Stuart Hudson rejoined Brunswick Group at the end of March after spending four years at the UK’s Competition and Markets Authority as senior director of its strategy, communications and advocacy team. He spoke to GCR about his time at the agency, what antitrust enforcers can learn from politicians and why a lack of good faith debate within the wider competition community needs to change.
You served in the Labour government as an adviser to the prime minister, Gordon Brown, between 2008 and 2010. How influential was the role of antitrust on economic policy back then and how has it evolved as an influence on central government?
It’s a really good question. I joined Number 10 from the energy regulator Ofgem at a time when gas and electricity prices were rising significantly. There was a lot of political interest in the sector and Ofgem had recently conducted a high-profile probe into the energy supply market. So I was quite surprised to discover how infrequently competition issues came onto the desk of the Prime Minister. In some ways, that’s how it should be. When parliament gives responsibilities to independent bodies, they should be allowed to conduct that work. But what it meant was that it was very rare for ministers to look at competition issues in the round. Rather, ministers would see antitrust issues through the prism of another more pressing political matter, such as cutting energy bills or saving jobs in a troubled sector.
That’s why, for competition authorities, academics and others who believe in the importance of competition, it is important to keep making the case for it. What I find encouraging is that across both the main parties, there is a significant acceptance of the importance of competition, as it promotes economic growth and innovation and helps reduce economic inequalities. Policymakers are much more likely to achieve those objectives in an environment where markets are competitive rather than monopolised.
You joined the CMA in 2019 when the agency was preparing to leave the EU. At the time, it was very uncertain how Brexit would look. How much of a challenge was that?
You’re totally right and there were several dimensions to the challenge of Brexit. First, we knew that the CMA would take on significant additional responsibilities, particularly in reviewing global mergers. But second, the scope of some of the additional responsibilities was unclear, for example we didn’t know what the regulation of state aid would look like and how significant the CMA’s role would be in that. And third, we didn’t know the timing of when we would assume these responsibilities, given the ongoing negotiations between the UK and EU, so there was a lot of uncertainty.
A lot of work had to go into ensuring that the CMA was going to be operationally ready to take on all these functions, potentially at quite short notice. I think the management team as a whole deserves a lot of credit for this, in particular Erik Wilson, the chief operating officer, whose role was fundamental in ensuring the agency was prepared.
To what extent did the CMA see Brexit as an opportunity to forge its own path in antitrust and merger cases?
I think a lot of the commentary on this slightly misread our thinking and mindset as it didn’t feel that way at the time. If anything, we were a lot more conscious of the obligations and responsibilities that we were going to face. State aid and the new internal market regime were significant examples of this. These were responsibilities post-Brexit that would take the CMA into potentially politically sensitive territory that is quite uncomfortable for an independent regulator. So we were deeply conscious of making sure that we were ready to do these roles and to do them properly and impartially. Insofar as mergers are concerned, I don’t think there was any sense of wanting divergence for its own sake. Clearly, different authorities have got their own statutory duties and processes that they have to follow, but international cooperation has been a very important part of the CMA’s work before Brexit and certainly since then.
Now that we know what Brexit looks like, how is the CMA placed to respond to its various opportunities and challenges?
The CMA has invested in developing the skills and infrastructure over the past few years to meet its new responsibilities post-Brexit and to be able to assess those more challenging global mergers and antitrust cases. Of course, Brexit also came at a time of significant developments in digital markets and so the CMA has built up its expertise in this area also. And interestingly, the government’s new draft strategic steer to the CMA explicitly asks it to act as a thought leader at home and abroad, using its post-Brexit role to shape the international debate and response on key cross-border issues.
Do you agree with Sarah Cardell’s comments rejecting claims that the CMA has become more interventionist in merger control?
I would urge anybody who’s interested in the CMA’s approach to mergers to read the speech that Sarah gave on this issue in February and I very much agree with her comments. That speech provides the best articulation of the authority’s current thinking on merger control and in it Sarah also tried to address in a very direct and frank manner some of the most common questions and misconceptions about the CMA’s approach to merger control.
I remember being quite struck when I arrived at the CMA about some of the commentary on mergers being quite overblown and in some cases just false. For example, when the CMA blocked a deal some observers would attribute this to the so-called ‘Tyrie factor’ – our then chair who had previously been a Conservative MP. But of course, that bore no resemblance to reality. Andrew took no involvement in merger cases and if he had tried to do so I’m sure the CMA Panel would have vigorously defended its independence.
It’s important to stress that point because I think some of the commentary has been inaccurate. What has happened, of course, is that the CMA has taken on responsibility for global mergers and, at the same time, there have been significant developments in digital markets, which the CMA and authorities globally have had to look at. The CMA has also sought to look at a richer source of evidence in its cases, for example making more use of internal documents and consumer surveys, and listening to what customers, competitors and other stakeholders think. This all means that a CMA merger review is not simply a bilateral discussion between the merging parties‘ advisors and the case team. And I think that’s a significant and positive development.
Has the agency struck the right balance between having a more consumer-facing outlook and also allaying the fears of the business community?
