How Politicising the UK’s CMA Threatens the Rule of Law
The Competition and Markets Authority (CMA) is the UK regulator tasked with enforcing competition and antitrust law. However, it recently pledged to conform to the UK's new business-friendly posture, raising questions about its ability to effectively carry out that responsibility. Rounding off this novel commitment, the UK government installed Doug Gurr, the former head of Amazon UK, to lead the CMA. This broad paradigm shift by the CMA, which it says “unambiguously [reflects] the need of the UK to enhance the attractiveness of the UK as a destination for international investment,” strays from its longstanding commitment to consumer protection and monopoly prevention [1, 2]. The Labour government hopes that shifting the mission statement of the CMA will show that the UK is a favourable business environment, thereby driving growth [2]. In reality, this move only undermines the rule of law by politicising an independent institution. Gurr’s appointment also sets a dangerous precedent for government interference in independent regulatory bodies, which threatens legal stability. Equally concerning, it also risks damaging the UK’s legal reputation abroad.
Supporters of the shifting approach of the CMA following Gurr’s appointment argue that a less restrictive CMA will contribute to business development and attract investment into the UK. This, in turn, will drive economic growth, which the UK economy needs, as growth has been stagnant since the pandemic [3]. They argue that increasing economic growth is so uncontroversial and intuitive that it cannot even be called a partisan goal. As a Financial Times journalist puts it, “Almost everyone names growth as their priority” [4]. By this account, shifting the CMA’s mission from consumer protection to increasing economic growth is far from a politicisation of the institution — it is merely doing what is right for the country. Supporters might point to the success of the recent Vodafone-Three merger in the UK, approved by the CMA in December [5]. Although the CMA found that the deal would result in “a substantial lessening of competition in two markets in the UK,” it nonetheless approved the merger on the condition that the companies maintain fixed prices to protect consumers and make a financial commitment to invest in the UK mobile network [5]. Supporters might argue that this deal epitomizes the case for relaxing competition law in favor of benefits for consumers and driving growth.
However, while growth is widely accepted as necessary and thus not politically controversial, the means of achieving this growth are. And to be sure, it is not obvious that shifting the mission statement of the CMA will even deliver the promised growth. One could argue that the competitive markets, which the CMA previously focused on protecting, are what ultimately give way to growth. If the CMA is less restrictive, as the Labour government is pushing for, this gives way to more room for monopolies to form. This is arguably bad for economic growth, in that it is detrimental to new players trying to enter a given market. The means of pursuing growth through this change in the CMA is highly debatable and hence political. Thus, shifting the CMA’s mission is not an uncontroversial, bipartisan win, but rather a highly contentious political decision. And this partisan move will weaken the rule of law in the UK.
The biggest danger in shifting the focus of the CMA is the politicisation of an independent, nonpartisan institution, which would undermine the rule of law. In defining the key pillars of the rule of law, the House of Lords library cites Lord Bingham, a renowned British judge [6]. He states that, “The law must be accessible and, so far as possible, intelligible, clear and predictable,” and that, “Questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion” [7]. This distinction between application and discretion is particularly pertinent to my argument. Because the government cannot exist above the law, the rule of law also requires the separation of powers between the state and the legal system, of which the CMA is a part. This means that the law ought not change to fit the plans of the current government, but on the contrary, the government must ensure its plans fall within the scope of legality. This principle is crucial, as keeping governmental power in check is one of the pillars of a healthy democracy [7]. In changing the mission of the CMA, the government has gone as far as to issue instructions that the CMA must “unambiguously reflect the need of the UK to enhance the attractiveness of the UK as a destination for international investment” [7]. This is a marked shift from the CMA’s previous approach. By shifting the scope of the CMA to promote growth and thus pushing the CMA to be more lenient, the government sets a dangerous precedent for the intervention of politics into the “application of the law” [7]. It thus marks a shift towards what Lord Bingham described as an “exercise of discretion” [7] that we previously discussed. This fundamentally goes against the purpose of a legal system.
