BREAKINGVIEWS-UK antitrust ouster signals risk as much as growth

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By George Hay

LONDON, Jan 22 (Reuters Breakingviews) - Rachel Reeves is sending a message. The UK finance minister on Monday booted out Marcus Bokkerink from his role chairing the national antitrust regulator, the Competition and Markets Authority. It’s squarely in keeping with her push to spur British growth, which in turn echoes what others are doing abroad. But it also sends a risky signal.

Under Bokkerink’s two-year tenure, the CMA has not exactly been beyond reproach. On one of its biggest tests – assessing the merits of Microsoft’s MSFT.O $69 billion tie-up with “Call of Duty” gaming giant Activision Blizzard – it flip-flopped between flexing its muscles and softening its stance. That reflects a wider post-Brexit reality for UK regulators – when both the United States and the European Union take a milder line on a merger, as happened for varying reasons with Microsoft-Activision, there’s a downside to Britain looking too tough.

In fairness to Reeves, both the U.S. under President Donald Trump and the EU under Ursula von der Leyen’s new European Commission have firmly signalled an intent to take a more business-friendly approach to mergers. As repeated ad nauseam by European telcos, an obsessive focus on customer bills has left the sector with poor profitability and unable to adequately invest. The risk of over-regulation for growth-spurring nascent sectors like artificial intelligence may be as great as the dangers of under-regulation.

Still, the CMA has not looked mindlessly over-zealous of late. While noting the risk of higher bills, last September it allowed the $19 billion Vodafone-Three UK merger to proceed without requiring major divestitures. Of the 1,037 mergers considered by the CMA in 2024, only 0.2% were blocked or abandoned.

Reeves’ get-tough approach has two risks. While a focus on growth need not mean the CMA starts blithely waving through M&A, it may yet hit consumers. Open investigations into anti-competitive antics in areas like the private equity-heavy veterinary practices sector may get watered down. Appointing former Amazon UK boss Doug Gurr as Bokkerink’s interim replacement is an interesting look given the CMA now has new powers to regulate big tech.

More concerningly, the ouster sends a disturbing message to Britain’s other regulatory leaders, like the Financial Conduct Authority’s Nikhil Rathi and the Prudential Regulation Authority’s Sam Woods – who have in the last week both been obliged to submit homework to Reeves outlining what they’re doing to aid UK growth. A bigger reason for the UK’s anaemic growth is Reeves’ own policy of raising taxes on business, but the implicit message to the regulators in order to keep their jobs is to regulate less tightly. For those that remember Britain’s ill-fated “light-touch regulation” in the run-up to the 2008 financial crisis, the risks are all too clear.

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CONTEXT NEWS

Britain forced out the chair of its antitrust regulator because he was not focused enough on the government's drive to boost economic growth, finance minister Rachel Reeves said on Jan. 22.

Marcus Bokkerink was replaced late on Jan. 21 by the former Amazon executive Doug Gurr on an interim basis, the government said, adding that he would bring a wealth of experience in tech.

Reeves demanded the Competition and Markets Authority and other British regulators "tear down the barriers hindering businesses and refocus their efforts on promoting growth" in a meeting last week.

She said on Jan. 22 that Bokkerink had stepped down after recognising that the CMA needed to be headed up by someone who shared the government's "strategic direction".

"He recognised it was time for him to move on and make way for somebody who does share the mission and the strategic direction that this government are taking," she told a Bloomberg event at the World Economic Forum's annual meeting in Davos.

In October, the CMA was singled out by Labour Prime Minister Keir Starmer when he promised to scrap regulation that was holding back growth.

The regulator said the following month that it would focus on "truly problematic mergers" and rethink its approach to remedies that could allow more deals to go ahead to support the government's growth mission.

(Editing by Francesco Guerrera and Streisand Neto)

((For previous columns by the author, Reuters customers can click on HAY/
george.hay@thomsonreuters.com))