The Merger Control Review: United Kingdom
Mergers qualify for review under the UK rules if they meet a test relating to the turnover of the target or, alternatively, a 'share of supply' test. The Competition and Markets Authority (CMA) has the power to carry out an initial Phase I investigation, and has a duty to refer any qualifying transaction for a detailed Phase II investigation where it believes that the merger could give rise to a substantial lessening of competition. Phase I decision-making is undertaken by the senior director of mergers or another senior CMA official, while Phase II decision-making is undertaken by an independent panel drawn from a pool of senior experts in a variety of fields.
Remedy undertakings in lieu of a Phase II reference may be accepted by the CMA. The CMA's in-depth Phase II investigation may lead to a prohibition decision, a decision that the transaction should be allowed to proceed subject to undertakings, or an unconditional clearance.
Notification under the UK system of merger control is 'voluntary' in the sense that there is no obligation under the Enterprise Act 2002 (EA) to apply for CMA clearance before completing a transaction. The CMA may, however, become aware of the transaction through its market intelligence functions (including through the receipt of complaints) and impose interim orders preventing or unwinding integration of the two enterprises pending its review. There is a risk that it may then refer the transaction for a Phase II investigation, which could ultimately result in an order for divestment.
In certain limited circumstances (where the merger raises a defined public interest consideration), the UK system allows the relevant Secretary of State to intervene in relation to mergers. Currently, public interest considerations are limited to national security, quality and plurality in the media, accurate presentation of news and free expression in newspaper mergers, maintenance of stability in the UK financial system and a new ground for public health emergencies.2 The National Security and Investment Act 2021 (NS&I) regime, which is expected to come into force later in 2021, will replace the existing national security ground of public interest intervention with a formal notification process for mergers involving sensitive sectors.
The Competition Appeal Tribunal (CAT) may review decisions made by the CMA or the Secretary of State in connection with a reference, or possible reference, of a merger. An appeal lies, on a point of law only, from a decision of the CAT to the Court of Appeal and requires the leave of either the CAT or the Court of Appeal.
Year in review
The number of Phase I merger decisions made by the CMA in the 2020–2021 financial year (38) was considerably down on the preceding financial year (62).3
Of the 38 cases decided during the year, 18 were cleared unconditionally, representing just under half, fewer than the 61 per cent in the preceding year. Nine cases were referred for Phase II review, which is around 24 per cent of cases, a slight increase on the preceding year. Undertakings in lieu of a reference (UILs) were accepted in six cases, the same as the preceding year.
A total of seven Phase II decisions were published by the CMA in the 2020–2021 financial year, down from the 10 published in the previous year. There was one unconditional clearance, and two clearances were granted subject to divestiture remedies. The CMA prohibited four mergers during this period, an increase from the two cases it prohibited in the preceding financial year.4 Five cases were cancelled or abandoned, two more than in the preceding year.
Overall, the CMA intervened (i.e., prohibited or accepted remedies) in just under a quarter of cases in the 2020–2021 financial year, which is around five times the rate of intervention from the European Commission over a similar period. The higher intervention rate can be explained by the voluntary nature of the UK merger control regime, which means that parties may elect not to notify transactions that do not give rise to significant competition issues.
ii Interim measures
The CMA has powers to impose interim measures to freeze or unwind integration and prevent pre-emptive action, including in relation to anticipated mergers at Phase I (see Section III.vi). This ensures that, while notification is voluntary in the United Kingdom, the CMA is able to prevent action being taken that would result in irreversible damage to competition. The CMA imposed initial enforcement orders in 11 Phase I cases in the 2020–2021 financial year. Interim orders were imposed in two Phase II cases in the financial year.5 The CMA granted a total of 44 derogations from initial enforcement orders in the financial year.6 The CMA consulted on new guidance on the use of interim measures in merger investigations in April 2021.7
During the coronavirus pandemic and lockdowns, merging parties were faced with unprecedented operational challenges, resulting in a significant increase in derogation requests from interim measures. The CMA has publicly stated that it has not changed its approach during the pandemic, but it did grant extraordinary derogations in some cases, including information-sharing in Circle/BMI, a hospital merger, and a derogation for site closures in Breedon/Cemex.8 The CMA also imposed a penalty notice for an alleged breach of interim measures in JD Sports Fashion/Footasylum but subsequently withdrew the notice in light of an appeal by the parties.
