GovWire

First, thanks to the British Institute of International and Comparative Law for the opportunity to open todays event.?

Particular thanks also to Linklaters, not just for sponsoring but for being kind enough to train me before I made something of a left-hand turn in my career and moved into politics. Particular thanks for the relentless 6 months I spent on the RBS / ABN AMRO acquisition, working late into the night, photocopying away.

Joking aside, Im convinced this left a lasting impression, because I have been drawn again and again to competition, and its integral role in our economy, over the course of my career.

I saw, first-hand, the dynamics of an emerging clean tech and renewables industry, battling dominant incumbents to drive disruption and innovation in a complex, shifting policy landscape.

In telecoms, I campaigned for separate legal status for the nations main network infrastructure (a decision later taken by Ofcom), on the basis that full ownership by the largest incumbent firm was not the most conducive route to the innovation and investment we desperately need in a 21st century digital economy.

Further down the road, I developed a keen focus on digital, data and AI. Both the unprecedented impact of these extraordinary technologies and new markets and also, the fundamental questions they raise about market power and societal impact.

Now, 18 years after that competition seat at Links, I find myself at the Competition and Markets Authority, doing the most stimulating and fulfilling work of my career, speaking to a room of people whose deep expertise and shared respect for the rule of law are fundamental to the fabric of international legal discourse in this area.

It is a huge privilege.

Today, I want to talk about 3 related topics, all key facets of how competition can drive a more prosperous, stable future for the UK.

• first, the role of competition, and the CMA, in driving economic growth for the UK

• second, how the CMA is approaching the incoming digital markets competition regime

• and finally, our work on artificial intelligence

Firstly, Competition and growth.

Everyone in this room will be more than familiar with the purpose of the CMA, to help people, businesses, and the UK economy by promoting competitive markets and tackling unfair behaviour.

And this reflects our mandate from Parliament: to promote competition, within and outside the UK, for the benefit of consumers.

But in the context of an urgent national growth mission, a shared endeavour in which all arms of government must play an active and committed role, that link between competition and wider benefits across our economy particularly matters. And the role of the CMA in contributing to that mission, matters more than ever.

So, Id like to explore these benefits, in particular that relationship between competition and growth.

The founding principle at the heart of competition policy is that the power of markets, underpinned by competitive rivalry between firms, can be harnessed to drive progress. And that progress translates into far-reaching benefits for consumers, businesses and ultimately our economy.

I believe it, because Ive experienced it from both sides.

Working for startups and challengers Ive seen first-hand the spark in the entrepreneurs eye when they spot an opportunity to disrupt the status quo, to build something new, better, than whats on offer now.

Ive also seen large global incumbents galvanised into action rediscovering their pioneering spirit, and combining it with deep resources, to meet a competitive challenge. Its in these moments of healthy tension that progress happens.

Academic evidence and history bear out the proposition that fair, open, effective competition is a proven route to a higher growth economy.

Where competition is stronger productivity and wage growth will be higher, as businesses strive to deliver better value.

Where businesses battle to deliver higher quality products and services consumer confidence is bolstered. Particularly when backed by strong consumer protection that protects people from exploitation and puts money back in peoples pockets to disperse across the economy.

When markets are truly contestable, and start-ups and challengers know they have a fair shot at success, innovation and entrepreneurialism flourish - bringing fresh ideas and better solutions to market.

When investors can have confidence in a level playing field for the companies they back capital flows, creating a virtuous cycle of investment and improvement.

When, through robust enforcement action, we hold to account the small minority of businesses who dont play by the rules we create the trust and integrity that markets need to thrive.

And when we have diversity and choice, we also have enhanced security of supply and resilience, which underpins a strong, self-reliant economy, bolstered from shocks and uncertainty.

Importantly, all of these scenarios foster an environment where both large established players, and smaller ones can thrive.

Competition is not a zero-sum game. In fact, it can create value for multiple parties.

And all of this is why productive and sustainable growth across the UK economy has been an explicit, core pillar of the CMAs strategy since early 2023.

Launched under new leadership, this mid to long term strategy made clear that competition itself is not the goal. The goal is the outcomes it can deliver for people, businesses and the UK economy, with growth a central ambition among these.

The positive role of competition for our economy is clear across all our tools. Including targeted work weve prioritised because of the impact it has on growth.

Ill give you just a few examples:

• markets work in cross-economy sectors foundational to growth - like critical infrastructure, where the recommendations of our market study into housebuilding are now being carried forward by government. Or our ongoing investigation into cloud services - a sector that has become the backbone of modern digital economies

• deploying our competition enforcement powers where they can help relieve pressure on public finances, like leveraging our data, AI and bid rigging expertise to root out illegal practices in public sector procurement - with potential taxpayer savings of billions of pounds

• flagship research into competition in UK labour markets by our specialist Microeconomics Unit, with important implications for wage growth, productivity, and innovation - and now a new Growth Programme from that Unit, focused on critical drivers and blockers of growth, as well as the role of competition in industrial strategy

• we engage in proactive, frank conversations with the business community, more than ever in the CMAs history, to understand the views of these critical stakeholders on the role of competition in driving growth for the UK - particularly investors and startups, with whom we have been strengthening our dialogue and have plans to do much more

• weve heard from this community directly about the barriers to the investment the UK needs to drive growth - among these: access to skills and talent, lengthy processes and costs related to critical enablers (like infrastructure and utilities), policy and political stability, access to capital, and the UKs risk appetite

• weve heard that barriers to fair and open competition can deter investment and weve also had constructive discussions around the competition regime - including how the CMA can continue to progress and evolve to the best in class offering we strive for

And in this regard, its worth touching on our landmark Phase 2 merger reforms, just now coming into effect in the first case. Reforms were confident will deliver a step change in experience for stakeholders. In transparency. Efficiency. Open, constructive engagement including around remedies.

Because the merger regime too, plays a role in delivering some of the key benefits of competition which foster a pro-growth environment.

Maintaining open and competitive markets to incentivise productivity and shore up security of supply. Safeguarding innovation and organic growth, with healthy returns for UK businesses and their backers.

Recognising, as the regime is designed to do, that the vast majority of mergers are unproblematic from a competition perspective. And can yield benefits, like economies of scale or improved resource access.

Allowing the CMA to focus in on a remaining handful of truly problematic cases each year. And there apply an objective, evidence-based approach to protecting consumers and business customers from the harms flowing from red

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