The Competition and Markets Authority has reiterated controversial remarks about the government’s proposed privatisation of the Land Registry.
Last month it surprised some by saying that a proposal to privatise the Registry may lead to more monopolistic activities, not fewer.
In a letter to BIS, the CMA wrote that a private Land Registry may reduce public access to its 'monopoly data' in order to weaken competition against its own commercial products. "While these risks are not unique to privately-owned monopolies, our view is that they may be sharpened by the introduction of a profit motive" said the CMA at the time.
Now the authority has returned to the subject in the shape of a blog on its website written by its assistant director for advocacy, Elliott Scanlon, who warns that history shows that regulation may not be sufficient if the structure of a privatisation works against consumer interests.
“Our recent evaluation report into BAA airports showed that allowing common ownership of Heathrow, Gatwick and Stansted as part of the BAA privatisation prevented these airports from competing with each other – and prevented the full benefits of privatisation from reaching consumers. According to independent estimates, the eventual break-up of this structure has already benefited consumers to the tune of £300m and is on track to double that by 2020” Scanlon writes.
He urges the separation of the Registry’s monopoly and commercial activities, and that this should be represented in the organisation’s future structure. The issue becomes still more important as increased digitisation of Registry data occurs.
“The business currently has both monopoly duties, such as maintaining the registers, and the ability to offer online tools and other products. Our concern is that a private monopoly needing to raise revenue could be tempted to weaken competition to its own products – for example by limiting potential competitors’ access to registry information. And the mix of activity in the business may make it a ‘black box’ that’s difficult to regulate” Scanlon warns.
“We believe that preventing monopoly and commercial activity from taking place in the same business would provide the clearest safeguard for consumers.”
The government is currently mulling over comments submitted to its formal consultation on the sale of the Land Registry. An announcement is expected in the autumn.