CMA Chair Shares Insights on Competition for Growth

While I've talked to many people in the 9 months I've been at the CMA at conferences, on podcasts, and in interviews, both privately and on stage - this is the first keynote speech I've delivered.

So I was pleased to be asked to deliver this speech on a subject that I feel strongly about - the importance of competition, and the competition and consumer regimes, to driving economic growth in the UK. The value of this contribution is determined both by what we do as the UK's competition and consumer protection agency, and, of course, by how we do it.

But first, a bit on why growth matters. A subject on which much has and will be said. I anticipate that much of my own thinking on this issue will be shared with this audience, but I'd like to take a moment to share this perspective.

A perspective that has been shaped by my experience in business, government, academia, and non-profits and which has been sharpened by the distinct challenges and opportunities that I have encountered as Chair of the CMA - an organisation with a clear mandate to promote competition and protect consumers, and to do so in a way that promotes growth.

Why growth matters

Economic growth is rarely, if ever, off the national agenda, but at a time when public finances are under pressure, when consumers face cost of living pressures, national debt is high, taxes are high, and the geopolitical environment is uncertain then securing economic growth becomes paramount.

There is no other way of delivering the public services and prosperity our citizens deserve.

The UK is not alone in finding it hard to secure growth, but our recent record is not strong, with sluggish productivity, the lowest levels of business investment in the G7, and inflation affecting household budgets.

Many things, with varying degrees of success, can be thrown at the wall to solve this conundrum.

But one thing that we know for sure is that business investment sticks: with more business investment, you get more productivity and more growth. You need capital to unlock opportunities in critical sectors where the UK has a comparative advantage, like life sciences and AI, and to create a highly skilled workforce, companies that innovate and scale, and a productive economy.

Where: The CMA's role in driving growth

So if business investment and growth are what the country should be striving for - where does the CMA come into the equation?

Having sat round the table at businesses making multi-billion-pound decisions about whether and where to invest. In the UK, elsewhere in Europe, in the US, China or elsewhere. I know, as you do, that there are many factors at play when a board pulls the trigger or pulls the plug.

But a very significant aspect of this decision, one which should not be underestimated, is whether you have confidence in the regulatory environment. The environment needs to be stable, informed by business needs, and fit for the future.

So the CMA, as a whole-economy authority with powers to make interventions in markets, to investigate mergers, to take action against anti-competitive practices, and to protect consumers from harms, has a key role to play in determining this environment.

If we create an environment that encourages business investment we can, in turn, drive growth. And we do this through the fundamentals of our role at the CMA, by promoting competition and protecting consumers.

Through strong, effective competition, we can open up access to markets, ensure there is a level playing field for businesses of all shapes and sizes, and drive innovation, investment and productivity that benefits UK citizens, businesses and the economy.

Through strong, effective consumer protection, we can secure better choices and deals for people, boosting consumer confidence and the financial resilience of households, while enabling fair-dealing businesses to succeed on their merits.

What: the impact of the work we do on growth

Of course, people should judge us by what we do, not what we say.

But before I get into the impact of our recent work and current priorities, I know there has been plenty of speculation, so let me first be clear about some key principles that have not, and will not change, and the circumstances under which action will always be a priority.

We will block anti-competitive deals where no effective remedy can be found.

We will intervene to tackle unfair behaviour, we will protect consumers from harm.

We will move as quickly as possible on our investigations, including in digital markets.

We will scrutinise the UK impact of global deals and take action where necessary.

And finally, we will carry out our duties and make our decisions as an independent, evidence-based UK authority.

So how does our work to promote competition and protect consumers deliver business investment and growth in practice?

Our work in the last few months offers an insight into this.

Using our new powers under the digital markets competition regime, we designated Apple and Google with strategic market status in mobile platforms yesterday , that includes browsers, operating systems, app stores - products and services that are used by most of us every single day. And earlier this month we designated Google with strategic market status for general search and search advertising services .

There's a high bar for designation. A firm must have substantial and entrenched market power and a position of strategic significance in a digital activity. Proportionality is baked in. SMS could only ever apply to a very small number of firms, given you need to have a global turnover of £25 billion or UK turnover of £1 billion.

The case for looking at these areas is clear - the way that search, and mobile platforms, work really matters to our everyday lives and to businesses' ability to compete and succeed.

More than 90% of searches in the UK take place on Google's platform, and UK businesses spent more than £10 billion on Google search advertising last year, while the app economy generates 1.5% of the UK's GDP and supports around 400,000 jobs.

To put that into perspective, that's 3 times the GDP of the entire agricultural sector. That's why I believe the digital markets regime has such important potential to make a positive difference to growth in the UK economy.

Competitive, innovative, open digital markets can generate investment and growth that is vital to the UK economy, and to the thousands of businesses that rely on these products and services to reach millions of people.