iii Timetables and the impact of the coronavirus pandemic
One of the key features of the UK regime is the existence of a statutory 40-working-day timetable at Phase I. The CMA recognises that this presents its own challenges, in particular balancing the need to obtain as much information as possible upfront (before the clock starts running) against the burden such information requests may place on businesses. The CMA aims to start the statutory clock within 20 working days (on average across all cases) of submission of a substantially complete draft merger notice. However, the average length of the total pre-notification period was 55 working days in the 2020–2021 financial year, which is a significant increase from the 37 working days in the previous year.9 This increase is largely due to the pandemic, which initially placed significant pressure on the CMA's ability to deal with its caseload. Indicators suggest that operations have now returned substantially to normal.
During the 2020–2021 financial year, the average length of Phase I was 35 working days, compared with 37 working days in the preceding year.10 The average length of a 'significant' merger investigation by the CMA (defined as from deal announcement to either the Phase II decision or UIL acceptance) was just under 12 months, which is similar to comparable investigations by the US Federal Trade Commission (11.4 months) over a similar period but shorter than those by the European Commission (14.9 months).11
iv A year of renewal for CMA guidance
The CMA has conducted a thorough review of its guidance over the past year, including issuing new versions of its merger assessment guidelines and its guidance on jurisdiction and procedure. These changes in part reflect the CMA's response to the UK's departure from the European one-stop shop and its push to take its post-Brexit place alongside other global competition authorities. The new guidance also reflects changes to the CMA's practice that have occurred in recent years, particularly in relation to an expanded approach to jurisdiction, usage of dynamic theories of competition and a greater focus on mergers in innovative sectors. The CMA has also consulted on a range of other guidance documents, including its merger intelligence guidance and its interim measures guidance, and it expects to consult on its de minimis guidance later in 2021.
Together, these changes display the CMA's intention to act as an interventionist competition authority. This position was further reinforced through the issuance of a joint statement with the German and Australian competition authorities in April 2021 calling for more rigorous merger control.12
v Public interest interventions
As noted in Section I, where a merger raises a defined public interest consideration, the UK system allows the relevant Secretary of State to intervene in relation to mergers. To do so, the Secretary of State will issue a public interest intervention notice prior to the CMA issuing its decision on reference.
The 2020–2021 financial year exceptionally saw no intervention notices issued. However, three mergers have been subject to intervention on national security grounds in 2021–2022: Imprivata/Infosec, which was notified in March 2021, referred to Phase II investigation in April 2021 and abandoned in May 2021; and NVIDIA/Arm and Advanced Micro Devices/Xilinx, both of which are still in progress at the time of writing.
Once the NS&I regime becomes operational, expected later in 2021, mergers with possible national security concerns will instead fall under that regime. At the time of writing, the details of the sectors to which the regime will apply have not been finalised, but the government has consulted on 17 sectors, covering military and dual-use, energy, data, communications and transport infrastructure, certain types of advanced manufacturing, AI, cryptography and research into synthetic biology. The public interest intervention regime will remain in place for the other public interest considerations.
The merger control regime
i Threshold issues
Under the UK system, a 'relevant merger situation' (i.e., a transaction potentially qualifying for review) occurs when two or more enterprises have ceased to be distinct. This can occur either through common ownership or common control. Common ownership involves the acquisition of an enterprise so that two previously distinct enterprises become one. Common control involves the acquisition of at least one of the following: de jure or legal control (a controlling interest); de facto control (control of commercial policy); or material influence (the ability to make or influence commercial policy).
