UK Competition and Markets Authority
The Competition and Markets Authority is the UK's primary competition and consumer protection regulator, formed in 2013 by merging the Office of Fair Trading and Competition Commission. Brexit dramatically elevated the CMA's significance—previously cases with EU dimension were handled by Brussels, but post-2020 the CMA reviews major global mergers independently.
The CMA's Microsoft/Activision decision (initially blocking the $68.7 billion deal before approving a modified version) signaled the UK's ambition to be a 'global regulator' alongside the EU and US. This assertiveness has created tensions with government ministers prioritizing economic growth, culminating in the CMA chair's resignation in January 2025 after disagreements about balancing enforcement with growth objectives.
Post-Brexit, the CMA gained authority to review major global mergers concurrently with the EU Commission. Of six parallel digital market reviews through 2024, five involved US companies as both acquirer and target—giving the UK extraordinary influence over American tech consolidation. The CMA initially blocked Microsoft's $68.7B Activision acquisition in April 2023, one of the largest merger prohibitions in history. However, after Microsoft's 'wrath earned it a one-to-one meeting with chancellor Jeremy Hunt,' the CMA reversed course and approved a modified deal in October 2023—triggering 'widely held suspicion that there was substantial political pressure on the CMA.' In January 2025, CMA chair Marcus Bokkerink resigned after disagreements with ministers on prioritizing growth over enforcement.
Key Facts
Power Dynamics
Independent authority to investigate mergers, conduct market studies, enforce consumer protection, and (since 2024) regulate digital markets
Brexit gave CMA global merger jurisdiction but exposed it to political pressure. The Microsoft/Activision reversal revealed limits of independence when major deals threaten government growth objectives. The 2024 Digital Markets, Competition and Consumers Act granted SMS (Strategic Market Status) designation powers—similar to EU's DMA but tailored for UK market. However, chair resignation (Jan 2025) and minister meetings signal government expects 'pro-growth' enforcement, not EU-style tech confrontation.
- Government ministers can apply informal pressure (as in Microsoft case)
- Competition Appeal Tribunal (CAT) can overturn decisions
- Judicial review challenges
- Parliamentary scrutiny committees
- Government ministers (growth vs enforcement tension)
- EU Commission (coordination on parallel reviews via 2024 CCA)
- US FTC/DOJ (informal coordination but divergent priorities)
- Big Tech companies (regulatory capture concerns post-Microsoft reversal)
Decision Dynamics at UK Competition and Markets Authority
Phase 1 clearances for non-problematic mergers can complete in 40 working days with straightforward remedies.
Microsoft/Activision: Initial prohibition April 2023, appeal filed, CMA reopened investigation, approved modified deal October 2023 (6+ months of political pressure and negotiation). Some market investigations extend 2+ years with appeals.
Political pressure from ministers prioritizing growth. Limited resources compared to EU/US counterparts. CAT appeals can add 6-12 months. Coordination with EU/US on global mergers creates timing dependencies.
Failure Modes of UK Competition and Markets Authority
- Microsoft/Activision reversal (2023): Prohibition followed by approval after political pressure damaged credibility as independent regulator
- Chair resignation (Jan 2025): Marcus Bokkerink left after disagreements with ministers on growth vs enforcement, signaling political constraints
- Sainsbury's/Asda merger block (2019): Prohibition appealed but upheld, though criticized for protecting incumbent Tesco
- Lack of true independence—ministers can pressure via informal meetings and public statements
- Small budget/staff compared to EU/US counterparts limits capacity for major investigations
- Post-Brexit identity crisis: global regulator ambitions vs UK-only market size
- Digital Markets Unit powers granted 2024 but untested in practice
If UK government consistently prioritizes growth over enforcement (as Microsoft case suggests), CMA could become 'toothless watchdog'—conducting investigations but approving deals under political pressure. Tech companies would exploit this, making UK the 'Delaware of merger approvals.' Alternatively, aggressive enforcement could trigger more chair resignations and statutory reforms limiting CMA independence, aligning it with ministerial priorities.
Biological Parallel
The CMA underwent sudden speciation in 2020 when Brexit separated it from the EU Commission. Like a population isolated on an island evolving distinct traits, the CMA initially attempted to occupy a similar niche to DG COMP (aggressive tech enforcement, global merger review). However, competitive exclusion dynamics emerged—the UK market is too small to sustain identical enforcement to the EU, and government pressures push toward niche partitioning. The Microsoft reversal represents the CMA's 'alarm call' to other regulators about political constraints it faces. It's now evolving toward a distinct niche: pro-growth competition enforcement focused on UK-specific harms rather than mimicking EU's global tech confrontation.
Key Agencies
Reviews mergers and acquisitions for competition concerns
Market studies and investigations
Regulates digital platforms under Digital Markets Act 2024