The role of competition in promoting growth and innovation in the UK
Source: gov.uk (2025-03-25)

A speech by Jessica Lennard, CMA Chief Strategy & External Affairs Officer

Good morning.

I’m Jessica Lennard and I’m the Chief Strategy Officer at the UK Competition and Markets Authority.

Normally, I’d start with who we are. And I’ll come to that. But let me reframe things for a moment and start with who you are, and thanks to HSBC and Atomico for many of the insights I’m about to draw on.

You are part of a European tech industry which contributes over €1.5 trillion - or more than 8% - to European economic output.

With a tenfold increase in venture capital, and a 24% compound annual growth rate in tech talent since 2015, you are quite simply - the growth champions of European industry.

And for those of you based in the UK - you’re part of a tech sector that’s grown by 20% since 2023 and is now worth $1.2 trillion dollars in enterprise value.

You are the driving force behind the largest innovation economy in Europe - and the third globally, behind only the US and China.

Maybe you’re even one of the 181 unicorns valued at over a billion dollars. Footnote 1 (#Footnote-1)

And if you’re in AI - you’re driving a wave of innovation worth up to 47 billion pounds in potential productivity gains for the UK, each year, over a decade. Footnote 2 (#Footnote-2)

You are of critical national importance to our future prosperity. And I know you’re nowhere near done yet.

But, (I can see some of you waiting for the ‘but’) of course, I know there are major challenges ahead if this sector is going to become truly, globally competitive in the way we aspire for it to be.

I know success depends on multiple factors. I’ve heard these many times, from start-ups, investors, industry bodies - including those on the CMA’s own Growth and Investment Council.

To name just a few, and these will all be familiar.

We need to attract and retain world-leading talent. We need to tackle the growth stage funding gap with the US. We need critical infrastructure and utilities that can keep up with demand.

And we need a regulatory environment that inspires business and investor confidence.

Which brings me back to who we are - and more importantly, how we can help you fulfil your extraordinary potential.

It brings me to the role of competition, and the CMA, as the UK’s primary competition and consumer protection authority.

My own background is largely private sector. I’ve worked for, and advised start-ups, scale-ups and some of the world’s largest firms across a range of sectors - from clean tech and telecoms to digital payments, data and AI.

And I can tell you honestly that what drew me to the CMA was the knowledge of what really brought out the best in these diverse businesses - what really made them hustle, innovate, stretch every sinew to succeed - was the power of competition.

So, we can’t solve all of the problems I’ve just listed. And I know there are more besides.

But there are a number of things we can do:

We can make markets work better

Through studies or investigations which lead to greater opportunities for innovators, entrepreneurs, and investors, as well as improved price, choice and quality for consumers.

We can keep markets open and competitive for all players

By investigating the small number of mergers each year that have the potential to lead to a substantial lessening of competition.

We can protect the level-playing field and bring down barriers to entry through competition enforcement

Giving you the confidence that your competitors can’t gain an unfair advantage by breaking the law.

We can boost consumer confidence, spurring spending and adoption of new products and services across the economy

Through robust enforcement of consumer protection.

And as of January this year we can promote competition in digital markets under the Digital Markets, Competition and Consumers Act.

I’ll come on to this in more detail in a moment.

Now, we talk about these powers, these ‘tools’ we have. But it’s the outcomes that matter. Lower prices, more choice, quality, diversity and security of supply, innovation, productivity, investment, economic dynamism.

These are the foundations of growth.

Not only that, but healthy competition also helps ensure the benefits of that growth are diffused across the whole UK economy, over both the short and long-term.

That’s fundamental to achieving long-term prosperity for everyone in the UK. That’s our job.

And, over the last decade it’s delivered more than £20 billion of direct financial benefits for UK consumers.

Which brings me something of a live debate here in the UK. Is driving economic growth really the job of regulators? Shouldn’t a competition and consumer protection authority be focused on, well, competition and consumers?

Our view is that of course it’s part of our role. The CMA can absolutely support an environment that’s strongly conducive to growth and investment - while upholding our fundamental responsibilities to promote competition and protect consumers.

In fact, the link between competition and growth is well-established; and consumer confidence is, of course, the fuel that powers a thriving economy.