The concept of material influence has been drawn widely by the UK competition authorities. For example, the breadth of the concept can be seen in JCDecaux/Concourse where the Office of Fair Trading (OFT) found that, even in the absence of an equity stake, material influence had been acquired by virtue of an option to appoint two out of three board members and the ability to restrict the target's capability for expansion. More recently, the CMA established jurisdiction over Amazon's acquisition of a 16 per cent interest in Deliveroo, finding material influence on the basis of certain factors relating to Amazon's specific status and board representation.13
A merger situation will qualify for review if it meets the turnover test or the share of supply test. Where the UK turnover of the target exceeds £70 million, the turnover test will be satisfied. The share of supply test will be satisfied where the merger creates an enlarged business supplying 25 per cent or more of goods or services of any reasonable description or enhances a pre-existing share of supply of 25 per cent or more. The share of supply test has been interpreted very broadly by the CMA in recent years.14
New jurisdictional thresholds were introduced in 2018 on national security grounds for certain defined sectors involving the development of military and dual-use (i.e., civilian and military) equipment and systems, as well as parts of the advanced technology and IT sector.15 For these sectors, the turnover threshold is lowered from £70 million to £1 million and the share of supply test is met if the pre-merger share of supply of the target is 25 per cent or more (irrespective of whether that share is increased). The NS&I regime removes these special jurisdictional thresholds.
If the CMA believes that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition in a UK market, then it will refer the merger for a Phase II investigation. In general, a completed merger will no longer qualify for a Phase II reference four months after the date of its implementation. Time will not begin to run, however, until the 'material facts' of the merger (i.e., the names of the parties, nature of the transaction and completion date) have been made public or are given to the CMA (if neither occurs prior to completion). Time will not run where UILs are under negotiation, or where the parties are yet to comply with an information request from the CMA. The four-month period may also be extended by agreement between the CMA and the merging enterprises, but for no more than 20 days.
ii Substantive test
In its assessment of mergers, the CMA considers whether the transaction may be expected to give rise to a substantial lessening of competition. At Phase I, a reference must be made if it is or may be the case that a merger may give rise to a substantial lessening of competition (known as the 'realistic prospect' threshold), while at Phase II a 'balance of probabilities' threshold applies.16 As a result, it is possible for mergers to be referred to Phase II and subsequently be cleared unconditionally, although, as noted in Section II.i, a significant proportion of recent Phase II cases have been abandoned, blocked or subject to remedies.
The CMA has adopted new substantive assessment guidelines, which apply to all mergers from March 2021 onwards.17 These guidelines reflect changes in practice since the last edition was published in 2010. The guidelines show that the CMA is now more open to working within uncertainty, including using flexible market definitions and focusing more on dynamic competition, including potential competition and likely future market behaviour. The guidelines also take into account the global economic transition towards tech businesses (e.g., by making provision for two-sided markets and innovation).
The CMA applies different approaches at Phase I and Phase II to assessing the merger counterfactual. At Phase I, the transaction is generally measured against the prevailing conditions of competition unless it is unrealistic to do so or there is a realistic counterfactual that is more competitive than the pre-merger conditions of competition. At Phase II, the CMA will measure the transaction against the 'most likely scenario'.
The most notable situation where the CMA may use a counterfactual different to the prevailing conditions of competition is in a failing firm scenario. However, in practice, it is often difficult to argue for its application, especially at Phase I. The CMA notably considered the failing firm test in Amazon/Deliveroo. The CMA initially accepted a failing firm counterfactual in its Phase II provisional findings in April 2020 in light of a deterioration in Deliveroo's financial position as a result of covid-19. However, in light of new information about the impact of the pandemic on Deliveroo's business, the CMA revised its provisional findings in June 2020 and concluded that a failing firm counterfactual was no longer appropriate. Notwithstanding this reversal, the CMA ultimately cleared the deal unconditionally.
iv The notification procedure
An application for clearance is made using the formal merger notice.18 The initial period within which the CMA must make a decision on whether to make a reference is 40 working days from the first working day after the CMA confirms to the parties that the merger notice is complete. This initial period may be extended where the parties have failed to comply with the requirements of a formal information request under Section 109 of the EA or where the Secretary of State has served a public interest intervention notice.
The CMA merger notice requires a large amount of information. The CMA therefore strongly encourages parties to make contact in advance of notification to seek advice on their submission, not only to ensure that the notification is complete, but also to lessen the risk of burdensome information requests post-notification. Pre-notification discussions also help the CMA to determine any jurisdictional issues and whether a case is likely to give rise to any substantive issues that might trigger its duty to refer.
