Faster, Fairer, Focused? How the CMA Plans to Lighten the Load on Mergers

On 20 June, the Competition and Markets Authority (CMA) announced the latest raft of changes intended to refocus UK merger control. As we discussed in our previous blog, the changes – prompted by pressure from the UK Government – are intended to ensure a better targeted and more proportionate merger control regime, in support of the Government’s “overriding national priority” of growth. 

While the CMA had previously signalled the broad thrust of its intended changes back in February, it has now issued draft guidance setting out the detail of how the revised regime will operate in practice. 

In general, the draft guidance is consistent with the signal of a broader change of approach in merger investigations.  The CMA wants to give the businesses involved in a merger investigation the best possible opportunity to “make their case”, and to move quickly and efficiently while doing so.  But, as described below, while the proposed changes are promising for dealmakers, many of them will require careful navigation.

More engagement up-front – so fewer surprises later?

More opportunities for engagement with senior staff (which were previously ad hoc) will now be “hardwired” into the CMA’s investigatory timetable.  In particular, the draft guidance provides for “teach-ins” to be held as standard in the early stages of pre-notification (replicating the introduction of similar meetings as standard in last year’s reforms to the Phase 2 process), along with additional “state of play” calls during pre-notification and shortly before the CMA opens its formal investigation.

But while the new regime provides additional visibility over the CMA’s developing thinking, there’s no change to the existing “issues meeting” process, where merging parties are required to provide a quick and compelling rebuttal to the CMA’s concerns.  As these concerns are, in practice, often heavily influenced by third-party evidence, which might only be received by the CMA during the formal investigation, the ability to “make the case” where unexpected issues arise at a late stage will remain critical in securing good Phase 1 outcomes.

The need for speed

The draft guidance provides for “straightforward” clearance decisions (i.e., where an “issues meeting” isn’t required) to be issued two weeks earlier – by the end of the fifth (rather than seventh) week of the CMA’s 8-week investigation.

While this brings the CMA into line with the European Commission’s five-week timeline, the change is likely to have only a limited impact in practice, given that the UK is a voluntary regime and merging parties are already able to close transactions without waiting for clearance.  In particular, merging parties would often already have enough comfort to close transactions (without an initial enforcement order being imposed) where the CMA has indicated, at the “state of play” discussion that takes place between working day 10 and 25, that it is minded to clear a deal. 

Another part of the approach to run cases more efficiently is the introduction of a new “KPI” for the pre-notification process that precedes the opening of a formal investigation.  The CMA is committing to ensuring that this period last no longer than 40 working days (and will publish stats to allow its homework to be marked). But the bar to start the KPI “clock” running is high – to do so, the merging parties will have to submit a complete merger notice covering all material overlaps and non-horizontal links, accompanied by all supporting materials (including the extensive set of internal documents required to be provided with a merger notice) and all of the contact details that the CMA will need to conduct its investigation.  In fact, at the same time, the CMA is proposing to expand the information that is required to be provided in the merger notice (to include information that has “historically” been requested by the CMA in pre-notification), further increasing the burden on the merging parties at this stage.

The KPI can also be “turned off” at the request of the merging parties – for example to facilitate international alignment, “without prejudice” discussions on remedies, or simply to provide more time for engagement in complex cases. Ultimately, it will be the CMA that decides when to launch an investigation and, therefore, when the KPI “clock” starts ticking, which could make transaction timing more complex.

Merging parties will therefore continue to need to think carefully about how to best navigate the pre-notification process.  Merging parties who want to rely on the KPI “clock” to move their case along will need to have a good plan to deliver a complete notification as quickly as possible.  Merging parties who want to take a more nuanced approach to pre-notification process will still need to understand how to make their case and engage with the CMA as effectively as possible, on the issues upon which their case will turn, while maintaining momentum.

A reduced role on (at least some) global deals

The new draft guidance confirms the CMA’s intention to play a reduced role on (at least some) global transactions, with the CMA stating that it may take a “wait and see” approach in multi-jurisdictional mergers. The CMA will draw a “distinction” in practice between transactions that have a “UK-specific impact” and those that concern global (or at least broader than national) markets.  The CMA will prioritise the investigation of those “UK-specific” deals, and may hold off from opening an investigation into global deals to see whether remedies in other jurisdictions would address any competition concerns that could arise in the UK.

As we explained in our February blog, the degree of certainty that the CMA is able to provide to merging parties in these “wait and see” cases (given the impact that the opening of a CMA investigation at a later stage could have on overall transaction timing) is likely to be key to establishing whether this is a workable approach.  The draft guidance provides no further insight on this point. Merging parties considering the “wait and see” approach (rather than taking the matter out of the CMA’s hands by choosing to notify the deal to mitigate these timing risks) will therefore need to think particularly carefully about how to handle interactions between agencies, third-party reaction, and how to mitigate the risks of a late-stage CMA intervention to the extent possible.

The UK’s flexible jurisdictional tests gets some “window dressing”

The new draft guidance also sets out a number of purported “changes” relating to the application of two of the CMA’s more controversial aspects of the CMA’s jurisdictional reach – the “material influence” test and “share of supply” threshold.  But, in practice, it seems unlikely that these changes will have a material impact on how those aspects of the regime will operate in practice.

For the material influence test, the CMA provides additional colour on how its assessment will be made – but does so essentially by summarising the approaches taken in previous cases (providing limited insight beyond what was already set out in the published decisions in those cases).

For the share of supply threshold, the CMA confirms that it will “typically” confine itself to the criteria set out in the Enterprise Act to “measure” the merging parties’ share of supply – i.e., value, cost, price, quantity, capacity and number of workers employed – rather than using some of the more exotic measures used in a small number of previous cases (such as, in Roche/Spark, the number of patents held by the merging parties).  As the CMA had already indicated that such contortions were already likely to be a thing of the past, in light of the new (non-overlap) “hybrid” threshold introduced by the Digital Markets Consumers and Competition Act at the start of 2025, this also arguably brings about no meaningful change in practice.

Ultimately, as the CMA recognises in its consultation document, the statutory parameters that frame these tests are broad and there is limited scope, absent legislative change (which the Government is understood to be considering), to fundamentally change how these tests are applied.

Where does that leave us?

This new package of measures will undoubtedly facilitate more effective and efficient engagement with the CMA, helping merging parties to “make their case” for clearance to the CMA and reach outcomes more quickly (where possible).  Along with signs of increased flexibility in the design of remedies and the consideration of pro-competitive efficiencies, these changes can help provide merging parties with confidence that CMA proceedings (when carefully navigated) should not become a quagmire, particularly for M&A underpinned by a pro-growth and pro-customer rationale.

Don’t hesitate to speak to your usual Freshfields contact to discuss what these new proposed changes mean for you.

To read more about our thoughts on the key global merger control trends to be aware of this year, read our Navigating antitrust in 2025: 10 key themes publication.