This is not just a dry economic argument. As I say, we’re in the business of outcomes. So let me give you just a few examples particularly relevant to your sector.

Our retail banking market investigation paved the way for the UK’s Open Banking revolution, with startups and challenger fintechs - some of you, probably - powering a host of new services now used by over 70% of UK consumers and worth over £4 billion to the UK economy annually.

We recently investigated the conduct of a software company supplying a critical management information system to schools. We saw evidence of those schools being locked into longer-term contracts when other cloud-based services offered by challengers and competitors were becoming particularly attractive.

As a result of our intervention, the company legally committed to give certain schools the choice to switch. And a considerable number of them now have. Many such cases, by the way, rely on us receiving intelligence from parties who see that the market’s not working as it should - and our door is always open.

Some of you may remember the proposed merger of Experian and Clearscore which the CMA found could stifle product development and negatively impact consumers. The merger was abandoned and Clearscore returned to plan A - to grow as an independent, UK-based business.

Since then, it hasn’t just grown - it’s doubled-down on innovation and new offerings and now serves over 21 million users on four continents. Oh, and their CEO has joined the CMA Board.

I don’t need to tell this audience how critical access to online platforms is for your businesses. In 2023, the CMA secured commitments from Amazon to help third-party Marketplace sellers compete on a level-playing field; and from Meta to prevent the misuse of data through Facebook Marketplace, that could create unfair advantages.

Millions of UK businesses now have a fair chance of being featured in the ‘Buy Box’; are subject to fewer tie-ins around logistics; and enjoy greater protections for their valuable user data.

Lastly and most recently, for those of you in e-commerce or on platforms relying on user-generated content. Earlier this year, following a CMA investigation, Google committed to enhanced processes to tackle fake reviews, and to properly sanction reviewers and businesses who take part in this activity.

With as much as £23 billion of UK consumer spending potentially influenced by online reviews each year, we simply can’t afford as a country for consumers and fair-dealing businesses - especially startups trying to build trustworthy brands - to lose out to these unfair practices.

And new powers under the DMCCA mean we can also now take more direct action in this area.

-

Before I move on, it’s worth noting for those of you less familiar with the CMA that although we’re part of government, our decisions are made independently.

The fundamentals of what we do - promoting competition, protecting consumers - are core to our mandate from Parliament. And we also have a helpful frame from government, called a ‘strategic steer’ which guides our prioritisation as well as how we work.

And, very much as I’ve just illustrated with these cases, the new draft steer from the incoming government highlights the importance of the CMA independently enforcing strong competition and consumer protection - whilst rooting our work squarely in the context of the contribution it can make to the government’s number one priority of economic growth.

-

So, I’ve talked about you. I’ve talked about us and some of the ways we can help.

I want to spend some time in a moment talking about two areas I think will be of particular interest to this audience – mergers and digital markets.

But before I do, I want to give you some important context about where we are as an organisation and where we’re going.

So far, I’ve talked about the ‘what’ - what the CMA does, what value can we bring. But we know the ‘how’ is equally important.

I think it’s fair to say that over the years the CMA gained a reputation for being something of an ivory tower. Not always easy to engage with - perhaps even somewhat daunting to deal with. Some of you here may have direct experience of this.

But in this challenging economic environment, with companies experiencing this degree of uncertainty and volatility, and with such a clear need to drive investment into our economy, so that we can rebuild critical services and infrastructure, so we can achieve that prosperity I talked about - well, in that environment, it’s not just what we do that matters.

How we go about things, even just perceptions of how we operate - that matters too. It matters to business and investor confidence; and to the attractiveness of the UK as a destination for capital and a great place to start or grow a business.

That’s why we’ve spent a lot of time over the last 6 months talking directly to businesses and investors (domestic and international), as well as leading trade bodies.

We heard that four aspects of how we carry out our work really matter:

Pace

(streamlining our approach to reach sound outcomes as fast as possible)

Predictability

(being as clear as we can, to minimise uncertainty)

Proportionality

(meaning what we prioritise, how we address any concerns we find, and minimising burden on businesses throughout)

Process

(which really means direct engagement with businesses)

We’ve been working concertedly this year to deliver carefully considered, meaningful changes based on these 4Ps.

