Dismissal from the CMA chair warns of interference in UK regulation

Antitrust lawyers have warned that a “shocking” decision by ministers to force the chairman of Britain’s competition watchdog could have a “shocking” effect on other UK regulators.

The government confirmed the resignation of Markus Bockkern as chairman of the Competition and Markets Authority on Tuesday night, after the Financial Times’ business secretary Jonathan Reynolds reported the interference.

Speaking to Bloomberg in Davos on Tuesday, Chancellor Rachel Reeves implicitly criticized Bockrink: “He knew it was time to make way for someone who shares the mission and the strategic direction this government is taking.”

This month, ministers ordered Britain’s 17 biggest regulators to outline how they would help boost the UK economy. But several lawyers and lobbyists said Bockrink’s resignation came out of the blue.

“It was quite a surprise, to be honest,” said one business lobbyist. “We have had many discussions with the CMA. . . And it looks like they got it right and are making changes.

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

“Although it seems to be reassuring for business in the short term, if competition policy is in political fashion, it will be stable and predictable, which will damage business confidence,” he said.

He added: “It is an unusual move for the government to intervene in the competition authority.”

Bockkern’s departure raises questions about whether ministers are putting the interests of big business ahead of priorities such as consumer rights and the environment.

The government has appointed Doug Gurr as a new interim CMA chairman to oversee Amazon’s UK business amid a row with the CMA over the company’s minority investment in Deliveroo.

One person said the forced withdrawal “looks like a desperate move from a embattled government” trying to win favor with business leaders after last year’s budget imposed more regulations and taxes on corporations.

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

Andrew Griffiths, the shadow business secretary, told the House of Commons on Wednesday that he wanted businesses to “keep a low profile” as the Conservative Party sought regulatory reform.

But sacking the CMA’s non-executive part-time chairman seems curious to begin with. “He is not responsible for day-to-day decisions in the CMA. It’s the CEO’s job. What do they aim for and miss?

Cardell has been at pains in recent weeks to emphasize that the regulator is taking the government’s growth mandate seriously. In November, Cardell told the FT that the agency plans to review merger solutions, suggesting more mergers based on activities such as cost reductions rather than forcing asset transfers.

A person familiar with the matter said Kardel Bockrink had had “positive discussions” with ministers about her role after his resignation.

According to Max von Thuen, European director at the Open Markets Institute, the CMA has been at the forefront of pushing for growing market concentration, particularly in the “monopolistic” technology sector.

“At a time when only a handful of US tech companies have a firm grip on the future of artificial intelligence, the government’s decision to replace the agency’s chairman with a former Amazon executive is a major strategic mistake,” he said.

Lawyers and competition specialists have pointed out 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 Council.

In a two-page statement released Tuesday night, Bockkernck said he helped refocus the CMA “on empowering consumers and effective competition — rather than being caught up in a few powerful bureaucrats setting the rules for everyone else.”

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

A banker said the CMA was seen as a hindrance and sacking Bokkernk could be a way of sending a message to the regulator’s staff.

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

Google announced last week that it would be the first company to be tracked by Google to determine whether the tech giant’s position in search services warrants special market status.

The government is to issue a “strategic guide” for the CMA in the coming weeks, which will set out the priorities for the regulator. But beyond the watchdog’s desire to focus on development, it was unclear what Labor wanted the CMA to do, lawyers said.

“The government is clearly not happy with the CMA but it doesn’t seem to have a realistic view of what went wrong,” said a senior antitrust lawyer.

Additional reporting by Evan Levingston