The 2025 UK Government’s Strategic Steer to the CMA: The Beginning of a New Era for the UK Antitrust Watchdog

The UK government recently issued its draft strategic steer to the UK Competition and Markets Authority (CMA), in which it sets out its expectations for the CMA’s enforcement actions in relation to the government’s primary mission for economic growth. This LawFlash discusses what the government strategic steer is and why it is important, the CMA’s proposals in response, and the likely implications for the CMA’s future enforcement, especially in light of the Digital Markets, Competition and Consumers Act (DMCC), which will take effect in April 2025.

For further information on the CMA’s new consumer powers, refer to our prior LawFlash.

The government has opened a consultation on the draft strategic steer, due to close on March 6, 2025. Industry stakeholders are expected to welcome the draft’s contents, and the results of the consultation will affect the CMA’s annual plan, setting out the authority’s priorities for the years 2025/2026, which will be issued by the end of March.

WHAT IS THE STRATEGIC STEER AND WHY DOES IT MATTER?

For each parliament, the government issues a “strategic steer,” setting out its priorities and the expected (re)actions from the CMA. While the steer is not binding, this year is notable as it contradicts many of the expectations raised in the strategic steer issued by the preceding government, with a focus on economic growth.

The previous government had invited the CMA to “act as a thought leader at home and abroad … using its post-Brexit role to shape international debate” and to “be a strong independent voice.” On the contrary, the new government recommends that the CMA “support and contribute to the overriding national priority of … economic growth” and “consider the actions being taken by competition and/or consumer protection agencies in other jurisdictions, and … seek to ensure parallel regulatory action.”

The significant contrast between the contents of the two strategic steers is likely to result in a shift in the CMA enforcement processes and priorities.

NEW STRATEGIC STEER FOR ECONOMIC GROWTH

The new strategic steer reflects the new labour government’s key policy aim of economic growth, and the CMA is directed to do the following:

• Use its tools proportionately, with growth and investment in mind, and give appropriate consideration to:
  • pro-growth and pro-investment interventions,
  • focusing on markets and harms that particularly impact UK-based consumer and businesses,
  • supporting growth and international competitiveness in the industrial strategy’s eight key sectors,[1] and
  • consider the actions being taken on the same issues by other regulators, and where appropriate, seek to ensure that parallel regulatory action is timely, coherent and avoids duplication where these parallel actions address issues arising in markets in the United Kingdom. This will be of particular importance in merger reviews (see below), and the use of the new DMCC regime, which in part mirrors the EU’s Digital Markets Act, and in practice is likely to target similar companies, products, and services. In addition, the CMA should use its direct consumer enforcement powers under the DMCC in an appropriate manner by growing the economy through promoting consumer trust and confidence, while deterring poor corporate practice.
• Minimize uncertainty by engaging with those affected by the CMA’s work by providing transparent, timely, predictable, and responsive engagement with businesses to enable them to engage quickly and effectively with the CMA. As part of this, the government makes it clear that “the CMA should review procedural guidance and practice to make it accessible and meaningful to business.” The CMA should also continue to demonstrate how competition improves consumer outcomes, innovation, investment, and economic growth.
• Engage with government and accountability. The steer sets out that the CMA should continue to engage with the government on key policy issues and identify where the CMA can support the agenda of the government.

THE CMA’S REACTION

Right before the publication of the strategic steer, the CMA’s head Sarah Cardell released a lengthy blog post setting out several proposals, with the aim of aligning the CMA’s enforcement of policies and priorities with the expectations of the new government.

The proposals seek to reshape the CMA’s work in line with four core values: pace, predictability, proportionality, and process, with the final objective of driving growth and (foreign) investment in the United Kingdom. The CMA will launch consultations in the upcoming months on important matters. In March, the CMA will initiate a review of its approach to remedies, while in June, the CMA will launch a consultation on updated guidance on the CMA’s interpretation of the concepts of “material influence” and “share of supply.”

Among the proposals listed by Cardell, a few stand out, especially regarding the merger clearance process.

First, the CMA intends to establish a new key performance indicator to complete pre-notification phases within 40 working days, against the current average of 65 working days. This would bring the pre-notification period length back to the average it was at a few years ago. This reduction in time is welcome, if it speeds up the overall time of obtaining an approval decision. However, the pre-notification period should serve to identify and resolve any potential issues prior to filing, with the aim of a straightforward review at Phase I and a shorter overall time period to obtain merger control clearance (even with a longer pre-notification period). Achieving this key performance indicator should not be the reason for longer and more complex Phase I reviews.

Second, the CMA plans to clear straightforward Phase I mergers in just 25 working days as opposed to the current 35 working days, thus bringing the duration of Phase I in line with other authorities, such as the European Commission. However, unlike the European Commission (or other authorities) the CMA has a voluntary merger regime and does not have a short form filing process. In 2024, the CMA reviewed, formally or informally, around 1,000 mergers, out of which only 38 transactions were investigated in Phase I. The CMA’s approach is therefore already quite streamlined, and it will be interesting to see whether the new guidance will further lower the number of mergers formally investigated. We currently expect that this change is only likely to apply to a limited number of cases, as the CMA can already “weed” out straightforward transactions at an early stage in the process, often leaving it with more complex cases to review which are more likely to take 35 working days to review.

Third, as a matter of policy, the CMA will likely focus more on mergers that have a “distinct and direct” impact on UK consumers, while de-prioritizing international mergers in which any negative effects on the UK market could be pre-empted by the action of competition authorities of other jurisdictions.

The revised guidance that the CMA will issue on the interpretation of the notions of “material influence” and “share of supply” will also provide important indications on which mergers will likely be scrutinized in the future and may influence the number of mergers that the CMA reviews.

The CMA will also hold a consultation in March to test and reshape its approach to remedies. This will possibly make the CMA open to consider the merits of behavioral remedies against the mere divestiture of stand-alone businesses, and to take a more nuanced approach, which will mean tailoring remedies on a case-by-case basis.

Finally, the CMA plans to publish a new Merger Charter, with the aim of providing businesses with a better understanding of the actions the CMA undertakes throughout the merger review process. Along with the publication of the Charter, the CMA is committing to lower barriers between businesses and the regulators by ensuring that meetings at the senior level will happen early in the review process.

All these proposals are to be welcomed and show an encouraging shift from the CMA to a more business-friendly approach.