David Currie on the CMA’s progress towards its ambition

Speech given by CMA Chairman, David Currie, at The Interdisciplinary Centre for Competition Law and Policy (ICC), Queen Mary University of London.

David Currie photo

Making markets work well for consumers, businesses and the UK economy

It is a great pleasure to be here this evening. My links to Queen Mary go back some way: I was appointed as a lecturer in economics in the autumn of 1972, when the department was headed by Professor Maurice Peston, later Lord Peston, who sadly died earlier this year. Maurice became a mentor to me, and helped me enjoy a rapid rise, first to Reader, then Professor, then Dean of the Faculty of Social Studies and Governor. And Queen Mary, then Queen Mary and Westfield College, did me the honour of making me an Honorary Fellow. My period as Dean coincided with Sir Keith Joseph’s misguided assault on the social sciences. In the period of my Deanship all the departments in the faculty expanded – something that seems less remarkable when I tell you that there were just 3 departments.

In those days, one of my colleagues in the Law Faculty was Professor Roy Goode, the founder of the Centre for Commercial Law Studies, now Emeritus Professor of Law at the University of Oxford, though still very much linked to the Centre here. Roy was adept at raising funding for chairs in commercial law, in fields where hitherto there was no academic work. A good example was when he raised money to fund a chair in banking law. Incredible though it seems from today’s perspective, it was then hard to identify a suitable candidate to fill the chair. After some 2 years’ search we finally found someone who was willing to turn their talents to this area of law, and that helped to develop academic legal study of this vital field. Roy repeated that trick many times and in many different fields of commercial law. It is wonderful to see the Centre continues to thrive more than 35 years later.

And in that context of how important institutions evolve, I would like this evening to review the record of the Competition and Markets Authority (CMA) which I chair. The CMA was formed from the merger of 2 well-regarded predecessor competition agencies, the Office of Fair Trading (OFT) and the Competition Commission (CC), and assumed its powers in April 2014. It is fair to say that there was a good deal of scepticism before and at the time of the merger as to its rationale. It is therefore appropriate at this point, when we have been exercising our powers for coming up to 3 years, to make an interim judgement on success or otherwise. Many mergers fail to deliver, both in the private and public sectors. What can be said about the record of the CMA?

I want to start by reviewing the various different ways in which our performance is judged already. Each of these capture aspects of the work of the CMA, but each is also partial in ways that I will explain, often focusing on particular tools in our armoury rather than the full deployment of these tools in combination. I then want to go on to present a more holistic assessment of our record, and illustrate that in 2 ways: looking at certain key sectors where our different tools work together; and then considering that record through the prism of the experience of consumers.

Becoming a world-leading competition and consumer agency

Our stated ambition is for the CMA to be a world-leading competition and consumer agency. I will come back later to unpack what this means. But in the light of this ambition, it is quite natural to turn to comparisons of international agencies and league tables. In practice there are few such surveys, but one such is by the respected journal Global Competition Review (GCR), which every year ranks competition agencies around the world, drawing on input from competition experts and practitioners. The CC before the merger was ranked as 5 star, a rating which the CMA did not achieve in 2015, and with GCR commenting that it was ‘a slow year for behavioural enforcement’ at the CMA and that ‘the general verdict is that the CMA simply needs to do more in 2016’. That was a view echoed by the National Audit Office (NAO) in its report on the UK competition regime published in February of this year, when it said that ‘the regime faces big challenges in increasing the low number of enforcement decisions to date’. These comments are fair, and I will come back to them. But it is important to note that the GCR ranking, because of the journal’s particular area of interest, excludes significant parts of the work of the CMA: our consumer protection work, for example, and all of our markets work, which a number of our overseas counterparts do not undertake. A major part of the work of the CMA in its first 2 years was the 2 market inquiries into the energy and retail banking markets, so any overall judgment that ignores these significant pieces of work misses an important contribution the CMA has made to millions of households and businesses across the UK.

Another metric by which we are judged is the ratio of consumer benefit to our costs, and we have the government-set target, which we have comfortably exceeded, of delivering £10 of consumer benefit for each £1 that we cost. I find this a useful target to have, because it touches directly on value-for-money for the taxpayers who fund us and provides a strong reason for not cutting, and indeed increasing, our budget. But it too provides only a partial picture. For it measures only the direct impact of our interventions on consumers and consequently mainly measures the benefits from our markets work, and rather little benefit from our enforcement and mergers work – almost the opposite measurement to GCR. This is because the indirect but critical deterrent effects of an effective enforcement and merger regime are not captured (1). That is why, though we welcome this target, we do not allow it to drive our strategy, otherwise we would focus all our resources on markets, at the expense of enforcement – not the right answer.

