Antitrust lawyers have questioned ministers’ “extraordinary” move to remove the chairman of Britain’s competition watchdog, suggesting it could have a “chilling” effect on other UK regulators.
The government confirmed the departure of Marcus Bokkerink as chairman of the Competition and Markets Authority on Tuesday evening, after the Financial Times reported that Business Secretary Jonathan Reynolds had intervened.
Chancellor Rachel Reeves, speaking to Bloomberg in Davos on Tuesday, implicitly criticized Bokkerink: “He recognized that it was time for him to move on and make way for someone who shares the mission and the the strategic direction this government is taking. »
This month, ministers ordered 17 of Britain’s biggest regulators to set out how they intend to help boost the UK’s economic growth. But a number of lawyers and lobbyists said Bokkerink’s resignation came out of nowhere.
“To be honest, it was a bit of a surprise,” said one business lobbyist. “We have had numerous discussions with the AMC. . . and they seemed to really understand and make changes.
An antitrust lawyer from a London firm said the move would have a “chilling and intimidating effect” on independent regulators across the country.
“While in the short term this seems reassuring for businesses, if competition policy is at the mercy of political fashions, it becomes less stable and less predictable, undermining business confidence,” they said.
“It is an extraordinary decision on the part of the government to interfere so much in a competition authority,” they added.
Bokkerink’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 Doug Gurr, interim chairman of the CMA, who led Amazon’s UK business during the company’s struggle with the CMA on its minority investment in Deliveroo, which the regulator finally approved in 2020.
One person said the forced exit looked like a “desperate measure by a struggling government” that was trying to regain popularity with business leaders after imposing additional regulations and taxes on businesses last year. last. Budget.
The move also led to speculation about the fate of CMA chief executive Sarah Cardell and whether she could also be replaced.
Andrew Griffith, the shadow business secretary, told the House of Commons on Wednesday that the Conservative Party wanted regulatory reform so that businesses “carry less dead weight”.
“But sacking the part-time non-executive chairman of the CMA seems a curious starting point,” he told the House of Commons. “He is not responsible for day-to-day decision-making at the CMA. That’s the job of the general manager. Did they aim and miss?
Cardell has been at pains in recent weeks to emphasize that the regulator takes the government’s growth mandate seriously. In November, Cardell told the FT that the agency was planning a review of its merger remediesindicating that more mergers could be approved based on commitments such as price freezes rather than forcing the sale of assets.
A person familiar with the matter said Cardell had had “positive discussions” about his role with ministers since Bokkerink resigned.
Max von Thun, Europe director of the Open Markets Institute, said the CMA was at the forefront of global efforts to combat growing market concentration, particularly in the “monopolistic” technology sector.
“The government’s decision to replace the authority’s president with a former Amazon executive, at a time when a handful of American technology giants are tightening their grip on the future of artificial intelligence, is a mistake major strategic move,” he said.
Lawyers and competition experts have pointed out that Clare Barclay, until recently a director of Microsoft UK and now in another senior role at the company, chairs the government’s new industrial strategy advisory board.
In a two-page statement released Tuesday evening, Bokkerink said he had helped refocus the CMA to ensure it worked to empower “consumers and effective competition – instead of being held back by a few powerful incumbents setting the rules for everyone.”
Business groups welcomed the government’s intervention. Craig Beaumont, executive director of the Federation of Small Businesses, said he hoped the CMA would now “do more for growth”, while Stephen Phipson, head of manufacturing lobby group Make UK, applauded the efforts ministers to make regulation “fit for purpose”. .
One banker said the CMA had been seen as an obstacle and Bokkerink’s ouster could be a way of sending a message to the regulator’s staff.
His departure comes as the CMA has been given new powers to regulate digital markets.
He announced last week that Google would be the first company the watchdog would investigate to decide whether the tech giant warranted special market status in light of its position in search services, which could force it to more rules of conduct strict.
The government is expected to publish a “strategic direction” to the CMA in the coming weeks, setting out its priorities for the regulator. However, beyond its desire for the watchdog to focus on growth, it was unclear what Labor actually wanted the CMA to do, lawyers said.
“The government is clearly unhappy with the CMA, but does not seem to have a concrete view on what is wrong,” said a competition lawyer.
Additional reporting by Ivan Levingston