It is possible for the parties to request that the CMA 'fast-tracks' a merger reference where there is evidence that an in-depth review is likely to be required. This option may be attractive to parties in cases where a reference appears inevitable, as it allows for Phase I of the review process to be truncated.
The CMA levies substantial filing fees in respect of the mergers it reviews, with fees of between £40,000 and £160,000, depending on the turnover of the target business.
New procedural guidance was introduced in December 2020, which reflects changes in the CMA's practice in recent years and the effects on procedure of the UK's departure from the EU, and attempts to improve the efficiency of the merger review procedure.19
v Informal advice
Where there is evidence of a good-faith intention to proceed and there is a genuine competition issue, prior to submitting a merger notice or initiating pre-notification discussions, it may be possible to obtain informal advice from the CMA as to whether it is likely to refer the merger for a Phase II investigation. There is no standard timetable for the provision of informal advice, but where it is intended that the advice will be given following the conclusion of a meeting, the CMA will endeavour to schedule that meeting within 10 working days of receipt of the original application. The resulting advice is confidential and does not bind the CMA.
vi Interim measures
As outlined above, the CMA has powers to impose interim measures to freeze or unwind integration and prevent pre-emptive action. Financial penalties may be imposed for breaches of such measures (capped at 5 per cent of the aggregate group worldwide turnover). If there are relatively high risks of pre-emptive action or concerns about compliance with the interim order, the CMA also has the power to require a monitoring trustee to be appointed to ensure compliance with the interim orders.
The CMA guidance on the use of interim measures sets out: the circumstances in which measures will typically be imposed; the form that the measures will typically take; the type of derogations that the CMA is likely to grant; and the timing for their implementation.20 The CMA will normally make an order where it has reasonable grounds to suspect that two or more enterprises have ceased to be distinct (i.e., in respect of completed mergers) and will normally do so almost immediately. Given that the risk of pre-emptive action is generally much lower in relation to anticipated mergers, the CMA has noted that it would typically engage with parties before making an order in those circumstances. Of the 11 interim enforcement orders imposed in the 2020–2021 financial year, only one was imposed in the context of an anticipated merger.21
The CMA has stated that it would generally not expect to impose an order limiting the parties' ability to complete an anticipated merger unless it had strong reasons to believe that completion will occur prior to the end of Phase I and the act of completion itself might amount to pre-emptive action that would be difficult or costly to reverse (e.g., where the act of completion would automatically lead to the loss of key staff or management capability for the acquired business). The CMA may also consider creating a tailored interim order in cases where this is likely to optimise procedural efficiency and avoid unnecessary disruption to the merging parties' businesses. Therefore, absent exceptional circumstances, it is expected that parties will still be able to complete transactions prior to CMA clearance.
The CMA is willing to grant derogations from interim orders. The CMA advises parties to raise derogation requests as early in the process as possible, preferably in a single comprehensive request. In November 2020, the CAT dismissed an appeal by Facebook against the CMA's refusal to grant certain derogations from an initial enforcement order imposed in respect of its acquisition of GIPHY. In dismissing the appeal, the CAT noted that a corollary of the voluntary nature of the regime is that the CMA is given wide powers to suspend the integration of merging companies and it is for merging parties to satisfy the CMA that the relaxation of any interim measures imposed by the CMA is justified.22 The CAT's judgment was subsequently upheld by the Court of Appeal.
The CMA will seek to release merging parties from some or all of the obligations incumbent in an interim order as early as is appropriate in the circumstances of the case, including during Phase II for parts of the business about which the CMA is no longer concerned. The CMA may also release interim orders following a state of play meeting if it is decided that the case will be cleared.
