Our biggest companies care more for their external ‘stakeholders’ than ever before. So many column inches are devoted to consumer welfare and corporate social responsibility in annual reports that these once modest documents now make handy doorstops. One might almost forget such goliaths of capital exist to make a profit. 

Paul rogerson

Paul Rogerson

This much is axiomatic.

Or is it? A provocative recent speaker at the Law Society effectively argued the opposite (tinyurl.com/55np5tnh). The prospect of an address by the chair of the Competition and Markets Authority to the Competition Section International Antitrust Conference would not ordinarily make the heart skip a beat in eager anticipation. But Jonathan Scott’s observations were eye-catchingly counterintuitive. He identifies a dissonance between statements of corporate purpose and how companies are actually behaving in the market. In reality, too many boards now care less for corporate reputation than they once did – and not only because liability for financial penalties has become just another cost of doing business.

More importantly, what the CMA can no longer count on is the orthodoxy of free, open, competitive markets being the best way to promote consumer welfare. ‘One can no longer take for granted that politicians and the public think that competition is simply a good thing,’ declared Scott. ‘There is less trust in markets – less trust that competition will deliver better outcomes for consumers and productivity benefits for the wider economy.’

This is quite the cri de coeur from our principal anti-trust watchdog; and it comes at an inopportune time. The agency’s job has just got much more difficult with the assumption of complex competition and merger investigations that would previously have been the exclusive preserve of the European Commission.

Former CMA chair Andrew Tyrie has argued persuasively that the CMA’s existential crisis has arisen partly because its activities are so arcane. What are needed to persuade the public of the merits of the free market are new statutory duties to promote the consumer interest more aggressively and curb high-profile ‘rip-offs’, he says. At present, Tyrie notes, the authority spends [too?] much of its time talking to competition lawyers.