America has made it almost 250 years independent of its colonial master, Great Britain. Now, in one area at least, you might as well tear up the Declaration of Independence. A swarm of British officers is harassing American companies that are trying to merge with others, forbidding them from doing so. In the past, administrations of either party would have objected vociferously to such imperialist overreach, but this administration seems happy to let these outrages continue.
The neocolonial body concerned is the U.K.’s Competition and Markets Authority (CMA) — and yes, you read that last word right. The Authority (which, coincidentally, is the name of a British-authored comic book featuring a superhero team that “gets the job done by any means necessary”) is a body set up by the U.K. parliament that is in some ways analogous to the Federal Trade Commission, in that it is supposed to enforce British competition laws.
Where it differs is that its leadership is mostly from the permanent civil service, unlike the FTC’s commissioner structure, and its decisions are reviewable only as matters of law (in other words, any appeal from the Authority’s decision is allowable only when the Authority got the law wrong — no appeal on the merits of the decision is possible). The CMA is unelected and unaccountable, with minimal due process.
Unelected and unaccountable is bad enough, but when you add extraterritorial to the mix, it reaches new levels of offensiveness. That’s because the Authority now regularly blocks mergers and acquisitions by American companies of American companies, on the grounds that such M&As could lead to a “substantial lessening of competition” in U.K. markets. The latest example is today’s block on the acquisition of Activision by Microsoft.
Such findings are necessarily speculative. They generally rely on some hypothetical scenario of what the future could look like. For example, when the CMA blocked Facebook’s purchase of the small GIF-providing service GIPHY, it speculated that somehow GIPHY would turn into a major provider of online advertising services. That case is also a good example of the lack of due process — despite the appeals tribunal finding against the Authority, it was still able to block the deal.
Such speculation is also often ill-informed. The CMA is not composed of technical experts. As Microsoft correctly noted in its reaction to today’s decision, it “appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.” This would be in some ways excusable if there was a competent body of appeal, but as noted already, the appeals tribunal cannot overturn the decision on the merits. If the CMA messes up, tough luck.
This all means that the U.K. parliament and government have done something extraordinary — they have set up a body that can make itself the world antitrust regulator and have done so without any of the proper guardrails one might expect from setting up a body with enormous power. They intend to add to this by creating an even more powerful Digital Markets Unit within the CMA, which will soon attempt to become the world regulator of virtually any content online, all in the name of “online safety.” If the word “imperialism” springs to your mind, I won’t contradict you.
The American Congress and administration should be affronted by this and should be using all the legislative and “soft” power they have to stop it. Yet, if anything, the administration’s antitrust people seem quite happy with it. It’s easy to see why — the CMA is able to do things the FTC and DOJ can’t because of those pesky constitutional requirements of accountability and due process. We’re already seeing the FTC essentially collude with European competition authorities, to the detriment of U.S. companies and to the advantage of China.
Enough should be enough. The U.S. trade representative should start throwing her weight around on this, as representatives Jeff Duncan (R., S.C.) and Michael Guest (R., Miss.) have asked. While it’s probably too much to expect any action from this regulation-loving administration, a future Republican administration should make it clear that it is not going to stand for British or European bureaucrats halting the merging or acquiring American companies when that comports with American law.
That could start, perhaps, with waving the Declaration of Independence in the ambassador’s face.