In April 2021, the CMA consulted on changing its interim measures guidance. It observed that it has become aware of merging parties taking insufficient steps to ensure compliance, and so proposes to strengthen the regime in several respects. The proposed changes include requiring parties to institute more compliance procedures and controls, and to engage more with the CMA on what constitutes adequate compliance. At the time of writing, the CMA had not issued new guidance.
vii Exceptions to the duty to refer
As explained above, the CMA has a statutory duty to refer a relevant merger situation for a Phase II investigation where it believes that it is or may be the case that a merger has resulted or may be expected to result in a substantial lessening of competition in a UK market. The CMA has published guidance on the statutory exceptions that apply to the duty to refer potentially problematic mergers to a Phase II investigation, and separate guidance on remedies.23
The remedies guidance sets out the criteria for accepting undertakings that may be offered by the merging parties in lieu of a reference. The objective of these undertakings is to ensure that competition following implementation of the remedy is as effective as pre-merger competition. To discharge the CMA's duty to refer, any undertakings offered by the parties should be clear cut and capable of ready implementation. 'Clear cut' is stated in the remedies guidance to mean that there are no material doubts about the overall effectiveness of the remedy and that it achievable in the constraints of the Phase I timetable. It is most common for undertakings to relate to the sale of a part of the merged assets; the CMA has stated a preference for structural remedies and is generally reluctant to accept behavioural remedies. The CMA has nonetheless in the past accepted a number of 'quasi-structural' remedies with behavioural features.24 It is becoming increasingly common for the CMA to require an 'upfront buyer', in other words, for a buyer of the divestment assets to be identified and approved by the CMA before clearance is granted.
The merging parties have five working days from the issuance of a substantial lessening of competition decision (SLC decision) to offer undertakings to the CMA, although they may offer them in advance should they wish to do so. The CMA then has until the 10th working day after the SLC decision to decide whether the offered undertakings might, in principle, be acceptable as a suitable remedy to the substantial lessening of competition. If the CMA decides the offer might, in principle, be acceptable, a period of negotiation and third-party consultation follows. The CMA is required to decide formally whether to accept the offered undertakings, or a modified form of them, within 50 working days of providing the parties with the SLC decision, subject to an extension of up to 40 working days if there are special reasons for doing so.
The CMA's duty to refer may also be discharged in other circumstances, namely in respect of small markets (de minimis mergers), mergers where there are sufficient efficiencies to offset any competition concerns and merger arrangements that are insufficiently advanced. In relation to de minimis mergers, the guidance states that, for markets with an aggregate turnover exceeding £15 million, the benefits of an in-depth Phase II investigation may be expected to outweigh the costs. However, for markets with an aggregate turnover of less than £5 million, the CMA will generally not consider a reference to be cost-effective or justified provided that there is, in principle, no clear-cut UIL available (though this is not to be considered a 'safe harbour'). For markets with an aggregate turnover of between £5 million and £15 million, the CMA will consider whether the expected customer harm resulting from the merger is materially greater than the average public cost of a Phase II reference. The CMA's general policy is also not to apply the de minimis exception where clear-cut UILs are available. The CMA applied the de minimis exception in three cases during the 2020–2021 financial year.25
viii Phase II investigations
Upon the making of a Phase II reference, there are a number of consequences for the transaction – some arising automatically, some relevant only if invoked by the CMA. When a reference is made in relation to a merger that has not yet been completed, the EA automatically prohibits the parties from acquiring interests in each other's shares until such time as the Phase II inquiry is finally determined. This restriction can be lifted only with the CMA's consent.
In relation to completed mergers, from the point of reference, the EA prohibits any further integration of the businesses or any transfer of ownership or control of businesses to which the reference relates (although in practice, the CMA is likely to have imposed an interim order at Phase I in any event).
Unless the CMA releases or replaces an interim order made during Phase I, it will continue in force for the duration of the Phase II inquiry. If an interim order was not made at Phase I or if it is necessary to supplement the measures previously put in place at Phase I, the CMA may impose a new order or accept interim undertakings from the parties.
The CMA is obliged to publish a report, setting out its reasoned decisions, within a statutory maximum of 24 weeks (extendible in special cases for a period of up to eight weeks). The CMA has a statutory period of 12 weeks (which may be extended by up to six weeks) following the Phase II review within which to implement any remedies offered by the parties.
