Closed consultation

Call for information: Phase 2 merger investigations

Updated 20 November 2023

1. Introduction

1.1 The CMA’s merger control function is part of its duty to promote competition for the benefit of consumers. Merger control procedures are designed to fulfil this duty as quickly and efficiently as possible, while ensuring that the merger parties’ rights to due process (and those held by third parties) are fully respected. It is also important that the process ensures that the perspectives of all parties who may be interested in, or affected by, the merger – including consumers and small businesses who may not be as well-resourced as larger stakeholders – can be taken into account.

1.2 The CMA is committed to being open and transparent about the work it does and how it engages with those directly involved in or affected by its work, while also, where appropriate, maintaining the confidentiality of information obtained in the exercise of its functions.

1.3 Phase 2 merger investigations are conducted by inquiry groups, selected for each case from the independent experts appointed by the Secretary of State to the CMA’s panel. The inquiry group oversees the merger investigation and makes the decision on whether a merger is likely to lead to a substantial lessening of competition and, if so, the appropriate remedies. The appointment of an independent group is intended to provide a “fresh pair of eyes” in relation to the CMA’s phase 1 investigation, in which a member of CMA staff decides whether the test for reference is met.

1.4 The process followed in a typical Phase 2 merger investigation is principally set out in the Guidance on the CMA’s jurisdiction and procedure^{[footnote 1]}. A CMA Phase 2 investigation currently offers multiple opportunities for the merger parties to engage directly (orally and in writing) with the ultimate decision makers in their case (ie the inquiry group), both in relation to the substantive assessment of a merger and in relation to any remedies that might be put in place in the event that it is ultimately considered that the merger raises competition concerns. A CMA Phase 2 merger control investigation is an open and transparent process, with considerable information about the CMA’s ongoing investigation being shared with the merging parties and their advisers (where appropriate through use of confidentiality rings) and, at key milestones, made public (through the CMA’s website) throughout the course of the investigation.

1.5 Notwithstanding the high degree of engagement and transparency currently provided, we are always keen to identify areas for further improvement. As we investigate a larger number of mergers in parallel with other national 1. competition authorities, we are also keen to learn from international best practice (recognising that there are some key differences in the applicable legal frameworks).

2. Scope of this call for information

2.1 The purpose of this call for information is to invite interested parties to provide views on aspects of the Phase 2 investigation process that could be revised to ensure that the process operates as effectively and efficiently as possible.

2.2 Our current focus is on changes that could be made within the existing legislation (taking into account the impact of the changes already proposed to the UK merger control regime in the Digital Markets, Competition and Consumers Bill).

2.3 In this regard, we note that important limits are imposed by the statutory regime. CMA Phase 2 merger investigations are subject to a strict deadline (of 24 weeks, which can be extended by 8 weeks where there are special reasons to do so), and the CMA operates subject to a statutory duty of expedition – ie a duty to complete its investigation as soon as reasonably practicable. Moreover, as a public authority, the CMA is not able to devote unlimited resources to its merger investigations. This means that there will always be limits to the extent of engagement with merger parties that is possible within a Phase 2 merger investigation (and providing new opportunities for engagement may only be possible where other steps typically taken within the current process no longer occur).

3. Key issues we want to explore

3.1 We are particularly interested to hear views on the following questions:

• Are there ways in which merging parties (and others) would be able to engage more effectively with inquiry groups in relation to the competitive assessment of a merger?
• Are there ways in which merging parties (and others) would be able to engage more effectively with inquiry groups in relation to remedies?
• Do the existing key opportunities to make written submissions (ie in response to the issues statement, annotated issues statement/working papers, provisional findings, and remedies working paper) work well? How could they be improved?
• Do the existing key opportunities for direct in-person engagement with the inquiry group (ie the site visit, main party hearing, and response hearing) work well? How could they be improved?
• What are the perceived barriers to engagement on possible remedies prior to the CMA’s provisional findings (and what factors might explain why the existing mechanism for ‘without prejudice’ remedies discussions in Phase 2 investigations has rarely been used in practice since its introduction in 2020)?^{[footnote 2]}
• Are there aspects of regimes in other jurisdictions that you consider might work well within the UK regime?

4. Responding to this call for information

4.1 We are seeking views from all interested parties.

4.2 The call for information opens on 29 June 2023 and closes at 5pm on 25 August 2023.

4.3 To respond to this call for information, please send your submission by email to phase2callforinfo@cma.gov.uk.

4.4 In providing responses, please identify any material that you consider to be confidential, and provide a description of why this is the case. The disclosure of information which relates to the affairs of an individual or any business of an undertaking, and which comes to the CMA in the course of this call for information, is governed by the statutory gateways in Part 9 of the Enterprise Act 2002 and such information can only be released in particular circumstances set out in that Act.

4.5 In parallel to this call for written submissions, we are seeking to engage directly with a wide range of stakeholders (for example, advisors, businesses, consumer and industry groups, and counterpart agencies internationally) to reflect on what works well and any areas for improvement.

5. Next steps

5.1 We will publish non-confidential versions of the responses to this call for information. These documents will be available on our webpages and respondents will be notified when they are available.

5.2 We will analyse the responses to this call for information and will take these into account when considering possible changes to our Guidance on the CMA’s jurisdiction and procedure^{[footnote 3]}. In due course, we intend to publish a revised draft version of this guidance (including revisions to aspects of the guidance that are not connected to engagement during the Phase 2 process) and will consult on all proposed additions and changes.

1. Mergers: Guidance on the CMA’s jurisdiction and procedure (CMA2), chapter 10. Certain aspects of the Phase 2 process are governed by other CMA guidance, including Rules of procedure for merger, market and special reference groups (CMA17) and Transparency and disclosure: Statement of the CMA’s policy and approach (CMA6). ↩

2. Mergers: Guidance on the CMA’s jurisdiction and procedure (CMA2), para. 12.14. ↩

3. As noted above, certain aspects of the Phase 2 process are governed by other CMA guidance and therefore possible changes to these guidance documents will also be considered to the extent necessary. ↩