The NAO reviews of the competition and consumer regimes – the former I mentioned earlier; the latter which was published only this morning – provide an important assessment of how these are working as a whole. But it is important to note that these are not an assessment of the performance of the CMA alone (though that is part of them) but rather how the regime as a whole, with its multiple actors, is working. For example, the review of the competition regime includes an assessment of how the concurrency regime with the sector regulators is working.

Then, of course, we are given by the Department for Business, Energy & Industrial Strategy (BEIS) and HM Treasury (our sponsoring departments) a set of annual quantitative targets (including the 10 to 1) in the form of a performance framework, together with a broad directional strategic steer for each parliament. The steer is not binding: we are required to have regard to it. But it is useful because it is given to us after full discussion and public consultation. But the key point is that it is a guide, not a performance measure: we could honour the steer and also hit our annual numerical targets yet still not be performing as well as we can and should.

Ultimately we have multiple stakeholders who we interact with on many different dimensions. They observe us close-up in our interactions with them. We also have a very talented, professional staff who set exacting standards. For me, the test of our success is whether these 2 groups of people think that the CMA is doing a great job, not just in the short term over a run of years. We will do things that are not favoured by some, and we will make mistakes from which we will learn. But the opinions of our external stakeholders and our own staff really matter. That is why we pay such close attention to our annual staff survey, and why we solicit the views of our external stakeholders periodically, and intend to do so again next year. For me a key mark of success is if external stakeholders look back on the merger which created the CMA and say that despite the disruption the merger was worthwhile; and if our staff look back and say that it has been worth the considerable uncertainty and anxiety that the process inevitably entailed. I am quietly confident that we will score on both these criteria.

So what does it really mean to be a world-leading competition and consumer agency?

There are myriad criteria by which one could determine what it means to be a world-leading competition and consumer agency.

We’ve done some research into different perspectives and have found a range of objectives and outcomes for a world-leading agency to achieve. Naturally, these include hard measures, such as high throughput of cases, large fines and high prosecution success rates. There is some debate over the value of hard measures, which focus on output and activity-based measures, including by CMA board member William Kovacic, as they ascribe insufficient importance to non-litigation activity, and can shift a competition agency’s focus away from outcomes.

So softer measures are also important in establishing what it means to be a world-leading agency. For example, having a tangible influence over government policy and legislation, being a thought-leader and at the forefront of competition policy development, and making judicious use of non-litigation activities such as awareness-raising, or voluntary agreements alongside traditional enforcement tools.

At the CMA, one of our principal aims, which permeates most of our work, is to foster a competition culture across the UK. In such a culture, the value of competition for protecting consumers and for the economy is widely recognised by businesses, consumers, citizens, government and opinion-formers. In such a culture, breaking competition and consumer law by colluding with other businesses, by abusing a dominant position, or by not treating customers fairly, is seen as ethically wrong, akin to fraud, bribery and corruption. And in such a culture, people buying goods and services are competition-conscious, and understand and assert their rights. An agency that makes major leaps towards this would surely be world-leading, regardless of exactly how many cases it runs or the grand total of its fines.

In 2012, Peter Freeman, former Chairman of the CC, set out 9 criteria for judging our success, namely:

  • use of competition powers in the most flexible and dynamic way
  • more efficient and effective use of scarce public resources
  • a single, powerful advocate for competition in the UK, in Europe and internationally
  • enhancing predictability and consistency
  • eliminating overlaps between current processes
  • a strong focus on competition expertise and capability
  • a more streamlined approach in decision-making through stronger case management
  • faster, less burdensome processes for business
  • CMA leadership in competition for sector regulators

These criteria, many of which apply equally to our important consumer work, and the other success measures I have highlighted, mirror the ambitions we held for the CMA when we first took up the reins. And they continue to focus our minds on what we want to achieve and how we want to achieve it.

What progress have we made towards this ambition?

I believe that the CMA is making good progress in its journey towards achieving its ambition, but there is still much more to do.

We’ve stepped up our enforcement of competition and consumer law – penalising those who break the law and securing better protections for consumers. This includes issuing over £140 million in fines in 2016, compared with a total of £1.2 million in 2015. And we’ve built on our enforcement cases with targeted communications to businesses working in relevant sector, to help to create that competition culture I just spoke about.

