The government seemed to give a strong steer that it wanted the Competition and Markets Authority to do things differently when it ousted its chair, Marcus Bokkerink, last month. But what, precisely, does Jonathan Reynolds, the business secretary, wish to see?
His headline demand that the CMA should be “more agile” was meaningless – no politician, one suspects, has ever encouraged any regulator to be less nimble. Reynolds’ formal ministerial “strategic steer” was slightly better on specifics but not by much. It mostly rehearsed the government’s unconvincing but now-familiar refrain that there’s a role for regulators to play in encouraging growth and investment.
The easy bit to decipher from the high-level signalling was that everybody wants the CMA to make its decisions faster. Sarah Cardell, the watchdog’s chief executive, listed “pace” as the first of her “four Ps” for the new era, and nobody will grumble about a commitment to reduce the target for dealing with straightforward merger cases from 35 working days to 25. The “process” bit of her agenda, designed to encourage direct dialogue with companies, is similarly inoffensive.
The trickier ones are “predictability” and “proportionality”. What, for example, does taking “a proportionate approach to looking at global deals” mean? A natural reading is that the CMA has been prodded to ignore deals in the style of Microsoft’s bid for fellow US company Activision Blizzard, the Call of Duty developer, in 2023. Recall that the CMA’s initial refusal prompted a senior Microsoft executive to launch into a wild rant about “our darkest day in our four decades in Britain”.
Has the UK, without quite saying so out loud, decided it wants to avoid such aggro from US big tech in future? It rather looks that way. That seems to be the main conclusion from Thursday’s set-piece.
The rest of it, though, raised more questions than answers, certainly when it comes to moving the growth dial. The real tension in this area is what happens if the “pro-growth” agenda collides with the “pro-competition” one when the CMA is considering whether to shake up a UK market. On that score, it is hard to say we learned anything.
Look at one of the first inquiries launched under the new digital markets regime – into Google’s dominance of “search” advertising. The CMA diagnoses something akin to a £500-per-year Google tax for households and wonders whether the sum could be reduced by more effective competition. Google, one assumes, would hate some of the CMA’s early ideas, such as forcing it to make data available to other businesses, and may regard them as anti-growth or anti-innovation.
Is the regulator’s appetite for such fights affected in any way by Reynolds’ signalling? Presumably not. All the usual commitments to uphold consumer interests remain, and the CMA’s actual remit isn’t being changed. So it’s hard to see how airy political signalling adds anything to the mix – it just invites suspicion of the CMA’s independent process.
The other problem, of course, is that expecting regulators to produce growth is asking too much. As argued here previously, the government itself holds bigger growth levers, such as planning reform, the cost of energy, and the tax regime. Faster decision-making at the CMA may help at the margin – but, really, it’s small stuff.
None of which clears up the mystery of why Bokkerink was invited to fall on his regulatory ballpoint pen, to be replaced by Doug Gurr, a former chief of Amazon UK. As a former senior partner of Boston Consulting Group, Bokkerink always seemed a business-friendly type. Maybe it was a clash of personalities. Maybe it indicated more change than was actually described on Thursday; if so, the government should be clearer about what it expects.
