The CMA: What is it and how is it changing?
- Insights Digest
- Feb 21
- 2 min read
Annika Park, 21 February 2025.
Introduction
The Competition and Markets Authority (CMA) is an independent department within the UK government which works to protect consumers and promote competition. Their work includes enforcing competition and consumer law, promoting competitive markets, advising the public and governments, and investigating market activity.
Changing Landscape
The CMA has been notoriously strict in the past, particularly when deliberating on mergers. However, in November 2024, Sarah Cardell, the Chief Executive of the CMA, announced that the CMA would focus on delivering growth in the UK economy. She backed this claim by announcing that the CMA would begin to focus on behavioural remedies, rather than structural remedies. This would benefit businesses and the economy as a whole as instead of enforcing structural remedies such as the divestiture of assets, the CMA would enforce behavioural remedies such as commitments to provide certain services or goods. Moreover, their Chief Executive stated that “every deal that is capable of being cleared either unconditionally or with effective remedies should be” when speaking about mergers, showcasing the CMA’s change in attitude.
In January 2025, the Ministers sent shockwaves through the business community when they announced that they had ousted the head of the CMA, Marcus Bokkerink, and replaced him with the former Amazon UK head, Doug Gurr. CMA’s commitment to change in their regulatory attitude is clear and follows Chancellor Rachel Reeves’ aim to push regulators to “tear down” the barriers which are hindering business growth in the UK.
Practical Outcome
The CMA’s change in strategy has already manifested in the market through the massive Vodafone and Three merger. This £15 billion deal is set to create the UK's biggest mobile phone operator, beating out the current market dominators, EE (owned by BT) and O2 (owned by Virgin Media). After a long consultation period, the CMA has decided to approve the deal and it is planned to be completed in the next couple of months.
Initially, the CMA was worried that this merger would stifle competition and consumer choice in the UK mobile market. However, they decided to approve the deal as long as Vodafone and Three agreed to adopt behavioural remedies. These remedies include a £11 billion investment in 5G to improve coverage, price caps on some mobile tariffs and data plans for three years, and working with smaller operators, such as Giffgaff and Sky Mobile. As the CMA is known to take a stricter approach to telecom mergers, usually requiring companies to sell parts of their business, approving the Vodafone and Three deal proves that the CMA is becoming more flexible, recognising that consumers may benefit from this deal.
Looking Forward
The CMA has continued to promote that it plans to drive growth, invest in markets and build business confidence. Its aims focus on reaching faster decisions on mergers and reducing in-depth reviews to ensure that the review process is streamlined. Only time will tell if the CMA’s change in strategy will have a substantial and lasting effect on the UK’s market, business competition, and consumer satisfaction.
Sources
Comments