The politicisation of the CMA also threatens legal stability in the UK by setting a precedent for government interference in independent regulatory bodies. This undermines the predictability of the law, which the House of Lords cites as fundamental to the rule of law [7]. If the CMA swings its focus every time the governing party changes, depending on how that government wishes to pursue growth, gone would be any semblance of a stable regulatory environment. A stable regulatory environment ultimately drives economic growth, which, paradoxically, is the new goal of the CMA. We need only look at the recent climate-related regulatory shifts in the US to see the effect of a regulatory approach that changes with each new party in power. Donald Trump signed into effect an executive order to “Unleash American Energy” on his first day in office [8]. This resulted in a slowing down of electric vehicle adoption, which damaged companies that had invested in electric vehicles under the previous administration [9]. The unpredictability of changes in the regulatory scheme makes it difficult for companies to take decisive actions, as they have no clear grasp of the legal environment in which they would be operating. Thus, the legal uncertainty generated by the politicization of regulation is not just harmful to the rule of law, but also harmful to businesses that operate under the rule of law. If the Labour government wants the CMA to promote business in the UK, then threatening the stability of a regulatory body is counterproductive.
Finally, these threats to the rule of law in the UK threaten the reputation of the UK’s legal system abroad. The UK is one of the largest legal markets globally, second only to the US [10]. This is in part due to the widespread nature of English common law, which is the basis for 27% of the world's legal jurisdiction [10]. This plays a huge role in the UK’s reputation abroad as a place with a strong rule of law. This reputation drives business and investment in the UK as it shows that the UK is a stable environment in which to do business. A threat to the UK’s rule of law is thus a threat to the reputation of the UK in international markets.
The UK government must take action to improve economic growth in the UK. However, changing the purpose of the CMA risks compromising the independence of the agency and undermining legal systems at large, as well as the broader legal reputation of the UK. This, in turn, undermines the government’s mission of growth and investment in the UK. Instead, the UK government could implement reforms to the CMA to improve its efficiency and expertise without changing the regulator’s central approach to applying the law. The rule of law should ensure that businesses operate under clear, consistent, and accessible regulations. This involves applying the law in a timely manner, employing the appropriate experts to evaluate transactions. However, these improvements can — and must — be made without threatening the fundamental independent fabric of the CMA.
Bibliography
[1] Suzi Ring, Jim Pickarad "How the UK’s competition regulator lost the trust of UK ministers," Financial Times, February 16 2025, https://www.ft.com/content/0cc18c6e-bab5-43de-ae10-d72bbe129294
[2] Doug Gurr. “Three Things the CMA Will Do Differently from Now On.” Financial Times. January 29 2025. https://www.ft.com/content/0ce8ae22-33d5-4bf3-b776-ea670127d97b.
[3] Valentina Romei, Delphine Strauss, and Sam Fleming, “Can Rachel Reeves Boost the UK’s Weak Economic Growth?,” Financial Times, January 29 2025, https://www.ft.com/content/54529cc8-7bf6-425c-8741-042d4eb08af0.
[4] Janan Ganesh, "Britain should stop pretending it wants more economic growth ," Financial Times, January 5th 2025, https://www.ft.com/content/8178b984-cf92-4313-8381-d8e2f6fc7fa0
[5] Competition and Markets Authority, Summary of Final Report (London: Competition and Markets Authority, January 2025), 15, https://assets.publishing.service.gov.uk/media/675146fe9ef923a1bbc97b18/Summary_of_final_r eport_3.pdf
[6] This is a resource that provides information, analysis and research to support the House of Lords, which is a branch of the UK’s government. Their guidance on the rule of law was issued in November of 2024.
[7] Eve Collyer Merritt, "Rule of Law: Principles, Challenges and Government Commitments," House of Lords Library, November 12, 2024, https://lordslibrary.parliament.uk/rule-of-law-principles-challenges-and-government-commitmen ts/.
[8] “Tracking Regulatory Changes in the Second Trump Administration,” Brookings, January 22, 2025, https://www.brookings.edu/articles/tracking-regulatory-changes-in-the-second-trump-administrat ion/.
[9] Larry Avila, “What Trump’s Executive Orders Mean for Automakers,” Automotive Dive, January 22 2025, https://www.automotivedive.com/news/trump-executive-orders-tariffs-evs-emissions-gm-ford/73 7927/.
[10] TheCityUK, "UK Maintains Its Reputation as a World Leader for International Legal Services," TheCityUK, December 10 2024, https://www.thecityuk.com/news/uk-maintains-its-reputation-as-a-world-leader-for-international legal-services/.