Jeff Lynn, the co-founder of crowdfunding platform Seedrs, has accused the Competition and Markets Authority (CMA) of being “narrow minded” and “old fashioned” after the regulator blocked a planned merger between Seedrs and Crowdcube earlier this year.
Speaking to the Financial Times, Lynn said that the CMA had taken an “old fashioned and academic view of competition law that fails to recognise the realities of how innovative sectors work”.
He added that there is a “real divide between the political impetus to see us build some great businesses in this country and a much more narrow-minded perspective from the CMA”.
Read more: Seedrs surpasses £1bn in total investments
Last month, the CMA said that it may block the proposed merger after an investigation found that it would reduce competition and innovation in the market. According to the CMA, Seedrs and Crowdcube controlled between 90 and 100 per cent of the UK’s equity crowdfunding market between them.
However, Lynn warned that by blocking the deal the competition watchdog was stifling growth and innovation in the UK’s tech sector.
“It’s a little bit absurd to strangle almost at birth a business just because it could someday get half platform power,” added Lunn. “[The deal] was about building businesses that can be competitive on the international stage to compete across multiple markets.”
The CMA has taken a tougher stance on consolidation in the tech sector, and launched antitrust cases against both Apple and Google earlier this year.
Between April 2020 and January 2021, the CMA referred eight in ten deals for investigation – up from four in ten during the previous financial year.