The former chair of the Competition and Markets Authority (CMA) has said the huge online marketplace fostered by tech companies such as Amazon, Facebook and Google means the opportunity to “rip off ordinary people” is growing and that the regulator is struggling to keep up.
In a new report, Andrew Tyrie, who quit as chair of the competition watchdog last year, argues that one of the CMA’s biggest problems is that many consumers and businesses have “never heard of it”.
This “relative invisibility” affected its power to deter uncompetitive and unfair trading and consumers were “paying the price”, he said.
“The CMA needs to be an organisation we can rely upon to protect ourselves,” he told the Guardian. “We need to know how to approach it and to see it acting on our behalf and which firms know will bear down on poor conduct and act as a deterrent.”
With so many goods and services now bought online, there was growing scope for consumers to be misled, he said.
“I have spoken a number of times about the growing sense of vulnerability felt by previously confident and capable consumers. We are all vulnerable now.”
The former Conservative MP and chair of the Treasury select committee – who gained notoriety grilling prime ministers, Bank of England officials and banking chiefs after the 2008 crash – has long complained the UK has an analogue system of competition and consumer law in a digital age.
In the report published by the Policy Institute at King’s College London and the Centre for Policy Studies thinktank, Tyrie argues that the traditional tools of competition policy are ill-equipped to deal with the fallout from the digital revolution – and the CMA needs new regulatory powers to do the job properly.
One quick win, the report says, would be for it to introduce a simple online form so consumers could alert it to rip-offs in products and services.
The CMA had previously been criticised for picking obscure targets for its investigations, but that is no longer the case.
Last week it opened a probe into Amazon and Google over concerns that they had not done enough to tackle the widespread problem of fake reviews on their websites.
In a statement, the CMA said it was “committed to delivering for consumers across the UK” and highlighted that in recent months its casework had gained “refunds for thousands of holidaymakers, secured landmark changes for leaseholders and given increased protection to people arranging funerals for loved ones”.
The spokesperson added: “We have always been clear that there is more we could do with stronger and more flexible powers and have submitted proposals to this effect to the government.”