Competition Commission
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CC publishes new merger remedy guidelines
The Competition Commission (CC) is today publishing new guidelines which explain its approach to remedies, such as divestiture, prohibition and behavioural measures, where it decides that mergers are likely to lead to a substantial lessening of competition (SLC).
The guidelines provide a single source of guidance on merger remedies and emphasize measures that are effective and yet minimize burdens on customers, suppliers and merger parties. The new guidelines also cover areas such as intellectual property remedies and behavioural remedies which were not covered in detail in existing guidance.
The document is the latest in a series of guidance published by the CC under the Enterprise Act. The guidelines are available on the CC's website http://www.competition-commission.org.uk.
The publication follows a period of public consultation on draft proposals which started in May this year. In general, respondents to the consultation were supportive of our approach to choice of remedies. We have, however, modified the draft proposals in a number of areas to clarify our guidance in response to the consultation. We have also added more references to previous CC cases. Our response to the consultation is also published today on the CC's website.
Chairman of the CC, Peter Freeman said:
These new guidelines are part of the CC's commitment to a transparent and consistent approach to the UK merger control regime. The document takes account of the CC's experience of implementing remedies in recent years under the Enterprise Act and research into the outcome of remedies. Through this guidance, we are seeking to improve the effectiveness of our measures and reduce burdens on business.
We are very grateful for the way people have responded to the consultation. This has contributed significantly to the clarity of the final guidance.
Notes for editors
1. If a CC inquiry concludes that a merger is likely to result in an SLC, then the CC has to decide what actions it or other bodies should take to remedy, mitigate or prevent the SLC or any adverse effects resulting from it. These actions can take a variety of forms including prohibition, divestiture or behavioural measures such as rights of access to facilities and price caps. When selecting remedies, the CC is required by the Enterprise Act to 'achieve as comprehensive a solution as is reasonable and practicable to the substantial lessening of competition and any adverse effects' and may also take account of any relevant customer benefits resulting from the merger.
2. The CC implemented its first remedies under the Enterprise Act in 2004. In total, the CC has required remedies in 21 merger inquiries to date since the introduction of the Enterprise Act and has chosen divestiture or prohibition in 17 of these cases.
3. The new guidelines supersede the CC's existing guidance on divestiture remedies (CC8), existing guidance on interim measures and guidelines on remedial measures in the CC's general merger guidance (CC2). The approach in the new guidelines is consistent with these previous documents but has been clarified and extended. The new guidelines will apply to all merger cases where the remedies notice is published after the date of publication of this new guidance.
4. The new guidelines may be accessed at http://www.competition-commission.org.uk/rep_pub/ consultations/index.htm.
5. In parallel with the consultation on merger remedies, the CC is also reviewing its guidelines for the assessment and analysis of mergers in a joint exercise with the Office of Fair Trading. This aims to produce joint guidance for consultation in 2009.
6. Enquiries should be directed to Rory Taylor on 020 7271 0242 (rory.taylor@cc.gsi. gov.uk).
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