Any party aggrieved by a decision of the CMA (including a decision not to refer a merger for a Phase II investigation) or the Secretary of State may apply to the CAT for a review of that decision. Appeals against merger decisions must be lodged within four weeks of the date the applicant was notified of the disputed decision or the date of publication, if earlier. Lodging an appeal does not have a suspensory effect on the decision to which the appeal relates. In determining an application for review, the CAT is statutorily bound to apply the same principles as would be applied by the High Court on an application for judicial review.
There have been several high-profile appeals against merger decisions over the past year. In November 2020, the CAT partially allowed JD Sports' appeal against the CMA's prohibition of its acquisition of Footasylum. The CAT agreed with JD Sports that the CMA should have followed up with Footasylum's suppliers and lenders when assessing the parties' claims about the effect of covid-19. It also found that the CMA should have gathered more evidence on the competitive constraint posed by suppliers' direct-to-consumer operations in light of the pandemic. For these reasons, it quashed the CMA's decision.26
In January 2021, the CAT quashed the CMA's Phase II prohibition of the FNZ/GBST merger. Following receipt of the notice of application made by FNZ, the CMA had identified potential errors in its market share calculations and therefore requested the CAT to quash its decision and to refer the matter back for reconsideration.
In May 2021, the CAT ruled against Sabre in its challenge to the CMA's prohibition of its acquisition of Farelogix. Among other grounds, the parties challenged the CMA's jurisdiction. Despite finding that the target had 'no material turnover in the UK', the CMA asserted its jurisdiction on the basis of the supply of certain services to British Airways that facilitated the indirect distribution of airline content to travel agents in the UK. The CAT upheld the CMA's position that this was sufficient to establish jurisdiction on the basis of the share of supply test.27
Other strategic considerations
i Whether to notify
Given that notification under the UK system is voluntary, the question of whether clearance should be sought from the CMA in a particular case is one for the parties – and, in particular, the purchaser – to consider. This is essentially a question of what level of commercial risk is acceptable.
Where the parties elect not to notify a transaction, the CMA may still become aware of it as a result of its own market intelligence functions, including through the receipt of complaints. The CMA has a dedicated Mergers Intelligence Committee responsible for monitoring non-notified merger activity and liaising with other competition authorities. The CMA's newly re-issued merger intelligence guidance explains when merging companies, that do not propose to notify their transaction, should submit a briefing note to the CMA.28 When deciding whether to call in a non-notified merger, the CMA has powers to request information from the parties and will also accept submissions from the parties on jurisdictional, de minimis and substantive issues. The CMA is willing to give an informal indication that it does not at that point in time intend to call in a merger.
As at 1 March 2021, the Committee had reviewed over 550 transactions during the 2020–2021 financial year. Seven Phase I investigations were launched during the financial year as a result of the Committee's review of those transactions, although none of them resulted in a Phase II investigation.
As noted above, the fact that a merger has been completed does not prevent the CMA from investigating and referring it for a Phase II investigation or accepting UILs. While the substantive assessment of anticipated and completed mergers ought to be identical, the CMA can be expected to impose interim orders while it considers a completed merger. In addition to ordering the parties to stop any integration that might constitute pre-emptive action, the CMA may also require the parties to unwind any integration steps that have already taken place.
An additional risk to bear in mind is that the initial period for a Phase I investigation may be reduced to less than 40 working days if the parties elect not to notify a completed merger. The CMA must comply with the four-month statutory deadline for a reference under the EA, which will start to run when the 'material facts' of the merger have been made public or are given to the CMA. If the CMA's timetable is compressed in this manner, it may mean that it has insufficient time to obtain evidence that would support a Phase I clearance, without the need for a Phase II investigation.
ii Interaction with the European Union
The UK left the EU on 31 January 2020 following the results of the 2016 referendum. Pursuant to the UK–EU Withdrawal Agreement, the UK was treated for most purposes as if it were still an EU Member State until 31 December 2020. Since that date, the one-stop-shop principle no longer applies with respect to the UK, meaning that businesses may need to submit parallel notifications in the UK and EU to obtain clearance for a deal.
iii Cross-border cooperation
Since the expiry of the Brexit implementation period on 31 December 2021, the CMA is no longer a member of the European Competition Network. Nevertheless, the EU–UK Trade and Cooperation Agreement provides a basis for cooperation on competition law matters, including the option to enter into separate agreements on cooperation and coordination. Current experience shows that the CMA and European Commission are cooperating closely in relation to cases that may affect competition in both the UK and EU.
