What do you need to know?

Following a call for information earlier this year, the UK’s Competition and Markets Authority (CMA) has now announced the changes it intends to make to its merger review process. The majority of the changes are to the Phase 2 process, which is only encountered in a minority of formal reviews, namely those where the CMA believes the merger could lead to a substantial lessening of competition – at the time of writing, of the 76 merger reviews opened by the CMA since 1 January 2022, only nine (12%) had been referred to Phase 2 (whereas around 10% of non-simplified merger review procedures lead to a Phase 2 review in the EU). These changes largely seek to make the Phase 2 process more interactive, with a view to arriving at acceptable remedies proposals sooner in the process. The proposed changes follow a period of criticism of the CMA’s approach to merger enforcement and reflect a desire to improve the effectiveness of the UK merger review process. The proposed changes are being consulted on until 8 January 2024. 

Why is the CMA revising its Phase 2 procedures?

The amendments are being introduced against the backdrop of the UK’s exit from the EU. Post-Brexit, global deals that could affect competition in the UK and would previously have been the reviewed by the European Commission under its “one-stop-shop” principle are now often reviewed by the CMA in parallel, giving rise to divergent outcomes on clearance or acceptable remedies with surprising frequency. As the CMA’s responsibility has increased, so too has the brightness of the spotlight on its approach to merger enforcement which has also exposed the fact that the EU and UK merger processes are often not in sync. As explained below, some of the CMA’s proposals bring the UK process closer to that of the European Commission, suggesting that limiting (procedural) divergence could be a key driver behind these changes.Continue Reading Towards a More Interactive Merger Review Process: UK CMA Proposes Amendments