At the headquarters of the UK’s Competition and Markets Authority (CMA) in Canary Wharf, signs remind staff to keep discussions private due to the billions of pounds influenced by its decisions. However, a public debate has emerged over the regulator’s independence, as the government moves to reshape its approach.
The issue gained momentum in October when the prime minister criticized regulators for “unnecessarily hindering investment” during a global business summit. In January, top regulatory bodies were called in to explain how they would support the government’s pro-growth agenda. Shortly after, the government removed CMA chair Marcus Bokkerink, replacing him with Doug Gurr, a former head of Amazon UK.
Now, just over two years into her tenure, CMA chief executive Sarah Cardell and her organization are under increased scrutiny. After a busy morning of media interviews, she addressed the regulator’s latest intervention—this time in the baby formula market.
The CMA has proposed changes such as standardized hospital packaging and allowing consumers to use loyalty cards when purchasing formula, measures aimed at helping parents save around £300 annually by switching to lower-priced brands. The case highlights the CMA’s wide-ranging role, from overseeing major tech firms to investigating anti-competitive practices in industries such as asbestos removal.
“This role presents a unique opportunity to make a tangible impact,” Cardell said. “One moment, we’re dealing with competition in the tech sector, and the next, we’re focused on essential goods like baby formula—markets that really matter to consumers.”
Concerns Over Political Influence on Regulation
Despite its broad responsibilities, some argue that the CMA’s core mission—ensuring fair competition and protecting businesses and consumers—has become more difficult due to increasing government pressure. The administration, eager to boost its economic credibility after a series of financial setbacks, has urged the regulator to align with investment goals.
Last week, Business Secretary Jonathan Reynolds issued new guidance directing the CMA to prioritize economic growth and avoid unnecessary intervention in global mergers. Critics warn that this approach risks undermining the UK’s long-standing commitment to independent regulation.
A former regulator expressed concerns, stating: “Businesses may now assume the government has signaled regulators to be more lenient on mergers. It gives the impression that monopolies are acceptable as long as they promise investment.”
Cardell, a former competition lawyer, dismissed speculation that there had been tensions between her and Bokkerink over the regulator’s direction, stating that his departure was a matter between him and the government. Reports suggest several CMA board members considered resigning in protest over the government’s intervention, but Cardell appears to have accepted the changes.
“I am very comfortable with Doug’s appointment and have benefited from working with him,” she said. “He brings valuable experience to the role.”
She also downplayed concerns that the CMA’s new focus on growth would conflict with its role in maintaining fair competition.
“Our statutory responsibilities remain the same: to promote competition and protect consumers,” she said. “The key is ensuring that the way we carry out those duties contributes to economic growth and business confidence.”
Cardell rejected the notion that the CMA has been a barrier to economic growth but acknowledged that the regulator must address perceptions that its actions could discourage investment.
“It’s fair to ask whether we are doing enough to foster a positive business environment,” she said. “That doesn’t mean we’ll suddenly allow anti-competitive mergers, but we must ensure our processes support growth and predictability.”
Shift in Approach to Global Deals?
The CMA’s stance on competition has shifted notably over the past two years. In a 2022 speech, Cardell outlined plans to regulate tech giants more proactively to prevent “winner-takes-most” scenarios. She highlighted Amazon’s vast market influence, spanning retail, logistics, cloud computing, and digital entertainment, warning of risks linked to dominant firms controlling essential services.
That policy was put to the test in April 2023 when the CMA blocked Microsoft’s $68.7 billion acquisition of Activision Blizzard, citing concerns over competition in the cloud gaming market. The decision sparked backlash, with Microsoft calling it a “dark day” for its UK operations and the then-chancellor warning regulators to consider their role in economic growth.
Despite the controversy, Cardell insisted there had been “no government pressure” during the Microsoft investigation. The deal was later approved after Microsoft agreed to concessions, including selling cloud gaming rights outside Europe to a rival company.
However, the regulatory landscape has changed significantly since then. With global politics shifting and increasing scrutiny over the regulation of US tech firms, questions arise over whether the CMA would intervene in similar cases today.
When asked if the regulator would take the same stance on a future global merger, Cardell said, “It’s something we would need to consider carefully.”
“The key is to take a proportionate approach rather than assuming we must intervene in every global deal,” she added.
The CMA’s approach will soon be tested again as it investigates Google’s dominance in search and advertising, as well as the control Apple and Google have over mobile app markets. If the regulator finds they have abused their market position, it could impose restrictions and fines of up to 10% of their turnover.
“I see fines as a last resort,” Cardell said. “Our focus is on constructive engagement and resolution.”
As the CMA balances its regulatory role with increasing political pressure, the coming months will determine whether it can maintain its independence while meeting government expectations on economic growth.
For more updates on the CMA’s regulatory challenges and government influence, visit London Pulse News
