London is getting it wrong: Consumer protection is not anti-growth
Subscribe to enjoy similar stories. The forces protecting consumers from abuse by big business are in retreat. Former Italian Premier Mario Draghi last year called for reform of merger control in Europe to boost the region’s global competitiveness.
Consumer champion Lina Khan has, as expected, left the US Federal Trade Commission antitrust authority. And last week came a real shocker: The UK government ousted the chair of its Competition & Markets Authority (CMA) merger watchdog. A problematic narrative is emerging that antitrust regulation needs a philosophical overhaul, and that its primary aim of protecting competition should give way to a more nuanced approach advancing multiple economic goals.
Economics says competitive markets are good for consumers and leads to other benefits. If merger regulators focus on preserving competition and preventing future monopolies, the economy wins as a result. Healthy rivalry between companies spurs innovation and sees efficient firms take market share from inefficient peers.
You don’t need to directly target, say, growth. The first task in examining a merger is to determine if the mooted tie-up might lead to what’s called a “substantial lessening of competition." Everything else follows from that. The CMA has consistently argued competition is a growth enabler.
Yet, when the UK government replaced CMA chair Marcus Bokkerink with former Amazon executive Doug Gurr, it said the interim appointment was “a bid to boost growth" and flagged that the agency would soon receive a “new growth-focused" strategic steer. The implicit concern is that the traditional obsession with competition could be having bad side effects from a wider economic perspective. In theory, you could imagine a
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