Ousting of CMA chair prompts warnings of interference in UK regulation

Antitrust lawyers have questioned the “extraordinary” decision by ministers to remove the chairman of Britain’s competition watchdog, suggesting it could have a “chilling” effect on other UK regulators.

The government has confirmed The departure of Markus Bokerink As chairman of the Competition and Markets Authority on Tuesday night, after the Financial Times reported that business secretary Jonathan Reynolds had intervened.

Chancellor Rachel Reeves, speaking to Bloomberg in Davos on Tuesday, implicitly criticized Bokerink. “He realized it was time for him to step on and make way for someone who shares the mission and the strategic direction this government is taking.”

Ministers this month ordered Britain’s 17 biggest regulators to outline how they intend to help boost UK economic growth, but a number of lawyers and lobbyists said Bokerink’s resignation was unexpected.

“To be honest, it was a bit of a surprise,” said one business lobbyist. . and they seemed to really get it and make a difference.”

One antitrust lawyer at a London firm said the move would have a “chilling and chilling effect” on independent regulators across the country.

“While this may seem reassuring for business in the short term, if competition policy is in political fashion, it becomes less stable and predictable, undermining business confidence,” they say.

“It is an extraordinary step on the part of the government to interfere with the competition body in this way,” they added.

Bokerink’s departure raises questions about whether ministers are prioritizing the demands of big business over competing priorities such as consumer rights and the environment.

The government has appointed a new interim chairman of the CMA, Doug Gurry, who ran Amazon’s UK business during the dispute with the company. CMA: for its minority investment in Deliveroo, which the regulator eventually approved in 2020.

One person said the forced exit was like a “desperate move by a struggling government” trying to win back popularity with business leaders after imposing extra regulations and taxes on corporations last year. Budget:.

The move has also sparked speculation over the fate of CMA chief executive Sarah Cardell and whether she too could be replaced.

Andrew Griffith, the shadow business secretary, told the House of Commons on Wednesday that the Conservative Party wants regulatory reforms so that businesses have “less dead weight”.

“But the non-executive chairman of the CMA seems an interesting place to start,” he told the House of Commons. .

Cardell has been at pains in recent weeks to emphasize that the regulator is taking the government’s growth mandate seriously.Cardell told the FT in November that the agency was planning a review of its merger fundsthe announcement of more mergers may be supported by measures such as price freezes rather than by forcing divestitures.

A person familiar with the matter said Cardell had “positive discussions” with ministers about his role after Bokerink’s resignation.

Max von Thun, Europe director of the Open Markets Institute, said the CMA had been at the forefront of global efforts to push back against growing market concentration, particularly in the “monopolistic” technology sector.

“The government’s decision to replace the chair of power with a former Amazon executive at a time when several US tech giants are tightening their grip on the future of artificial intelligence is a major strategic mistake,” he said.

Lawyers and competition experts noted that Claire Barclay, until recently head of Microsoft UK and now in another senior role at the company, is chairing the government’s new Industrial Strategy Advisory Board.

In a two-page statement released on Tuesday evening, Bokerink said he had helped refocus the CMA to ensure it “empowers consumers and effective competition, not a few powerful incumbents making the rules for everyone”.

Business groups welcomed the government’s intervention. Craig Beaumont, chief executive of the Federation of Small Businesses, said he hoped the CMA would “now do more about growth”, while Stephen Phipson, head of manufacturing lobby group Make UK, welcomed ministers’ efforts to make regulation “fit for purpose”. for:

One banker said the CMA was seen as an obstacle and that Bokerink’s removal could be a way to send a message to the regulator’s staff.

His departure comes as the CMA has been given new powers to regulate digital markets.

It Last week announced that Google will be the first company the watchdog investigates to determine whether the tech giant warrants special market status given its position in search services, which could see it subject to tougher conduct rules.

The government is due to submit “strategic guidance” to the CMA in the coming weeks, setting out its priorities for the regulator.However, apart from its desire for the watchdog to focus on growth, it was unclear what Labor actually wanted the CMA to do, they said. lawyers.

“The government is clearly unhappy with the CMA but doesn’t seem to have any concrete views on the error,” said one antitrust lawyer.

Additional reporting by Ivan Levingston