Business secretary Jonathan Reynolds and the competition watchdog have unveiled plans for the body to move faster on merger decisions.
Reynolds said the UK needed a “regulation reset” and authorities should move away from “theoretical issues” that showed “little understanding of how businesses and markets actually operate”.
The Business department has published “a consultation on a new strategic steer for the Competition and Markets Authority to accelerate this work,” he said in a speech in London.
The move comes after former Amazon UK head Doug Gurr was last month appointed as interim chair of the competitions body, unexpectedly replacing Marcus Bokkerink, as the government pushes ahead with its drive to cut red tape.
Competition and Markets Authority chief executive Sarah Cardell welcomed the consultation, saying it set out “how free and fair competition, and robust consumer protection, can support innovation, productivity and investment”.
She said the body would take action to improve the way it looked at takeovers that would focus on — pace, predictability, proportionality and process.
The regulator said by June 2025 it will:
- Establish new rules to complete the pre-notification phase of its probes within 40 working days, against a current average of 65
- Cut the current target for straightforward Phase 1 cases from 35 working days to 25
Predictability and proportionality
The body said that its “objective is for as many of the deals as possible which raise competition concerns to be cleared with effective remedies, rather than be prohibited”.
It added that in March it would launch a review of its “approach to remedies, looking not just at the process but also how we strike the right balance between different types of remedies”.
In this review, the watchdog said it would look at “the potential for deals to deliver pro-competitive investment benefits”.
Cardell added: “I am confident this will help us to deliver on proportionality – so long as businesses and advisors engage with these objectives in good faith, only putting forward robust remedies proposals and well-evidenced claims around benefits.”
On global deals, the body will explore “how far, under existing law, we might be able to more clearly distinguish between deals with a distinct and direct UK impact, versus those where it may be more appropriate to watch closely whether action by other authorities could resolve UK concerns”.
Cardell also said she will publish a Mergers Charter in March, which aims “to break down barriers” between firms and the regulator.
This will involve “more direct engagement” with businesses and investors, outside of and during investigations. It will also include more senior meetings early during the watchdog’s reviews.
Cardell said: “We are already working at pace to bring about a step change in the operation of the mergers regime over the coming months.”
However, competition partner at law firm CMS Neil Baylis questioned whether these changes will alter the regulator’s legal obligation to judge mergers.
Baylis said: “The question is, will the Competition and Markets Authority be comfortable clearing transactions that previously would have been blocked or only cleared subject to commitments?
“The statutory test has not changed. If the Competition and Markets Authority becomes too lenient it risks being challenged by third parties who may not be so pleased to see anti-competitive transactions go through.”
