Competition Commission
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Merger decisions under review
The Competition Commission (CC), together with the Office of Fair Trading (OFT) and the Department for Business, Enterprise and Regulatory Reform (BERR), has commissioned a study of some of past CC and OFT merger decisions. Following a competitive tendering process, we have appointed Deloitte & Touche, supported by Professor Stephen Davies of the University of East Anglia, to assess the analysis and decision-making in about eight merger cases decided between 2004 and 2006.
John Davies, Chief Economist of the CC, said:
When the CC or OFT decides whether to intervene in a merger case, the judgement is based on analysis of the likely future evolution of the market. We can all learn a lot by looking back at past decisions a few years later, to allow us to improve that analysis. I am delighted that we have been able to commission an external team with the right expertise to take an independent look at whether we and/or the OFT did everything possible to make the right decision.
The CC and the OFT have commissioned external and internal reviews of their past merger decisions before. However, this is the first such review of cases carried out under the Enterprise Act 2002, which substantially reformed the process of merger assessment, notably by making the competition authorities determinative rather than merely advisory to the Government. The project team is currently considering which merger decisions to examine, and will then proceed to interview market participants and gather data on subsequent market developments.
The lessons of past cases may also inform the CC's and OFT's thinking as they prepare to issue new joint substantive merger guidelines in 2009, following public consultation. (See news release: http://www.competition-commission.org.uk/press_rel/ 2008/apr/pdf/11-08.pdf.)
Notes for editors
1. The CC is an independent public body which carries out investigations into mergers, markets and the regulated industries.
2. The Enterprise Act 2002 empowers the OFT to refer to the CC completed or proposed mergers for investigation and report which create or enhance a 25 per cent share of supply in the UK (or a substantial part thereof) or where the UK turnover associated with the enterprise being acquired is over £70 million.
3. Further information on the CC and its procedures, including its policy on the provision of information and the disclosure of evidence, can be obtained from its website at: http://www.competition-commission.org.uk.
4. Enquiries should be directed to Rory Taylor on 020 7271 0242
