example, they are looking to search or design or buy or sell or socialise online all markets where AI will play a major role in the future. In situations of limited choice, the often very large, very powerful companies responsible for the harmful design choices in the first place become more dominant and more entrenched, and their behaviour becomes the standard. New entrants and challengers who might offer more transparent, open, or competitive alternatives are squeezed out or never get off the ground. And without competition from challengers, theres little motivation for players with entrenched market power to do the right thing for consumers and clean all of this up.
Thats why we have been and will continue to be vigilant in protecting competition in digital markets. Recent and ongoing examples of the CMAs actions include a series of competition law probes into online platforms and digital advertising, which highlighted the limits on competition in search, social media and digital advertising. We, the European Commission and the US Department of Justice, all have cases underway to investigate these issues. [4] Were also investigating the terms and conditions that govern developers access to the Apple App Store[5], and whether Amazon uses data collected from the sellers on its marketplace to unfairly benefit its retail arm. And were also working with Google to ensure changes to its privacy policy dont unfairly advantage its advertising business.
In addition, because of the rapid speed at which these digital and AI-powered markets develop, we take a forward-looking approach to preventing competition concerns from developing in the first place, through effective merger control. Our recent decision on Microsofts acquisition of Activision Blizzard, for example, resulted in Microsoft divesting the online cloud streaming rights to Activisions games, for the next 15 years, to a rival, to ensure this fast-growing cloud-gaming market remains open to competition and consumer choice.[6]
All our work is independent, deeply researched and objective. All our actions are similarly independent, proportionate, and evidence-based. And its all geared to getting the best outcomes for people, businesses and the UK economy.