I am optimistic about the outcomes that we can achieve with this regime. This is not a one-shot, one-size-fits-all approach. It doesn't attempt to predict what the future will look like, and how technology will evolve. Designation is the starting point, and doesn't presume wrongdoing. We'll now be focused on assessing potential solutions to issues we that we have identified, working collaboratively with the parties and with other stakeholders in the tech ecosystem and beyond to create benefits for companies of all shapes and sizes.

Of course, these markets are global, and interventions in one jurisdiction affect another. The UK must do things in a way that works for the UK, and where approaches differ, we aim for dialogue and coherence, not confrontation or duplication.

This work in digital markets throws into sharp relief the importance of focusing our interventions and efforts on areas where we can really move the dial on growth, including through work in sectors where the UK has a competitive advantage and where there are significant gains to be made.

One such area is public procurement. I've heard directly from business leaders that procurement is a problem - with rules so complex that it is easier to sell anywhere other than the UK. NHS trusts often come up as examples, but this applies across the public sector.

Regulatory reform and simplification is key here, especially as procurement is worth £385 billion each year to the public purse. So, off the back of our recently published paper on scale ups , we're asking businesses to come to us with evidence of where procurement is holding back firms from scaling and succeeding, and how competition policy can help unlock these issues and others, especially in critical sectors like infrastructure, defence and healthcare. We've also been investing in our data and AI detection tools to better tackle bid rigging in public procurement, which we know can inflate prices by 20% of more.

Another assertion I sometimes hear is that we are somehow sacrificing consumer protection at the altar of growth. So I think it is worth pausing on some of our recent pro-consumer interventions. Much of this work shows how competition can help protect consumers and keep down the cost of living, boosting consumer confidence and stimulating growth, while also supporting businesses to succeed. In other words, consumer protection and growth go hand in hand.

Some examples

• the CMA's road fuel market study found that greater transparency on fuel prices was desperately needed, and we advocated for a legislative scheme to make this compulsory - we expect this to be in place at the end of the year, subject to parliamentary scrutiny, and are confident it can make a real difference to drivers by stimulating more competition in the sector

• our vets market investigation has provisionally found that people are paying more for medicines and treatments than they should we've put forward proposals to empower pet owners and drive competition - including recommendations to Defra to overhaul the regulatory framework

• we investigated Ticketmaster and announced undertakings to address fans' concerns - now, Ticketmaster will not use misleading labels and fans will have access to more information

• we investigated housebuilders for suspected breaches of competition law, resulting in us consulting on a commitments package that included £100m to fund new affordable homes

• and our market study into infant formula exposed high prices and poor outcomes for parents - resulting in recommendations to government on updates to the regulatory framework to stimulate price competition and make existing regulation more effective - we stand ready to work with government to make these changes a success

• finally, a word on our new consumer protection regime which came into force in April - we know that the vast majority of businesses want to do right by their customers, and we will take action against egregious harms where that isn't the case: the message to consumers is - we've got your back - our first cases will be announced in the coming weeks

So through our actions we can promote competition, protect consumers and make it easier for the economy to grow.

But equally important to what we do, is how we go about our work.

How: the way in which we work

Some of you may already be familiar with our 4Ps framework . This was created as a direct result of feedback on how the CMA needed to change to reduce burdens on business, minimise uncertainty, and strengthen business and investor confidence.

We've been rolling out improvements and changes, over 75 so far, under the principles of pace, predictability, proportionality and process across all our functions this year.

We're not implementing these reforms in a locked room, away from scrutiny or feedback. We're listening and taking action as a result of feedback on how things are working.

We've got a new Growth and Investment Council with business leaders; we're making our guidance more accessible and clearer; and we're engaging earlier in our investigations to make sure we demystify processes, and make sure that the CMA really understands what it's like to be on the other side of the table.

I know the value of this - the need for this - having been on the other side of the table myself.

While head of Amazon UK, I led on Amazon's 16% investment in Deliveroo, including the CMA's investigation into this: it didn't feel very pacy, taking over 18 months, very proportionate or very predictable. I am confident the organisation has changed since then, and it's a privilege to be at the CMA while this transformation is underway.

The mergers regime was the first test case for the 4Ps, with new KPIs in place, mechanisms for firms to talk to decision-makers earlier in the process, clarity provided on when we will intervene, and a comprehensive refresh of our guidance on when we will accept remedies , that responds directly to businesses' feedback.

Beyond the 4Ps, we're also looking now at how we measure our impact and performance, developing a new suite of KPIs that looks both at direct and indirect impact, how quick and efficient our operations are, and how we engage with key stakeholders.

And we're enhancing our operating model - to make sure we are agile and fit for the future.

Conclusion

Let me conclude with a number of simple points.

I hope I have been able to explain to you why growth matters and how an organisation like the CMA can be a major contributor to growth. We will be publishing an updated strategy shortly that expands on these areas, including setting out how we will go about rigorously measuring the impact of our work.

In the meantime, I very much hope with can continue with the level of engagement we have seen over recent months. We all benefit from talking to each other.

And one final point - we should be unapologetic about showcasing the UK's regulatory regime as a strategic national asset. It's world class and - properly deployed - can be a significant driver of growth.