David Parker, Director in Frontier’s Competition practice today appeared in the Financial Times warning that the UK Competition and Markets Authority's (CMA) risks undermining business dynamism. 

The CMA’s recent veto on the merger between Microsoft and Activision Blizzard has raised concerns about the authority's stance on promoting competition and growth. While the EU approved the merger, the CMA rejected it due to potential anti-competitive effects in cloud gaming. The CMA's increasing scepticism towards mergers is evident in its veto rate, which rose from 30% between 2013 and 2017 to 57% since 2018. This shift, along with the CMA extending its reach to mergers with limited UK connections and reducing the scope for behavioural remedies, could discourage entrepreneurs from starting businesses in the UK and lead larger companies to avoid acquisitions subject to CMA oversight.   David argued that the CMA's preference for companies to develop their own products or business models may overlook potential merger efficiencies. He suggests that an independent review of the CMA's approach to mergers is necessary to align its direction with the government's goals of fostering business dynamism.

Frontier regularly advises clients on issues relating to the UK Competition and Markets Authority. For more information please contact media@frontier-economics.com, or call +44 (0)20 7031 7000.