Competition watchdog urges regulators to focus more on innovators and new players

The Competition and Markets Authority (CMA) has urged regulators to up their awareness of how their interventions might affect innovators and new entrants.

In Regulation and Competition – a review of the evidence on how “regulation affects competition in the UK business environment” – the CMA offered recommendations in three areas including “develop regulation that supports innovation and disruption.”

The CMA called on policymakers and regulators to “avoid regulation which favours incumbents or firms with specific business models, or that disproportionately harms smaller scale businesses in a sector.” It warned: “there are potentially large impacts on innovation from regulation which creates barriers to entry and from regulation which is too rigid and focused on incumbents.”

In the report's other two areas of focus the CMA called for an update of the guidance for assessing the impact of regulation and pointed out that the government’s Regulatory Impact Assessment template “does not refer to the impact on competition at all.”