The UK’s competition regulator is setting up a “behavioral hub” as it seeks to strengthen its credentials as a consumer champion.
The Competition and Markets Authority (CMA) announced on Tuesday, February 25, the establishment of a unit that will draw on economics, data, and behavioral science to boost the watchdog’s understanding of consumer issues.
Andrea Coscelli, CMA chief executive, said the move was part of the watchdog’s desire to beef up its role in punishing companies that rip off consumers and move away from its old technocratic image.
“If we want to keep our legitimacy and licence to operate, it is very important that we are perceived not as a technocratic and insular institution but as [an agency] who is involved in markets, understands what consumers are going through and fights for them,” he told the Financial Times ahead of a speech in London on Tuesday.
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Last year Andrew Tyrie, the CMA’s chair, demanded new powers to strengthen the watchdog’s consumer-protection credentials to punish companies that rip off customers.
Mr Coscelli said he was “cautiously optimistic” that the government would come forward with legislation to allow it to carry out faster enforcement action, levy fines without getting bogged down in the courts and disqualify company directors. He said the benchmark for financial punishment would be the UK’s competition regime, which allows for levies of up to 10% of turnover.
He said the new unit would help the CMA better “understand what consumers are going through” to retain its legitimacy in the eyes of the public. The move would build on the decision to establish a data unit in 2018 to help it flush out issues thrown up by big tech companies such as fake online reviews and algorithms affecting online shopping.
Mr Coscelli said the CMA would also be sending its staff to Citizens Advice call centers to “hear directly from consumers with specific problems” later in the year.