The CMA also continues to participate in the International Competition Network, an informal network that seeks to develop best practice among competition agencies around the world. The CMA's new procedural guidance sets out how the CMA proposes to interact with European and international merger regulators on multinational mergers in the future.
Outlook and conclusions
The CMA has been very active over the past year, as it prepared to take its post-Brexit place alongside other global competition authorities. It shows no signs of slowing down and is expected to continue its campaign of rigorous enforcement of UK merger control law.
The CMA has stated in its 2021 to 2022 Annual Plan that it expects a significant increase in the number of merger cases and UK elements of international competition enforcement cases as it acquires jurisdiction over cases previously reserved to the European Commission.29 The CMA notes that this may result in prioritising the most important cases, especially in light of the coronavirus pandemic.
The CMA is also expected to continue its focus on the digital economy, including through the operation of the new Digital Markets Unit.
1 Jordan Ellison is a partner and Paul Walter is a senior business development consultant at Slaughter and May. The authors would like to thank Philip McDonald, associate at Slaughter and May, for his help in preparing this chapter.
2 Introduced by the Enterprise Act 2002 (Specification of Additional Section 58 Consideration) Order 2020 in response to the coronavirus pandemic.
4 Sabre/Farelogix, JD/Footasylum, FNZ/GBST and TVS Europe/3G.
5 FNZ/GBST and Hunter Douglas/247 Home Furnishings.
6 Mergers updates, Law Society Competition Section seminar, 2 March 2021. 2020–2021 financial year figures taken from this seminar do not include data for March 2021.
7 The current guidance at the time of writing is Interim Measures in Merger Investigations, CMA108 (June 2019).
8 Mergers updates, Law Society Competition Section seminar, 2 March 2021.
12 Joint statement by the CMA, the German Federal Cartel Office and the Australian Competition and Consumer Commission on merger control, April 2021.
14 For instance, in Roche/Spark Therapeutics, the target company was not engaged in the commercial supply of any goods or services in the UK and did not generate any turnover in the UK. Nevertheless, the CMA asserted jurisdiction on the basis of the combined share of the parties of employees working on activities related to the development of certain novel treatments in the UK.
15 The changes were brought into effect by the Enterprise Act 2002 (Share of Supply Test) (Amendment) Order 2018, the Enterprise Act 2002 (Turnover Test) (Amendment) Order 2018 and the Enterprise Act 2002 (Share of Supply) (Amendment) Order 2020. See also 'Guidance on changes to the jurisdictional thresholds for UK merger control' (June 2018) CMA90.
16 See OFT v. IBA Health Ltd  EWCA Civ 142.
17 Merger Assessment Guidelines (March 2021), CMA129.
18 The CMA has made a number of changes to the merger notice form, reflecting comments received in a consultation in 2017, which are intended to reduce the overall amount of information that businesses need to provide.
19 Mergers: Guidance on the CMA's jurisdiction and procedure (December 2020) CMA2revised.
20 Guidance on interim measures in merger investigations (June 2019), CMA108. This guidance is due to be updated after a CMA consultation in 2021.
21 Mergers updates, Law Society Competition Section seminar, 2 March 2021.
22 Facebook v. CMA  CAT 23.
23 Mergers: Exceptions to the duty to refer (December 2018) CMA64, Merger remedies (December 2018) CMA87.
24 For example, in Mastercard/VocaLink, the CMA accepted a network access remedy under which VocaLink agreed to make its connectivity infrastructure available to a new supplier of infrastructure services to the LINK ATM network. In addition, VocaLink agreed to transfer to LINK the intellectual property rights relating to a particular messaging standard and Mastercard agreed to contribute to LINK members' switching costs.
25 Mergers updates, Law Society Competition Section seminar, 2 March 2021.
26 JD Sports v. CMA  CAT 24.
27 Sabre v. CMA  CAT 11.
28 CMA's mergers intelligence function: CMA56revised (December 2020).
29 CMA Annual Plan 2021 to 2022 (March 2021).