Major Developments in UK Competition Policy: What C-Suites Need to Know

Preparing for shifts in public and private competition enforcement actions

The last decade has seen major developments in UK competition policy that make this area a critical business issue for C-suite executives with operations in the country.

The developments fall into two categories: an increase in the scope and extent of public enforcement, with recent signs that this might have reached a high-water mark; and an unrelated but simultaneous spike in private enforcement (i.e. businesses or consumers taking other businesses to court directly, without relying on the competition authority).

Public Enforcement Has Increased—But May Now Be Being Checked

On the public enforcement front, post-Brexit, the UK Competition and Markets Authority (CMA) became one of the most globally consequential competition authorities—both intellectually (in terms of pushing the frontiers of competition law) and practically (in terms of globally significant interventions). However, recent developments suggest that the CMA may (or may need to) be more circumspect in its use of its powers, even as those powers continue to expand.

How did we get here? Prior to Brexit, UK competition authorities had a reputation within the European Union (EU) for supporting the use of economic evidence and robust analysis in competition enforcement, balancing the more interventionist sentiments of other EU members. The Brexit vote disturbed this equilibrium, requiring the CMA to develop an independent position on competition policy matters and freeing the remainder of the EU to develop policy in a more market-sceptical direction, unchecked by the UK’s more economics-based approach.

The changes resulting from Brexit coincided with three other factors: a change in leadership at the CMA; an increasing concern that large digital firms had gained significant power without sufficient regulatory scrutiny; and a period of stagnant real incomes against a backdrop of the austerity regime imposed following the 2008 financial crisis. The CMA’s new leadership appeared to find in Brexit both a significant challenge and opportunity: to influence a global move towards greater competition intervention, targeted particularly at digital firms but with broader applications as well.

From 2016 to 2023–2024, this recalibration manifested itself in two main ways: first, in pushing forward the intellectual case for a paradigm shift in the nature of competition enforcement (in conjunction with similar developments occurring in the US and EU); and second, in enacting its existing powers with greater stringency while arguing for new powers to cover areas it considered regulatory gaps.

Merger Enforcement

From a merger perspective, this shift was most clearly signalled by the prohibition of the proposed merger between Sainsbury’s and Asda in 2019 and confirmed by a large number of subsequent prohibitions. A leading law firm even started to publish a “deal mortality index” to monitor the mounting chance of deals being blocked or abandoned.

The high point of CMA merger intervention occurred between 2021 and 2023, when the agency blocked proposed mergers between Meta and GIPHY and between Microsoft and Activision. The Competition Appeal Tribunal (CAT), the UK’s specialist competition court, upheld the Meta/GIPHY decision. The Microsoft/Activision decision was ultimately abandoned at the appeal stage, with the CMA agreeing to certain behavioural commitments from Microsoft in return for clearance.

The latter case led to a widely held suspicion that there was substantial political pressure on the CMA to avoid a prohibition. Further evidence in support of this hypothesis was provided earlier this year when the new UK government said that it wished to see the CMA operating a pro-growth policy, a pronouncement interpreted by many as code for a less-restrictive merger regime. This direction may be further enhanced following the election of President Trump, given that there may be increased pressure on UK regulators to take a less-aggressive approach to competition enforcement in relation to global US firms.

Antitrust Enforcement

From an antitrust perspective, the CMA from 2016 argued for increased legislative powers, both to allow it greater scope to intervene beyond standard competition powers and to limit appeal options for companies subject to CMA decisions, with the intention of reducing delays in enforcement actions. An example is the CMA’s 2019–2020 Online Platforms and Digital Advertising market study, which recommended that the UK government grant the CMA new powers to regulate large digital firms.

These powers—alongside greater powers in respect of consumer protection concerns—have only come into force this year. Thus far, the CMA has announced that it will open investigations into two big tech firms to determine whether they have “Strategic Market Status” and, if so, what regulation should be applied. The introduction of these powers marks a significant shift for the CMA from being an ex post competition authority to an ex ante regulator in respect of large digital firms, akin to the EU’s orientation with regards to the Digital Markets Act.

As a result, the CMA has gained substantial new powers just as the UK government has warned it should tread more carefully in the application of its existing powers to avoid adverse effects on economic growth (as described above in the merger context). The CMA will need to balance these competing pressures when choosing which areas to prioritise and the nature of any interventions.

Growth in Private Enforcement Is Driven by Standalone Claims

The second significant development in UK competition policy over the last decade has been an extraordinary growth in private enforcement, primarily in standalone competition cases claimants have brought directly to the CAT (and other courts).

This change has been driven by the introduction of an “opt-out” class action regime in October 2015 which is available only for competition law infringements (previously, individual claimants had to opt in to be included in the claim and receive damages). The aim originally was to make it easy for consumers to bring follow-on claims after the CMA had published its findings. For instance, in 2007 the Consumers’ Association brought a claim against suppliers involved in a cartel relating to the sale of replica football shirts, which cost the Consumers’ Association hundreds of thousands of pounds in legal costs, but only a handful of customers signed up to receive the (small individual) damages.

However, the new regime has been characterised by a dramatic surge in “standalone” claims, where liability needs to be established before damages can be calculated. Perhaps unanticipated by legislators, this development has been driven by several reinforcing factors: first, a claimant-friendly disclosure regime; second, an acceptance that cases will need to have litigation funding to be brought; and third, an active and expert claimant bar.

The typical process for bringing such claims is for a claimant firm to i) identify a firm that is likely to be found dominant (at present, large digital firms and ex statutory monopoly utility firms are the typical candidates of choice); ii) identify some aspect of that firm’s behaviour that is considered to give rise to consumer harm, often following a noncompetition regulatory intervention or consumer complaints; and iii) express this concern as a breach of competition law, often as an exploitative abuse of dominance.

About fifty cases are pending at the CAT, with more being published on a regular basis. The first of these cases have just started to be heard at the full trial stage. Large firms will likely need to factor into their strategic plans the potential for opt-out class actions to be brought against them.

Competition Enforcement Is a C-Suite Issue

While the tide appears to have receded somewhat from the high-water mark of merger intervention, firms now face a regulator with increased powers to intervene in digital markets and on consumer protection issues, as well as an extremely active private enforcement regime.

UK competition law matters will therefore continue to be C-suite issues in the next decade, both for UK firms and for global firms doing business in the UK.