Evaluations suggest ways to further improve merger review
The Competition and Markets Authority (CMA) is looking at ways to refine its merger assessment regime following a review of past cases.
A pair of reports published today make recommendations for ways in which the CMA can provide even better results for consumers and the wider economy by making improvements in the way it investigates mergers.
Sheldon Mills, CMA Senior Director, Mergers, said:
Businesses require our merger investigations to be prompt, thorough and fair and I am pleased that these evaluations into both our assessment of entry/expansion in merger cases and our remedies process recognise that we already produce good work.
We are always open to adapting our processes in light of new information and we are now planning to implement some changes following these reports.
In the first report, the CMA commissioned KPMG to review 8 cases, investigated by the CMA or its predecessor bodies the Office of Fair Trading (OFT) and the Competition Commission (CC), where mergers were cleared on the basis of entry or expansion of rival firms in the relevant market.
KPMG recommended that in future cases the CMA should take greater account of the potential cost of new entry into a market, the ability for firms to expand and the impact of local market conditions, including regulatory changes.
The second report, Understanding past merger remedies, builds on previous research, so that it now includes the evaluation of 15 merger remedies. The evaluation, which includes interviews with the companies involved as well as customers and competitors, looks at the effectiveness of the different types of mergers remedies used as well as the CMA’s remedies processes. The CMA is currently assessing the report to identify further improvements it can make in future phase 2 investigations.
These evaluation reports are the most recent from the CMA, continuing a valuable programme of reviewing past cases to understand what lessons can be learned and identify what improvements can be made. The learnings from these reports will help ensure that the CMA’s future merger decisions and approaches to remedy design deliver better outcomes for consumers, businesses and the UK economy.
Notes for editors
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. From 1 April 2014 it took over the functions of the CC and the competition and certain consumer functions of the OFT, as amended by the Enterprise and Regulatory Reform Act 2013. For more information see the CMA’s homepage on GOV.UK.
Enquiries should be directed to Simon Belgard (firstname.lastname@example.org, 020 3738 6472).