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Competition Watchdog Creates A Monopoly

Posted on 12th May 2017

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What a great job by the UK's competition watchdog (the Competition and Markets Authority, or CMA), as reported by this BBC news article!

There are only two companies still in the business of providing pager services in the UK: Vodafone and Capita. Pagers are still used by hospital staff, and are therefore considered essential. Pagers are not making much money, because of the small market, so Vodafone wanted to sell their pager business to Capita.

The CMA objected to the sale of Vodafone's pager business to Capita, because it would have created a monopoly, and blocked the sale. The result of their intervention: Vodafone have decided to close down their pager business, thus creating a monopoly anyway. The only impact of the CMA's intervention is that Vodafone has been prevented from making any money from the closing down of the pager operation.

One has to wonder why the CMA continues to exist, given what poor service they deliver. I think I know why the CMA is so bad at their job, though: they are a monopoly!