We’ve embedded an efficient and effective merger control process, finding new ways to make both phases work well under one roof – which I will return to later.

We are implementing important decisions in 2 of the biggest market investigations ever undertaken by a UK competition authority, which will lead to an enduring impact for households and businesses across the UK.

And our other tools allow us to make a big difference to the lives of ordinary people across the UK.

Take our role in regulatory appeals. Whilst arguably less glamorous than our enforcement and market investigation work and somewhat obscure to the casual observer, they bring us into huge consumer markets and our decisions affect millions of consumers and billions of pounds of investment. The stability and predictability we provide is welcome to investors, notably overseas investors, and important to the economy and the UK’s outstanding record of inward direct investment.

Overall, using the 10 to 1 ratio methodology, we have so far delivered over £1.4 billion of direct financial benefit to consumers – exceeding that 10 to 1 target in both years and carrying out work which affects millions of households and businesses. And this doesn’t yet include the impact of our work in this current financial year.

Ultimately, we are keeping our focus on doing the right thing for consumers rather than trying to always please the many and diverse stakeholders who take an interest in our work.

What difference are we making by being joined up?

The merger of the OFT and CC presented us with opportunities to approach previously-separate work – but with the same overall purpose, to make markets work well – in a more holistic way. And I believe that as a single entity we can, and are being, more than the sum of our predecessor organisations.

Let me give the example of how we investigate mergers. Under the previous regime, the OFT would carry out the initial investigation. If the OFT found that the merger may give rise to competition concerns and that the merging parties could not or would not offer undertakings to address those concerns, it would refer the merger to the CC for a more in-depth examination.

Bringing these 2 phases under one roof has allowed the CMA to use the combined resources and expertise of our predecessors, supplemented by excellent new expertise recruited to our organisation, to develop an efficient end to end approach and promote a more flexible, targeted and holistic approach to merger control. Processes are more streamlined and a degree of staff transition between the phases prevents duplication and waste.

We can also more straightforwardly fast-track cases from phase 1 to phase 2, as we have done in the BT/EE and Ladbrokes/Coral mergers. These mergers were so complex and on such a large scale that we established early on that a significant lessening of competition was a realistic prospect. Fast-tracking, under the same institutional roof, allowed us to begin the in-depth phase 2 review as soon as possible and achieve direct efficiency gains. We could better focus on how we gather evidence, use our mergers staff more efficiently, reduce the duplication of discussing the same complex issues in detail with 2 sets of decision-makers, and minimise the amount of time it takes to reach an outcome for consumers and the businesses involved.

A second example is how we design, test, implement and monitor remedies arising from our merger and market investigations.

Under the previous regime, there were multiple interfaces between the OFT and CC, which could lead to duplication, to delays in decisions, and to additional burdens on businesses. As a single organisation, we have ensured better continuity in the handling of remedies throughout their lifetime, as well as more opportunities for proactive remedy reviews. We can use feedback from one stage to inform another, such as applying lessons from our monitoring work to improve how we design new remedies which reflect a clearer understanding of actual consumer behaviour and thus have a better chance of addressing the problems we are trying to solve or prevent.

We can also be better joined up between the different parts of our toolkit. As a simple example, a call for information into online reviews and endorsements flushed out 3 successful enforcement cases.

And we regard our competition and our consumer work as complementary. Whilst the underpinning legislation is different, it is a false distinction from a consumer’s perspective. It matters not what tool or law we use to help them get a better deal and ensure they are treated fairly.

A market-by-market view of the CMA

There are other ways for us to examine our work holistically, by exploring different clusters of casework.

Take online markets and transactions, which represent an already large and growing part of the economy, accounting for £118 billion gross value added (GVA) in 2014, which is 7% of total GVA across all economic activities in the UK. Consequently, the digital world has featured in much of our work. We have carried out enforcement against online collusion and resale price maintenance. We’ve secured undertakings from major companies such as Google and BT to provide fairer contract terms for their cloud storage customers, and from a range of other companies following our work into online reviews and endorsements. And we recently launched a new consumer law enforcement case in online gambling.

In markets, the potential to unlock a fundamental digital transformation of the banking market is a foundation of our remedies in the retail banking market investigation. And in light of the importance of customer switching as a way to force businesses to up their game, we launched a new market study into digital comparison tools like price comparison websites.

We fulfilled our role as an expert advocate for competition to policymakers, advising on how to ensure that regulatory frameworks, for example regarding taxis, allow disruptive business models that harness the opportunities of the interconnected digital world to develop, while ensuring consumers remain adequately protected by regulations that are truly necessary (and no wider than necessary) for such protection.

