London, January 23 (Reuters) - The decision by the UK to appoint a former Amazon executive to lead its antitrust regulator is seen as a strategic move to attract investment, particularly from major tech companies. This move also suggests a willingness to be more lenient on business deals if it benefits the economy, company executives and legal experts pointed out.
Doug Gurr, the former head of Amazon's UK division, has been appointed to head the Competition and Markets Authority (CMA) following Marcus Bokkerink's departure. According to finance minister Rachel Reeves, this change signals a shift in regulatory approach to encourage innovation and growth rather than being overly cautious.
Experts like competition economist Cristina Caffarra highlighted that mergers might not necessarily boost economic output unless significant synergies are reinvested. The interim appointment of Gurr as the chair indicates a shift towards US-style regulation to attract more investment, according to experts.
Dominic Long, a competition lawyer at A&O Shearman, mentioned the possibility of an increase in international deals involving UK assets. He noted that challenging deals might now find it easier to be approved compared to a year ago.
Foreign investment plays a crucial role in the UK, with projections suggesting it generated over 70,000 jobs in the fiscal year 2023/24. Despite a decrease in projects following the Brexit vote, Britain continues to be a top destination for investment in Europe, close to France.
The CMA, under Bokkerink, had previously engaged in regulatory conflicts, including the well-known Microsoft case in 2023. The CMA initially blocked Microsoft's acquisition of Activision, only to reverse its decision after lobbying, emphasizing that the shift was not politically motivated. In 2024, the CMA did not reject any major deals.
An anonymous FTSE-100 CEO mentioned that the UK government is working to mend its relations with Big Tech post the Microsoft incident, aligning with the approach expected under the new US administration for tech giants.
Martin Sorrell, CEO of ad group S4 Capital, suggested that Europe, including Britain, was overly regulated according to discussions at the World Economic Forum, signaling a potential change in the UK's regulatory stance.
In conclusion, as regulatory dynamics evolve post-Brexit, the CMA aims to strike a balance between consumer protection and fostering risk-taking for businesses. The review of tech companies and ongoing investigations signify a cautious approach to ensure competition and innovation in digital markets.