We started with merger control, where we had the most direct feedback from stakeholders and we know this is particularly important to business and investor confidence.

We’ve now launched a package of substantial reforms including:

new KPIs for considerably shorter end-to-end merger reviews

a consultation on our approach to merger remedies, looking both at the efficiency and pace of our process, and how we strike the right balance between different types of remedies

new guidance to clarify how we’ll apply the tests we use to decide whether we have jurisdiction to investigate a deal or not

UK law is actually unusually broad in this respect and the government has now announced a consultation on refining those tests to give legislative backing to our evolving approach

a targeted outreach series to break down barriers to direct engagement - both in and outside of investigations - including more senior meetings early in the process and deeper relationships with startups and investors and finally,

a Mergers Charter, which brings all of this together and lays out really clearly what businesses should expect from a CMA merger review, and what we expect from them and their advisors in return.

Now, I mentioned the importance of perceptions.

In reality, the vast majority of mergers raise no competition concerns. Many can enhance investment, innovation and business dynamism. That’s why, out of the 50,000 or so deals announced each year, the CMA usually prohibits 1 or 2.

That number hasn’t changed much over recent years, even after Brexit when we took on new powers for UK merger control from the European Commission. We also recently raised de minimis thresholds from £15m to £30m, focusing on deals that truly require our attention.

Our 2024 stats show that we formally investigated 38 mergers. 6 went to Phase 2. 1 was abandoned. 1 was prohibited.

But that’s almost beside the point if perceptions of our approach, and the real-life experiences of companies going through these processes, are undermining confidence.

So, I want to be absolutely clear about three things:

Firstly, that the CMA fully appreciates the importance of viable exit routes for startups, as well as routes to scaling organically. And with half the enterprise value of the UK tech sector concentrated in pre-exit companies, we know how important this is for growth.

Secondly, every deal that is capable of being cleared either unconditionally, or with effective remedies, should be. Only a truly problematic merger, where the harm to UK businesses and consumers can’t be effectively addressed through remedies, should not proceed.

Thirdly, every business in a CMA merger process deserves to feel listened to by us; to understand what we are doing and why; and to recognise a sense of fairness and consistent treatment.

I’m going to say this again - we will always uphold our duty to promote competition and protect UK consumers. That’s not going to change. And if any of your advisors suggest now’s a good time to push through a bad merger, with weak remedies, I’m afraid you probably want to seek advice elsewhere.

That said, I am confident that, implementing the changes I’ve outlined, we can uphold those responsibilities whilst also fostering a business environment that maximises growth, investment and business confidence.

_

Beyond mergers, we’re making real progress on applying the 4Ps - pace, proportionality, predictability and process - to other areas of CMA work.

Before I explain how we’re doing this in digital markets, some background may be helpful on the new digital markets competition regime that came into force in January this year - and why we believe it’s going to unlock a new era of innovation and investment across the UK tech ecosystem.

Procedurally, the regime enables the CMA to assess, over a 9 month investigation, whether a particular firm has strategic market status (‘SMS’) in respect of a particular digital activity. It’s carefully designed to apply only to the very largest firms, with clear conditions related to turnover, market power, and strategic significance.

And rather than imposing blanket rules across all companies, if a firm is designated with SMS, the CMA can take a very tailored, very bespoke approach to identifying and addressing specific harms.

In practice, this could mean for UK businesses: more interoperability, greater access to data and functionality, and fair terms of access to platforms or marketplaces - so UK businesses aren’t overpaying, having to share valuable data, or restricted from making certain improvements to their offering.

And for UK consumers it could mean lower prices, more choice, easier switching, and protection from exploitation or misleading practices.

Far from tying up the sector in red tape, this is all designed to open up opportunities across the ecosystem.

Opportunities for continued investment and innovation by the very largest firms.

Opportunities to unlock a new wave of growth, by creating a level playing field for start-ups and scale-ups to succeed (many UK-based).

And opportunities to strengthen consumer confidence in these fast-evolving products and services.