I think the question is based on a false premise as there isn’t a straight trade-off between the interests of consumers and businesses. The promotion of competition and competitive markets is in the interest of businesses just as much as consumers. Indeed, many of the CMA’s cases – including many lower profile ones in B2B markets – will actively help businesses, new entrants and entrepreneurs by keeping markets open.
What has changed in the past few years is that the CMA is looking to get much closer to consumers and other stakeholders. If you work for a competition authority or an independent regulator, you might have a statutory duty to consumers, but you don’t necessarily interact with them on a regular basis. That’s very different from the elected politicians I used to work for. The fact that they represent a constituency gives them a direct connection with ordinary people and a direct insight into their problems. I remember situations where civil servants would be giving briefings on a complex issue – for example changes to social security benefits – and senior cabinet ministers would challenge them based on real-life examples they knew about from their own local surgeries. At a regulator, you don’t get that direct experience with the people you’re here to protect and I think it’s been quite important for the CMA to change that. One way it has done that in the past few years is to enable staff, including very senior staff, to spend time in Citizens Advice contact centres, so that they can hear directly from consumers about the issues that they’re facing and learn a little bit more about the human impact. That kind of experience and talking to consumer bodies and other stakeholders has been very helpful.
But that’s not at the expense of engaging with business. Since Sarah Cardell and Marcus Bokkerink took over, they have been spending a lot of time engaging with businesses and investors to get their views, explain the agency’s thinking and try to give them a better understanding of the CMAs approach.
What did you make of the Digital Markets, Competition and Consumer Bill, published by the government last month? Were you at all surprised by anything in it?
It’s a really important step forward. The bill has been a long time coming and it still now needs to go through parliamentary scrutiny, which has now begun and is likely to get a lot of attention from the companies involved, campaign groups and other stakeholders.
The bill has been published since I left the CMA so it’s not for me to speak about how the CMA views it but, to me, the legislation reflects the substance of advice that the CMA has given over time on the need to ensure procompetitive regulation in digital markets, to have a stronger consumer protection regime and to have more flexible and faster competition enforcement. For example I remember the Paroxetine case, which started in 2011 and finally came out of the Competition Appeal Tribunal in 2021 when the CMA’s infringement decision was upheld. It is not in anybody’s interest for cases to take that long so I hope the new bill will lead to a faster and more flexible regime.
A parliamentary committee report found the CMA was struggling to hire staff post-Brexit. Could the agency suffer from a skills shortage in the near future?
Inevitably attracting and retaining talent is a challenge at a time of public sector pay restraint. I won’t claim antitrust enforcers are in the same category as nurses and emergency services so they don’t expect a huge amount of public sympathy but the CMA does employ an awful lot of people in professions that could very easily move at short notice to much better paying jobs in the private sector. So that is a challenge and I know that the management team at the CMA is working really hard to ensure that the employee value proposition is as strong as it possibly can be. And although it is challenging, the other side is that the CMA is an incredibly rewarding place to work. Being able to work in public service on really intellectually interesting issues is a great privilege. So I hope that the CMA is still going to be able to continue to attract talented people from within the civil service and outside.
How much did the government’s delay in appointing a permanent chair to replace Lord Tyrie destabilise the agency?
It’s no secret that the public appointments process in the UK got pretty gummed up over the past few years. This was not just at the CMA but other public bodies too. What helped during this period was interim chair Jonathan Scott really stepped up to the plate internally and especially over the first and second Covid lockdowns. It was a difficult time for staff but Jonathan, along with Andrea Coscelli, put in a great deal of effort to engage with staff to try and help them. He played a big role in steadying the ship.
How do you think Marcus Bokkerink has done so far in the role?
I think both Marcus and Sarah have gotten off to a really good start and, what’s more, they complement each other well. Sarah is a deeply experienced competition lawyer who knows the regime really well and is also outward-facing and keen to engage externally, which I think many of the CMA’s key stakeholders will attest to. Marcus comes from a business background so he’s not part of the competition ‘bubble’ but he’s seen in practice how businesses seek to develop strong competitive positions, in positive and less positive ways. The perspective that he can provide is valuable there. And with thirty years’ experience in strategy consulting, he also brings clear strategic thinking, and in the process of developing the CMA’s new strategy I learned a huge amount from him.
After he left, former chair Lord Tyrie accused the CMA of being unfit for purpose and said it needed to better address the needs of consumers. What did you make of those comments?
I certainly don’t agree that the CMA is unfit for purpose. I think its record over the past few years before and during Andrew’s time shows that it is a high-performing organisation with very talented people. Where I think Andrew was right was in urging the CMA to get closer to consumers and I think he deserves a lot of credit for doing that. That work has continued and Andrea Coscelli and Sarah Cardell have taken it further.
Is there more political intervention in the CMA’s work now?
No and I think it’s important to draw a distinction between two different things. I think it’s entirely legitimate for ministers to suggest issues that they think the CMA should look into – as was the case on PCR testing and fuel markets. Elected politicians will be hearing from their constituents on policies and it’s entirely appropriate for them to say whether they would like the CMA’s advice on a matter.
