What makes the CMA so powerful is its unaccountable structure. In the U.S., there is political oversight of the DOJ antitrust division and of the FTC through its commission structure. However, the CMA is a “non-ministerial government department” staffed by bureaucrats with no real political oversight. Moreover, both the DOJ and FTC have to win court cases to substantiate their findings. The CMA, on the other hand, simply issues an order after a round of public consultation.
The appeals process against a CMA order is extremely limited. The appeal goes to the Competition Appeals Tribunal, (CAT), which can only overrule the CMA when it finds that “the CMA acted irrationally, illegally or with procedural impropriety.” Appeals from the CAT to the U.K. courts can only centre around a dispute on a point of law. Unsurprisingly, this means that the CMA wins most cases on appeal.
The CMA claims to have the ability to stop any merger, anywhere in the world, if there is any British nexus to the case. Its decisions are made by bureaucrats, without any political oversight, and without regard to any unacceptable tradeoffs. There is little to no chance of successful appeal. The lack of due process is immediately apparent.
Britain's Competition and Markets Authority Is Becoming a Global Problem - Competitive Enterprise Institute
I'm thinking I should lower my chances of this acquisition closing; it sounds as though CMA has very little oversight and it's hard to appeal against their rejections. Prior to Brexit, EC used to decide for us but now CMA has full power and that is obviously a recent change. If CMA blocks, then Microsoft will have to fight hard.
Also, I have to point out that the CMA approved Penguin Random House's acquisition of Simon & Schuster in 2 months, it didn't even enter Phase 2. Despite the fact that Penguin Random House is one of the big five of book publishers and is already a merger of two major book publisher entities (Penguin Group & Random House) and with S&S they will have a market share of an estimated 30% and by revenue with S&S they will be #1 based on 2021 revenues.
Meanwhile the DoJ has sued to block that acquisition, but CMA passed it extremely fast, I do start to wonder if CMA plans to make an example out of Microsoft because nobody cares about book publishers but being the first to take down big tech? Everyone wants in on that right now, CMA might want to frame themselves as the only ones stopping big tech, but we'll see what Phase 2 says.
Last edited by Ryuu96 - on 20 October 2022