Rachel Reeves is rolling up her sleeves to overhaul how the Competition and Markets Authority (CMA) investigates certain business mergers.

She’s promising to tighten the rules so that fewer deals get caught up in drawn-out probes—something she insists will make the UK more attractive to investors and promote economic growth.

So why is the government so concerned about the CMA’s role, and how exactly will these changes affect British consumers, businesses, and the economy at large? 

What is the CMA?

First, a quick refresher:

The CMA is the UK’s principal competition regulator. It’s in charge of promoting and enforcing fair competition so that no single company (or handful of companies) can gain an unfair stranglehold on a market. It investigates everything from potential monopolies to shady cartel behaviour, all with the idea of protecting consumers from being overcharged, and businesses from being crowded out.

When Did It Come About?

Although Britain has enforced competition rules for many years, the CMA in its current form is relatively new. It officially launched on April 1, 2014, after merging two older agencies—the Office of Fair Trading (OFT) and the Competition Commission—under the Enterprise and Regulatory Reform Act 2013.

The idea was to create a single, more efficient body to handle everything from routine inquiries to major antitrust cases. Ever since, the CMA has had sweeping powers to investigate entire industries and, if needed, block mergers or impose remedies on companies that threaten competition.

What Exactly Does the CMA Do?

1. If a proposed deal looks like it could reduce competition (for instance, if the merging parties would end up controlling a huge slice of a market), the CMA can stop it or add conditions—sometimes forcing the company to sell off certain parts of its business.

2. Cartels, price-fixing, and other collusive behaviours are firmly in the CMA’s crosshairs. When the authority finds such activities, it can levy hefty fines and even refer cases for criminal prosecution.

3. Beyond just policing mergers, the CMA also examines unfair practices toward customers—anything from hidden fees to exploitative contracts.

Before deciding whether to investigate a merger, the CMA generally looks at two key legal tests:

a) Share of Supply: If the combined entities will control at least 25% of a specific market, that deal could wind up on the CMA’s radar.

b) Material Influence: Even if a business doesn’t buy a controlling stake, purchasing a substantial share—enough to influence decisions—can also spark a review.

If the CMA finds a merger (or business practice) is harming competition, it can intervene—by blocking the deal, insisting on structural changes, or imposing fines. Its decisions can be appealed through the Competition Appeal Tribunal, but the CMA’s rulings usually carry significant weight.

So Why Shake Things Up Now?

Plenty of companies have complained that the CMA’s broad authority catches too many deals in the net, including mergers they insist are relatively minor. They say these investigations are expensive, time-consuming, and can scare off international investors—especially in high-growth sectors like tech or biotech.

Enter Rachel Reeves. In the wake of these complaints, she wants to “tighten and limit” the share-of-supply and material-influence tests. That means fewer mergers will fall under the CMA’s review. Reeves has branded the move as crucial for cutting bureaucracy and boosting economic confidence, positioning the UK as a more business-friendly environment.

The Changes Proposed

Specifically, Reeves plans to update the thresholds so that only deals of a certain size—or where there’s a clear potential to distort competition—will automatically be reviewed. If a transaction doesn’t meet these newly adjusted criteria, it should, in theory, sail through without the CMA intervening.

For businesses, this is a welcome shift. They’d face fewer costly delays and fewer demands to spin off assets or comply with complicated conditions. For the government, it’s another step in a broader strategy to woo investors and polish the UK’s pro-business credentials.

But will this lead to less rigorous competition enforcement? That’s what some economists and consumer groups worry about. They argue that even modest mergers can sometimes erode competition—especially over time—and that reeling in the CMA too much might create loopholes for bigger players to dominate.

At the end of the day, Reeves is betting that trimming the CMA’s authority in smaller or less significant deals will free up resources for bigger, truly impactful mergers—the ones that might genuinely hurt competition and push up prices. She insists the CMA will still have ample muscle to shield consumers from corporate giants.

Whether these reforms will strike the right balance remains to be seen.

If they work as intended, there may be little immediate impact—aside from smoother deal-making. Over time, the UK could see a boost in investor confidence and economic growth.

But if the pendulum swings too far, we risk paving the way for dominant players to quietly take over key markets—and reigniting the same old debate about how to rein them in.

For now, it’s a wait-and-see game.

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