And in addition to these areas that we chose to investigate, we have carried out work which we are required by statute to do in a sector underpinning all digital markets, when we reviewed the BT/EE merger and conducted 2 telecoms regulatory appeals.

A second cluster is our work in regulated sectors, which provide essential services to virtually all households and businesses in the country. This of course includes our market investigations in to energy and retail banking, but also our market studies into legal services and most recently care homes.

A further cluster is our work in the pharmaceutical sector. Having imposed £45 million fines in February against GSK and a number of generic drug suppliers in in the pay-for-delay case, we fined Pfizer and Flynn Pharma nearly £90 million for charging excessive prices to the NHS for an anti-epilepsy drug. Both cases are currently subject to appeal, but through these and other pharma cases, of which we have several ongoing, we are determined to crack down on any anti-competitive behaviour by pharmaceutical firms and to protect customers, including the NHS and thus taxpayers, from being exploited.

Moving on from clusters of cases by different sectors, there are other ways to view our work holistically.

What does the consumer see?

The CMA exists to promote competition and make markets work well for the benefit of consumers – although in many cases businesses, especially SMEs, also benefit. It is our core role to ensure that consumers get a fair deal when buying goods and services, so the difference we make for consumers across the UK, regardless of which part of our toolkit we use, is paramount.

So what better way to think about our work in a holistic way than to envisage it through the eyes of a consumer?

Taking but a few examples, since we assumed our powers in April 2014, our work has taken us into important parts of millions of people’s lives: how they bank, buy their gas and electricity, how they insure their car at home and hire one abroad, how they get legal representation, find the right deal through price comparison websites, and how they know they’re not being misled when doing the weekly grocery shop.

And we won’t shy away from stepping in to ensure that vulnerable consumers, or people buying goods and services at vulnerable times, are protected. There are cases where unlocking competition alone will not safeguard consumer welfare, at least not in the short-term. In such circumstances, a more direct regulatory intervention can be necessary, such as the price cap we have imposed for pre-payment customers in the energy market. Our primary duty is to promote competition for the benefit of consumers but this does not and should not mean that our interventions are restricted solely to those which make markets more competitive, where safeguarding consumer welfare requires a more explicit safeguard.

But there is balance to be struck and it is important that a short-termist, seemingly-populist intervention is not chosen over one which will help to ensure sustained improvement to a market in consumers’ interests over the long term.

The CMA is well-placed to find this balance. The independence, rigour and transparency of our operations allow us to determine the best solution to the issues which consumers, and small businesses, may be suffering in a given market.


My proposition this evening is that a judgement on the performance of the CMA should be based on an examination of all parts of the agency, some of which are much less in the public eye – and also on its overall impact for consumers, businesses and the UK economy, rather than simply counting or comparing numbers. I have tried to convey the full range of our work, and the way the impacts of our different tools work synergistically together. I have also suggested that the merger that created us has generated many benefits to the performance of the competition regime, several of which not anticipated in advance. And although it is too early to reach a considered judgement on the success of the CMA, I think it would be fair to claim good signs of progress.

But perhaps I can give the last word to Peter Freeman, who I quoted earlier. In a retrospective review of the development of the UK competition regime (remember – only part of the CMA remit) to mark the 25th anniversary of the Regulatory Policy Institute at Oxford (2), he said:

Whilst it is still early days, the CMA has already achieved a lot. It has instituted better processes and decision-making in antitrust cases, given greater emphasis to antitrust cases, conducted 2 very large market investigations, and improved the process of merger control, all with the vital phase 2 assessments still carried out by panels able to reach their own conclusions, independent of any other part of the CMA … The CMA was set a difficult task. It has expended much effort and made considerable progress. But it is unlikely that the task of transition is yet complete.

This last point is absolutely right: the CMA continues to learn and develop, and I hope will always do so. But coming from a critic of the reforms, I take that measured and balanced statement as praise. Thank you (3).


  1. Although such quantification is difficult and controversial, several studies suggest the economic benefit is several orders of magnitude more than the costs incurred.
  2. Peter Freeman, ‘Better to Travel hopefully than to arrive? The Reform of UK Competition Law 1991-2016’, the Zeeman Lecture, Regulatory Policy Institute, Merton College Oxford, September 2016.
  3. I am grateful to Simon Jolley for his considerable help with the drafting of this speech.
Published 16 December 2016