At the Financial Times Artificial Intelligence (AI) Summit today, I shared some of the Competition and Markets Authority's (CMA) evolving thinking on the foundational role of competition in the UK's growth mission, and how we have been challenging ourselves on the contribution we can make to a thriving AI ecosystem for the UK.
Our purpose: at the heart of a pro-growth environment
The CMA's purpose - to promote competition and tackle unfair behaviour - is foundational to a pro-growth environment. That's why we made productive and sustainable growth across the UK economy a core pillar of the CMA's new strategy in early 2023, just after I took up my role as Chief Executive.
History and evidence show us that where competition is stronger, productivity and wage growth will be higher; and we have seen time and again how fair, open, effective competition and market contestability can be catalysts for investment and game-changing innovation.
The UK's £4 billion open banking revolution stands testament to that.
Nearly 2 years later, in the context of the national growth mission, we are more focused than ever on how the CMA can help realise these benefits for the UK. We recently launched our new Microeconomics Growth Programme, to drill down into the drivers and blockers of growth - like the impact of upstream market power on economic performance and supply chain resilience; how easily (or not) new technology spreads across the economy; and how competition impacts investment.
As the Chancellor said recently, growth requires investment, but the public purse is deeply stretched. So we are exploring how our data and AI expertise could help government tackle bid rigging in public procurement. We know this is a real risk - last year alone, we fined 10 construction firms a total of nearly £60 million across public and private contracts. Now we are digging into how (with better data collection and sharing) AI could detect these illegal practices, helping to reduce public expenditure and save the taxpayer potentially billions of pounds.
Unlocking the opportunities of AI
Does the CMA believe AI could transform our lives and society for the better? Absolutely, we do. Again with a keen eye on growth, we are challenging ourselves on how the CMA (and competition more broadly) can support a thriving UK AI ecosystem - one with real, long-term value creation and value capture for UK businesses and consumers.
One thing we are sure of: if the UK is to become a global leader in this field, it is going to take innovation, investment, collaboration and determination from companies of all shapes and sizes, working alongside experts in academia and civil society. We are fully supportive of the important role of the largest firms here - they have driven fantastic progress in this space and are a key source of investment in the UK. It is also our job to enhance and protect opportunities for the challengers - the start-ups, smaller firms, specialist providers, some of whom have created the most innovative and capable models we have seen so far and many of whom are based here in the UK. There is a role for everyone here - incumbent and challenger, global giants and scrappy start-ups. We would like to see sustained competition supporting this healthy rivalry and tension in the market, benefitting the companies themselves (pushing them to be more innovative, more productive and creative), and ultimately the end users of the products and services.
We are actively looking for opportunities where competition could unlock barriers to investment and innovation across the AI value chain - from infrastructure and development, to release and deployment, even how talent and skills diffuse across the economy. We have previously highlighted some potential risks to the full benefits of AI being realised by UK consumers and businesses and set about engaging with stakeholders (the largest firms, as well as challengers and startups) on how these might be mitigated. We know heavy-handed, sweeping regulation can stymie innovation and stunt growth, so our approach has been to publish a set of principles to help guide these markets toward positive outcomes. And all of this is supported by our deep in-house capability in technology, data, and AI.
Looking ahead to 2025
I will share more about how the CMA is progressing and evolving our pro-growth approach when I speak at Chatham House's competition conference on 21 November.
Looking ahead, a new digital markets competition regime will come into force at the start of 2025. That bespoke, proportionate, participative regime is designed not only to enable a step change in tackling harms in digital markets.
As the new regime begins early next year, major firms can continue to play their hugely important role in the UK tech sector, driving innovation and investment. At the same time, we can provide enhanced opportunities and protection for startups, challengers and their investors (many based in UK). And there will be strengthened opportunities for UK business customers, and consumers, to get great products and services on fair terms.