However, it will be for the CMA board then to take a decision about whether to launch cases in those areas, and it is important that the CMA does its work independently when a case is underway. For example, I think that some of the people who were calling for the music streaming market study to take place might have hoped that it would have a different outcome. But the CMA did its work, conducted the analysis, found that there wasn’t a significant competition problem that was harming consumers, and it came out and said that publicly in its findings.
When it comes to merger cases, during my time at the CMA, no minister, official or special advisor ever told us or even suggested that they thought the CMA should decide the case one way or the other. In my experience, they were punctilious in respecting its independence and I hope that continues.
What role can antitrust play in alleviating the current cost of living concerns?
I think there are two angles here. The cost of living crisis reinforces the importance of competition policy and enforcement in ensuring prices are no higher than they need to be. Second, it raises an important question for enforcers about prioritisation. In the CMA’s current annual plan, the agency set out its intention to focus on the needs of consumers, including those areas where they need help the most, and I think that’s absolutely right.
Why did you decide to leave the CMA?
I took on a newly created role on the CMA’s executive committee in 2019, bringing together the agency’s strategy function, its communications team and its external relations, including its work across the UK nations and regions. Over time, the role expanded to take on oversight of the advocacy function, which provides advice to the government on competition issues, for example as we did in the fuel market and on PCR testing. More recently, we became responsible for setting up a new function coordinating the CMA’s pipeline of future cases.
I count myself really lucky to have been at the CMA in a very significant period in the evolution of the agency. It took on a much bigger role globally post-Brexit, with responsibility for global mergers and antitrust cases. It also set up the Digital Markets Unit, which as a result of the newly-introduced legislation will I hope soon be on a statutory footing. I also joined at a time when antitrust was getting much more attention internationally and as the CMA itself became a much more outward-facing organisation. I was proud to be a part of that and to have had two fantastic bosses in Andrea Coscelli and Sarah Cardell.
But my professional life hadn’t always been in antitrust. My early career was in politics with the Labour Party and then as a special advisor at Number 10 for Prime Minister Gordon Brown. My academic background was in finance and I spent nearly a decade at Brunswick advising companies across Europe and North America on a range of transactions and regulatory issues. So when Brunswick asked me to return and bring together these various different aspects of my experience to help them grow their competition and regulatory offer internationally, it was a really appealing prospect.
Do you have any regrets from your time at the agency?
This is not a regret about the CMA as much as a reflection for all of us in the antitrust community. There are some big issues in competition policy globally and I’m not sure we all do as well as we can in how we conduct some of those debates.
Take the debate in the US over merger control. I’m simplifying here but there is a group of people who think that competition is weakening, something has gone wrong in enforcement and we need to get tougher. There’s another group of people who say, hold on, we mustn’t go back to the bad old days of unclear rules or arbitrary enforcement. But neither of these arguments refutes the other. In fact, there’s a lot of truth in both of them. Yet rather than a good faith debate about how we strike the right balance, too often we all end up talking in echo chambers with those who already agree with us. Or even worse, in an echo of our wider political culture, there can be a temptation to delegitimise your opponent rather than engage with their arguments. For example, I find some of the personal criticism directed at Lina Khan deeply distasteful, and I also don’t think someone’s views should just be ignored because they happen to work in private practice. The antitrust community has a lot of bright people with integrity – among enforcers, academics and practitioners – and I think we can probably all do a bit better here. Next time I’m in a discussion on antitrust policy and enforcement, I’m going to try to firstly ask myself how my own biases are affecting my thinking, secondly acknowledge the other person’s strongest argument and try to engage constructively with it, and thirdly ask what if it turns out that I’m wrong?
Moving onto your new role at Brunswick, what will that entail?
I’m going to be working with colleagues across the firm’s offices globally to grow its competition and regulatory practice. Over the past few years, Brunswick has made some significant hires in this area and I’ve been really impressed by the quality of people that it has recruited. Looking back on my career to date, I’ve advised companies, ministers and regulators on many high-profile transactions that involved political sensitivities, from Kraft/Cadbury to Pfizer/AstraZeneca and GKN/Melrose. But over the past few years, the M&A environment has become even more complex and boards need expert advice that helps them deal with political, regulatory and national security challenges across multiple jurisdictions.
What attracted you to the firm?
As well as the things I’ve already talked about, Alan Parker has been one of my biggest professional mentors during my career, and I’ve got huge admiration for how he has built Brunswick over the past 35 years from a financial communications firm to one that is advising CEOs and boards across their most critical issues.
Would you go back into politics or public administration?
It was a great privilege to serve at Number 10 and at the CMA, to learn how these very different institutions operate and to play a part in their work at some important moments. I’m also lucky to have made a great many friends on the way. As far as politics goes, the bug never leaves you entirely but a new generation is coming in now. I enjoy helping wherever I can but my own special adviser days are definitely behind me.
Source: https://globalcompetitionreview.com/article/qa-stuart-hudson