So, in January, we launched our first SMS investigations in relation to Google’s position in search and search advertising services (https://www.gov.uk/government/news/cma-to-investigate-googles-search-services) and Apple’s and Google’s positions in their respective ‘mobile ecosystems’ (https://www.gov.uk/government/news/cma-to-investigate-apple-and-googles-mobile-ecosystems). Both of those conclude in October 2025.

Coming back to the 4Ps, the potential for heavy-handed regulation to hamper innovation and growth is particularly high in fast-moving, technology-led sectors. So once again, it’s not just the ‘what’ but also the ‘how’ which matters.

And the design of the digital markets regime already reflects many aspects of the 4Ps.

Tight statutory time limits, and a broad duty of expedition, bake in pace - and now we’re going further, by committing to streamline our approach to investigations. Still rigorous, but drilling down on potential concerns as fast as possible.

Interventions are designed in an iterative, open way, providing all-important predictability - and now we’re going further, by committing to publish roadmaps of potential future interventions when we consult on a proposed designation decision.

And the process itself is uniquely participative, based on deep, ongoing, constructive engagement with SMS firms and other stakeholders. We’re going further here too, with a pro-active ‘go to you’ approach to business engagement - including with startups and scaleups - and a commitment to taking this outside the tech sector to the UK businesses which rely on these markets.

Finally, proportionality. Unlike some other jurisdictions, there’s no automatic designation or regulatory requirements. It’s highly tailored, highly flexible. We’re building on those foundations now, by laying out explicitly the prioritisation approach underpinning our choices about where and how to intervene.

We’ve applied our own CMA prioritisation principles: impact; strategic significance; whether we’re best placed to act; as well as consideration of risk levels and resources. And we’ve reflected key parts of the government’s draft strategic steer, for example taking into account the interplay with other regulators (domestically and internationally) when considering whether to act ourselves.

_

I’ll close by giving you a flavour of what’s to come from the CMA in the year ahead beyond everything I’ve talked about so far. We’ll be publishing our Annual Plan very shortly and I hope much of what we propose will be of interest and value to this audience.

As you’d expect, the plan reflects our strong commitment to competition and consumer protection, along with a sharp focus on how we can use our powers - and evolve the way we work - to drive growth and investment, as well as business and consumer confidence.

More specifically we’ll look for opportunities through our markets work to unlock investment in critical infrastructure; and to identify areas where key horizontal enablers (like access to data or technology adoption) can have a multiplier effect on growth.

We’ll support the government’s industrial strategy, looking across the priority sectors to where effective competition could spur innovation or investment or address anti-competitive practices which hold them back.

Part of that, by the way, may be facilitating companies collaborating to advance nationally important goals (skills, for example), as we’ve done previously around environmental sustainability and cutting-edge cancer therapies.

We’ll deploy our deep anti-bid rigging expertise and AI capabilities to help government identify and tackle bid rigging in public procurement, potentially opening up enormous opportunities for challengers and saving taxpayers billions of pounds.

We’ll support delivery of the government’s AI Opportunities Action Plan, looking for ways competition can spur the progress of a thriving UK AI ecosystem.

We’ll continue working with the FCA, ICO, and Ofcom as member of the Digital Regulation Cooperation Forum to enhance the clarity and coherence of digital regulation, as well as providing streamlined access to regulatory advice and support through initiatives like our AI and Digital Hub.

And we’ll work closely with our new CMA Growth and Investment Council. That includes CEOs and Chairs of twelve leading representative bodies across the UK economy, including the likes of Tech UK, the Scale-Up Institute and the Start-Up Coalition.

If there’s one message I want to leave you with today - to take to your boardrooms and pipeline meetings, into your risk committees and advisor discussions, it’s this:

Our north star is a regulatory environment which maximises growth and investment to the greatest extent possible, while staying true to our mandate to promote competition and protect consumers. So the confidence you have in the UK competition regime and in the CMA matters.

That’s why we’re listening and engaging more than ever before - and we’ll keep doing that. We’ll keep going with our 4Ps. And we’ll keep delivering those fundamentals which underpin growth and long-term prosperity for the benefit of all UK businesses and consumers.

All stats from HSBC Innovation Banking and Dealroom

UK Government AI Opportunities Action Plan: https://www.gov.uk/government/news/prime-minister-sets-out-blueprint-to-turbocharge-ai