Overview: CMA's Merger Remedies Review Call for Evidence

2 Apr 2025 03:04 PM

techUK provides an overview of the CMA's call for evidence document for the Merger Remedies Review

Introduction

The Competition and Markets Authority (CMA) has launched a Call for Evidence to assess the effectiveness of current merger remedies in protecting competition and delivering positive outcomes for consumers. The review seeks input from businesses, legal experts, and other stakeholders to refine its approach and ensure that merger remedies remain effective in a rapidly evolving economic landscape.

The review is focused on whether existing remedies remain fit for purpose, how they interact with evolving market dynamics, and whether changes are needed to improve their effectiveness. It aims to enhance the clarity, predictability, and proportionality of CMA-imposed remedies.

We have created a brief overview of the Call for Evidence below. You can find the full details of the Review and Call for Evidence here.

Background on Merger Remedies

Merger remedies are interventions imposed by the CMA to address competition concerns arising from mergers. These remedies fall into two broad categories:

1. Structural remedies – These typically involve divestitures, such as requiring a merging firm to sell a business unit or assets to restore or maintain competition.
2. Behavioural remedies – These involve ongoing obligations placed on the merging firms, such as licensing agreements, access provisions, or non-discrimination commitments, to mitigate anti-competitive effects.

The CMA’s review seeks to assess the effectiveness of these remedies in addressing competition concerns and whether adjustments are needed to improve outcomes.

Key Areas of Focus

The CMA has outlined several areas for examination in its review:

1. The CMA’s Approach to Remedies

The CMA aims to assess whether its approach to designing and implementing merger remedies remains appropriate. This includes:

• Evaluating the effectiveness of different types of remedies in different market contexts.
• Considering whether structural or behavioural remedies are more effective in addressing specific competition concerns.
• Reviewing how the CMA assesses the risks associated with remedies and their long-term impact on competition.

2. Preserving the Benefits of Mergers While Protecting Competition

Mergers can lead to efficiencies and innovation that benefit consumers. The CMA is exploring how to ensure remedies allow firms to realise these benefits while safeguarding competition. Specific considerations include:

1. The types of cases in which the CMA can use remedies to ensure that potential pro-competitive efficiencies from mergers can be maximised and, in line with the Government’s strategic steer, how we can ensure we are discharging our functions in a way that supports growth and investment; and
2. Their approach to RCBs, so as to ensure that merger benefits can be preserved wherever possible.

3. Running An Efficient Process

The CMA is reviewing whether their engagement on remedies is currently working well and how the remedies processes can be further improved.

Specifically, they are considering:

1. Improvements to the Phase 1 remedies process to minimise the time and cost of a Phase 2 investigation;
2. How the new Phase 2 process and recent legislative changes can support well-reasoned, evidence-based remedies decisions at pace, and whether further refinements are needed as we gain practical experience;
3. How the CMA’s remedies process can align with the actions of competition authorities in other countries, in line with our 4Ps commitment to proportionality; and
4. Potential procedural improvements to the remedies implementation phase.

The Four 'P' Principles: Pace, Predictability, Proportionality, and Process

A key focus of the review is whether merger remedies align with the CMA’s guiding principles. It will be key to relate any responses to the consultations back to these four guiding principles:

• Pace: Ensuring that remedies are implemented promptly and effectively.
• Predictability: Providing businesses with greater certainty about how remedies are designed and enforced.
• Proportionality: Ensuring remedies are tailored to address competition concerns without imposing unnecessary burdens.
• Process: Streamlining the process for designing, negotiating, and implementing remedies to improve efficiency.

How to Respond to the Call for Evidence

The CMA invites stakeholders to provide input on the following key questions:

1. Are structural remedies generally more effective than behavioural remedies in addressing competition concerns?
2. How can merger remedies be designed to effectively address competition issues while allowing beneficial efficiencies?
3. What challenges do businesses face in implementing and complying with remedies?
4. How should the CMA adapt its approach to remedies to reflect changes in market dynamics and evolving competition concerns?

Stakeholders are encouraged to support their responses with empirical evidence, case studies, or practical experiences. Submissions can be made directly to the CMA within the consultation period which closes at 5pm on 12 May 2025.

Find all the details on the CMA's website here.

techUK will continue to engage with members to formulate a coordinated response to this consultation. We encourage businesses to participate in this process to help develop a framework that supports competition while fostering innovation and growth.

If you would like to contribute to techUK's response, please get in contact with Samiah (Samiah.Anderson@techuk.org) and Oliver (Oliver.Alderson@techuk.org).