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It probably came as a relief for the UK’s competition regulator to get a good review this week. Margherita Della Valle, Vodafone’s chief executive, sang its praises after gaining approval for a £16.5bn merger with Three UK, saying that the EU should follow Britain’s approach.
Compliments have been in short supply for the Competition and Markets Authority. The government forced out Marcus Bokkerink as chair because it did not think he was taking growth seriously enough. His successor, Doug Gurr, former head of Amazon UK, has duly backed “a regulatory environment that encourages the greatest possible level of business investment”.
It is tempting for governments to enlist antitrust authorities in their political efforts, rather than focusing on keeping markets competitive. There is a lot of that about: China this week revived antitrust investigations into Google and Nvidia to give itself leverage in a struggle with the US over tariffs threatened by Donald Trump.
The EU is meanwhile agonising about whether its tough antitrust approach has held Europe back from building companies that can compete with technology giants from the US and China. Mario Draghi, former European Central Bank president, suggested in a report last year that the EU should stop being so cautious about consolidation.
Forcing technocrats to pursue multiple aims simultaneously does not generally work out well. “They are not suited to making the trade-offs that politicians face. They should do one job properly,” says one competition lawyer. The government used to have the final say on UK mergers but made regulation independent in 2002: if it wants such powers back, it ought to say so.
But regulators should not operate in a political and judicial vacuum, imposing their theories of economic harm without facing the consequences of failure. While it would be wrong for a government that is desperate for growth to bully the CMA into changing its purpose, the latter should not be immune from attack or having any of its decisions questioned.
It is fair to criticise how the CMA has operated in recent years, particularly since the post-Brexit break in 2021, when it no longer had to defer to the EU on international mergers. Matters came to a head in 2023 when it finally approved Microsoft’s $75bn acquisition of Activision Blizzard after 21 months of uncertainty, having initially stood out globally by blocking it.
This crystallised various complaints about the CMA. One is that it takes a long time to make decisions, and envelops companies in what one lawyer calls “a miasma of uncertainty” by not defining exactly what it is worried about. “They tie you up in knots with a trillion questions and you end up back where you started,” says one chief executive.
A second complaint is that it drifted into antitrust activism on a global scale, even when the UK market was only a small part of an international merger. It was among national regulators that advanced a tougher approach to takeovers by US technology companies, including Lina Khan, who is now stepping down as chair of the US Federal Trade Commission.
The mood has changed and Gurr’s appointment is not a coincidence, given how hard US companies have grumbled behind the scenes about the CMA’s attitude. Even one former CMA official says it lost some of the sense of proportion and restraint it once exercised, becoming opaque and officious.
There are structural holes in how the CMA operates. Its antitrust decisions are made by panels, with only restricted grounds for appeal to a tribunal. This contrasts with the US system, in which several FTC efforts to restrain business under Khan were overturned by the courts. It has also been hard to recruit business people to sit with economists on the panels.
The upshot is a body that has often worked slowly, inefficiently and with little need to account to the outside world. This is not only the view of companies that would prefer just to get on with takeovers and not be bothered, but even enlightened elements of the CMA itself. Sarah Cardell, chief executive, has said that it wants to be more transparent and less adversarial.
While the CMA needs to change, Gurr has not indicated so far that he intends to divert it from its core role of reinforcing competition and serving consumer welfare. The government may be keen to push things further by inserting the aim of encouraging growth and investment into its formal mandate.
My advice is, do not. It might make a headline but it would cause confusion, interfere with the CMA’s reforms and be of no help. The technocrats are being nudged in the right direction.
john.gapper@ft.com