Sarah Cardell’s CV carries all the hallmarks of a career honed in the UK: an Oxford university education; partnership at a magic circle law firm; and senior roles at British regulatory authorities.
But the chief executive of the Competition and Markets Authority now presides over an organisation with global ambitions. And big tech knows it.
In a speech last year Cardell, 49, said the CMA had taken on a “more significant global role” after Brexit. Tech has been caught in the grasp of its expanded reach, as shown by its ruling last month blocking Microsoft’s $69bn acquisition of Call of Duty developer Activision Blizzard. This week it launched an inquiry into Adobe’s $20bn purchase of online design platform Sigma.
On Thursday, it turned its attention to the field of artificial intelligence, marking the card of companies racing to develop AI applications by announcing a review of the sector. Under Cardell, who was general counsel at the CMA for nearly nine years before her promotion and worked at the energy regulator Ofgem before that, the UK is positioning itself alongside Brussels and Washington as a third pillar in the policing of technology multinationals.
“The CMA has deliberately chosen the tech cases it has pursued so far because it wants to, following Brexit, be seen as one of the leading regulators on a global scale,” says Verity Egerton-Doyle, UK co-head of technology at law firm Linklaters.
Last year the CMA confirmed a 2021 ruling ordering Facebook’s parent company to unwind the $400m acquisition of search engine Giphy, while current investigations include looking at Apple’s app store and the use of data in online advertising by Facebook and Instagram’s parent, Meta.
Its powers are also due to be enhanced considerably by the arrival of the forthcoming digital markets, competition and consumers bill. The legislation will give the CMA, and its digital markets unit, the power to set out “tailored rules” for how major tech firms should behave, such as providing more choice and transparency to their customers.
“It gives the CMA the power to write the rulebook for these companies,” says Egerton-Doyle.
One of the reasons why the CMA is considered a globally influential regulator is because its work is closely followed by other watchdogs. Its published findings are seen as coherent, regardless of whether companies agree with them.
“The CMA has a soft power influence because of the public nature of its process and the quality of its work,” says Egerton-Doyle.
For some tech execs, the process is too rigorous. Furious at being blocked, Activision Blizzard said last week the UK was “clearly closed for business”. Last month the co-founder and CEO of Deliveroo, Will Shu, accused the CMA of treating him “like a criminal” during an investigation into Amazon’s proposed $500m investment in the takeaway delivery company, which the regulator ultimately cleared. Shu told the Business Studies podcast that the inquiry was “total bullshit” and forced the company into making redundancies “because we almost ran out of cash”.
Anne Witt, a professor of antitrust law at EDHEC business school in France, says the CMA’s interventions on Giphy and Activision are the “tip of the iceberg”, because the digital markets, competition and consumers bill will hand such a boost to the organisation’s powers.
“On the one hand they want to make markets act well for consumers. But on the other they do not want to increase compliance costs for big tech and over-regulate them to such a degree that it makes the UK unattractive to tech firms. That is not good for UK consumers and not good for the UK economy,” she says.
It is taking a different tack to the EU, which is pushing further on tech regulation too. Europe’s digital markets act, which came into force this week and also sets out measures to tackle “gatekeeper” tech firms, does not take the UK approach in setting out bespoke rules.
The EU and UK are trying to “fix the same problem with different tools”, says Witt. “In a way it’s regulatory competition,” she adds.
“The CMA’s ambition to be world-leading is clearly there and this new bill will definitely give them the tools to do so.”
Although Cardell did not make the decision to block the Activision deal, which was made by an independent CMA panel, the move led to expressions of outrage in the US. Jay Clayton, the former chair of the US securities and exchange commission, and Gary Cohn, former director of the National Economic Council in the Trump administration, wrote in the New York Times that the Activision verdict appeared to show how the US competition watchdog, the Federal Trade Commission, was “outsourcing” regulatory work to Europe.
The FTC has not been inactive, however, and this week it proposed banning Facebook from profiting from using minors’ data. Under its chair, Lina Khan, it is also pursuing the break-up of Facebook’s parent company, Meta.
The FTC is “not abdicating its role at all”, says Rebecca Allensworth, professor of antitrust law at Vanderbilt law school. “The FTC is pursuing its regulatory mandate very aggressively.”
Regardless of their positions in the regulatory pecking order, the UK, US and EU are united in one thing: big tech is a target.
