REVIEW: The CMA – Reflections on the First Year, A speech by Alex Chisholm (Chief Executive), King’s College London, 30 March 2014.

Christy Burzio, LLB, LLM, BVC, AciARB, PhD Candidate at King’s College London

I was extremely intrigued to be invited to this event, not only was it going to provide a reflective summary of what the Competition and Markets Authority (‘CMA’) had achieved in the last year, it was also a rare opportunity to see its progress through the eyes of the man at its helm, Alex Chisholm, who is the current acting Chief Executive of the CMA. Notably, the perfect timing of this speech was not lost on me; the CMA published its Annual Plan 2015-2016 days before on 24 March 2015.[1]

My PhD is very critical of some of the current leniency policy it adopts, so I came armed, like any good quasi academic-journalist on this occasion, to uncover some key areas of interest that were spoken about beyond the pre-prepared speech that you can find here:

The predominant question that needed to be answered was, as Alex pertinently described whilst quoting a well-known QC: had the CMA achieved turning an ‘ugly ducking into a beautiful swan?’ Whilst Alex structured his speech as transition, impact and people, I’m going to shape mine like the quoted Danish poet Hans Christian Andersen (it was Easter time after all).

The Ugly Duckling

The competition landscape, before the CMA, was made up of two powerhouse institutions, the Competition Commission (‘CC’) and the Office of Fair trading (‘OFT’). Whilst effecting what was regarded as a world class competition scheme, the government undertook a Competition Regime Review in March 2011. There were concerns about key elements of the dual regime, including; its efficiency and the regulatory burdens of a dual body relationship between market studies (phase 1) and market investigations (phase 2), difficulties in successfully prosecuting antitrust cartels at reasonable cost, in reasonable time, and the scope for delivering a streamlined and consistent decision-making process.[2] The report continually stressed that efficient resource allocation was the key to a successful competition regime. This is unsurprising considering the ‘10:1 target’, which dictates that for every £1 spent, agencies should generate £10 of direct benefit for the consumer.[3] Bill Kovacic, CMA board member and new Head of Competition Law at King’s College London, has pronounced that this ongoing framework is the most demanding in the world.


On 1 April 2014, the CMA was established under the Enterprise and Regulatory Reform Act 2013 (‘ERRA 2013’). It effectively abolished the CC and OFT to merge the two agencies into one authority. By definition the CMA is to be regarded as an independent non-ministerial department. It’s ambit therefore being under section 25(3) that ‘the CMA must seek to promote competition, both within and outside the United Kingdom, for the benefit of consumers’. The CMA has added the caveat that its aim ‘is to make markets work well for, consumers, business and the economy’ (emphasis added). In Alex’s introduction, as the new CMA Chief Executive Designate in July 2013, he laid out his priorities as being ‘to preserve the considerable strength of existing competition institutions, and to take full advantage of the potential offered by a new unitary authority with a reformed landscape’. His headlined focus was a) determined and effective enforcement, b) a single powerful competition advocate, c) faster, less burdensome and more transparent and d) a robust decision-maker.

  • Highlights

Alex, presented numerous points on his reflections of the CMA’s first year, however I have detailed the ones I found most important and relevant to this forum.

Firstly, the 10:1 target is being met with force, following investigations in the last year the CMA has proposed remedies that will tackle competition problems that have caused consumer detriment of up to £124million in the private motor insurance market, £174million in the private healthcare market and £85million in the payday lending market. Whilst extremely impressive, it was not highlighted or left clear whether the 10:1 target had in fact been met, however previously  the CMA publicly stressed that this benchmark should be viewed as an aim rather than a target.

Secondly, the CMA has fully respected the 2 phase separation between phase 1 and 2 scrutiny of markets and mergers, with fresh decision makers at the second stage. They have also implemented the Case Decision Group (‘CDG’) which, analyses cases after the issue of the statement of objections, reviews the evidence and listens directly to the arguments of the parties at oral hearings. Notably Alex was keen to highlight that the Global Investigation Review’s 2015 due process guide gave the CMA an A- exam mark, which sets it at 5th place.[4] What resonated with me was Alex stating that when dealing with an investigation the CMA seeks to ‘look at the evidence without trying to satisfy the cause’. This statement alone echoes the sentiments of an independent agency detached from the political pillars of government, a mantra to stay true to especially when dealing with high profile cases.

Thirdly, the CMA has undertaken 3 market investigations and completed a market study into the property management services, which has in turn increased protection for leaseholders. Notably this year was the first concluded criminal cartel case, which was fought over three years, starting at the OFT. It resulted in 9 criminal convictions and 5 custodial sentences and it is with anticipation that we now await the CMA’s pursuit of recovery under the Proceeds of Crime legislation. Markedly, the CMA is currently investigating the highly debated energy market, whose final report is expected in November/December 2015.[5]

Finally, I have always been concerned over the lack of clarity of competition regimes in regards to its end purpose, is it taking a deontological, utilitarian, or a consequentialist approach?  The question being, who is it run for? The ERRA 2013 clearly states the ‘benefit of the consumer’, but the CMA website states consumers, business and the economy. So which is it? Just the one or all three? Alex’s speech certainly emphasised that the CMA puts consumers at the heart of everything they do, embedding this perspective in every team and every case, as evidenced in its Consumer Protection Partnership and taking on the presidency of the International Consumer Protection and Enforcement Network (ICPEN). However, upon questioning Alex stated that the CMA has extended its statutory duty to consumers, to reflect the nexus between competition, business and national economic performance. The view in conclusion being that all three factors were and are equally important.

The Beautiful Swan?

Unfortunately, I cannot look upon the CMA and see a beautiful swan or an ugly duckling in definitive terms. It was given an uphill task to really justify itself to so many stakeholders that I would consider it more of a grounded Takahe than a free flying Swan. Its directive is broad, and as evidenced is ever extending, so it would be hard to state whether in summation it is meeting its statutory mandate. However, the strides it has made in a year is astounding, no other organisation can really match its first year success in terms of focus. It has stayed true to the essence of what a National Competition Authority should be and is valuing quality in its process over results, although its portfolio is no doubt envied across the continent.

The difficult road for the CMA does not end here, its 2015-2016 Action plan is equally as ambitious to the one preceding it, therefore only time will tell whether this analogous bird, in whatever form it decides to take, will truly flourish.





[3] Even though the CMA has adopted the 10:1 benchmark, it is still amasses enormous scrutiny as indirect benefits are hard to quantify on this scale.