Press release

CMA consults on changes to merger investigations in smaller markets

The CMA is consulting on changes to reduce the number of mergers it investigates in smaller markets.

Woman signing papers

The Competition and Markets Authority (CMA) has a duty to refer mergers for an in-depth, phase 2 investigation if they could lead to a substantial lessening of competition (SLC). However, in certain circumstances it may not refer a merger, such as if it believes the relevant market is of insufficient importance.

The exception to the duty to refer is designed to avoid investigations where the costs involved would be disproportionate to the size of the market concerned. It enables the CMA to reduce the burden on companies and better target its resources for protecting consumers and businesses. The CMA can choose not to apply this exception in certain circumstances (see notes for editors).

The CMA is now seeking views on the proposed amendments to its guidance. These state that the CMA will raise the threshold for markets generally considered as sufficiently important to justify a merger reference to above £15 million from the current £10 million. It also proposes changing the figure for markets generally considered not sufficiently important from below £3 million to below £5 million.

Where the size of the market is between these 2 thresholds, the CMA will continue to assess whether the expected harm resulting from the merger would be greater than the cost of an investigation.

It is expected that the changes will reduce the number of mergers that are subject to investigations – in particular those subject to initial phase 1 examination.

Sheldon Mills, Senior Director of Mergers at the CMA, said:

It’s important that we focus our resources on those mergers with the most potential to harm customers. Raising the thresholds for when we review mergers in smaller markets will reduce the number of smaller investigations we carry out and so save time and money for both us and the companies involved.

As well as reducing the demands on smaller businesses, the updated thresholds proposed will help give them a clearer indication of whether a merger could require investigation.

Further details are available on the consultation page. The CMA would welcome views on these proposals and those responding should also supply a brief summary of the interest or organisation they represent. The consultation is open until 13 February 2017 after which the CMA will consider responses received before finalising the guidance.

Notes for editors

  1. The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
  2. The current guidance was issued by the Office of Fair Trading (OFT) in 2010 and adopted by the CMA in 2015.
  3. The exception is not available in relation to any market or markets if the CMA believes that merging parties could in principle offer a solution to the CMA’s concerns via undertakings in lieu of a reference. The CMA will also take account of the wider implications of its decisions in this area, and will be less likely to exercise its discretion, and therefore more likely to refer, where the merger is potentially replicable across a number of similar markets in a particular sector.
  4. Enquiries should be directed to Rory Taylor (, 020 3738 6798).
  5. For information on the CMA see our homepage, or follow us on Twitter @CMAgovuk, Facebook, Flickr and LinkedIn.
Published 23 January 2017