Competition & Markets Authority
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CMA sets out changes to Phase 2 merger processes

The Competition and Markets Authority (CMA) is planning to improve some aspects of its phase 2 processes as part of an evolution of how it investigates mergers.

  • New measures to further improve operation of Phase 2 investigations
  • Reforms offer parties even greater engagement with decision-makers and clear opportunities to engage early on remedies

The reforms were set out during a CMA-hosted conference in London on the future of merger control yesterday.  

CMA CEO Sarah Cardell and Chair of the Independent Panel Martin Coleman reinforced the importance of a robust, independent and evidence-based regime to protect against anti-competitive mergers, while also highlighting the importance of open and transparent processes which offer parties extensive engagement with decision-makers including on remedies. 

To that end, while the key tests to assess whether mergers raise competition concerns (which are set by statute) remain unchanged, the CMA is proposing a series of developments in the way in which its merger investigations are carried out.  

The CMA carried out a “stocktake” of its Phase 2 merger processes earlier this year. While the UK merger control process was generally working well, Brexit has expanded the range of mergers that the CMA considers. With more than 2 years of practice to look at since the CMA took on these additional responsibilities, it was keen to assess whether there were parts of the process that could work even better. 

Following a wide-ranging consultation, including with businesses, legal and economic advisors on UK and international merger cases, consumer and industry groups, and other competition authorities, the CMA is proposing several changes to further improve the Phase 2 process.  

In particular: 

  • the revised process will streamline the start of the Phase 2 investigation – enabling an earlier focus on the key issues at stake in the case
  • it will also improve the opportunities provided for all businesses affected by a merger to engage with the CMA Inquiry Group overseeing the investigation
  • changes to the remedies process should help incentivise merging parties to bring forward credible remedies to address concerns at the earliest possible stage. 

The plans are designed to enhance the UK’s merger control processes by putting in place “best in class” procedures that are clear, transparent, agile and efficient. 

Sarah Cardell, chief executive of the CMA, yesterday said:

“As the CMA discharges it’s new post-Brexit merger responsibilities, we will not shy away from taking, and defending, robust decisions to prevent anti-competitive deals which would harm UK businesses or consumers. We will also defend vigorously the importance of an independent, evidence-based approach.  

“The CMA is, however, an organisation that listens and learns, both in the course of the investigations we undertake but also in how we evolve our processes to ensure that the UK merger control regime operates as effectively as possible.  

“I’m pleased that today we can set out the results of our Phase 2 process “stocktake”. While the legal tests that we use to assess mergers remain unchanged, these process reforms should improve the running of our investigations, and have the potential to deliver a real step-change in aspects of the way the UK merger regime operates.” 

Martin Coleman, chair of the CMA’s Panel of Independent Experts yesterday said:

“No system is so good that it cannot be made better and the recent consultation has helped highlight a number of areas for improvement. In particular, enhancing the quality of interaction with the decision-making group; improving the level of feedback to the parties as the process develops; tempering the inquisitorial aspects of the system with more discursive approaches; and adopting a new approach to the discussion of remedies. 

“I emphasise that the outcome of a phase 2 investigation may depend also on the strategy that businesses and their advisers decide to pursue and on how merger parties decide to constructively approach the many choices that have to be made throughout the process. 

“It is through this combination of fair and efficient processes and effective engagement with merger parties, other businesses and consumers that we are best able to identify competition concerns and prevent or mitigate them where necessary.”  

The CMA also plans to make changes to its “de minimis” exception, including increasing the threshold beneath which it may deprioritise a merger from £15 million to £30 million. This will allow the CMA to allocate its staff and resources more effectively by deprioritising less important mergers.  

The consultation on the CMA’s proposed changes to its merger guidance is open until 8 January 2024.

To find out more and read the proposed changes in full, go to the Changes to CMA Mergers Guidance (CMA2) consultation page.  

The proposals were unveiled yesterday in speeches made by CMA CEO Sarah Cardell and Chair of the Independent Panel Martin Coleman at an event in London.  

Notes to Editors: 

  1. The proposed changes are not statutory and do not change the legal framework of the Enterprise Act 2002. The major components of the CMA’s merger processes, such as the use of independent panels to make final decisions at Phase 2, remain unaffected.  
  2. Phase 2 mergers are investigated by groups drawn from an independent panel of experts who are not employees of the CMA. 
  3. All media enquiries should be directed to the CMA press office by email on or by phone on 020 3738 6460.

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