Brexit: Balancing UK and EU merger control - International l Concurrences N 4-2019
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Concurrences REVUE DES DROITS DE LA CONCURRENCE | COMPETITION LAW REVIEW Brexit: Balancing UK and EU merger control International l Concurrences N° 4-2019 www.concurrences.com Joel Bamford Joel.Bamford@cma.gov.uk Senior Director CMA, London Aiste Slezeviciute Aiste.Slezeviciute@cma.gov.uk Assistant Director CMA, Edinburgh
International
Joel Bamford*
Brexit: Balancing
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
Joel.Bamford@cma.gov.uk
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
Senior Director
UK and EU
CMA, London
Aiste Slezeviciute*
merger control
Aiste.Slezeviciute@cma.gov.uk
Assistant Director
CMA, Edinburgh
ABSTRACT
The merger control regime in the United
Kingdom (UK) and at the European level
is increasingly under the spotlight. In the UK,
a key factor is the UK’s exit from the European
Union (Brexit), where, as a consequence,
the UK is likely to lose the benefit of
the “one-stop shop” under the EU Merger
I. Defining the issues
Regulation (EUMR). This article sets out
the key challenges faced by the CMA, as well 1. At the time of writing, there are still many uncertainties around the terms and
as the steps that have been taken and that timing of Brexit. Many of these uncertainties will have a significant impact on the
are planned to ensure that UK merger control UK’s merger control landscape and the CMA’s interaction with the EU regime.
is as efficient and effective as possible to meet
the needs of consumers and businesses
under the CMA’s enforcement goals. 2. The first part of this article will address the impact Brexit will have on the
This article will primarily focus on the UK merger review process and sets out the steps the UK CMA has taken to ensure
merger control regime, but where relevant
its readiness. The second part focuses on the internal review processes and the
it will make references to the proposals
and changes intended by the EU and other changes, if any, required to address challenges posed by Brexit. Lastly, the
competition authorities. article will cover the CMA’s position on international cooperation and its global
aspirations.
Le régime du contrôle des concentrations
au Royaume-Uni et au niveau européen
est de plus en plus au centre des attentions.
1. Brexit – Impact on mergers
Au Royaume-Uni, les changements résultent
principalement de la sortie du Royaume-Uni 3. It has already been widely reported and discussed that the key impact of Brexit
de l’Union européenne (Brexit) et, on UK competition enforcement will be an increased caseload for the CMA. On
par conséquent, en la perte du bénéfice the merger front, the CMA will gain jurisdiction to review cases which relate
de la notification par une procédure unique
(principe du “guichet unique”) au titre du
to UK markets but are currently notified to the European Commission under
règlement sur les concentrations de l’UE. the “one-stop-shop” notification system in accordance with the EU Merger
Cet article décrit les principaux défis auxquels Regulation (EUMR).1 Whilst the exact case numbers are, of course, difficult
l’autorité de la concurrence et des marchés to predict, the estimates range between an additional 30 to 50 cases annually.2
britannique, la CMA, est confrontée,
ainsi que les mesures prises et prévues pour The CMA estimates half a dozen of these are likely to lead to in-depth, Phase 2,
que le contrôle des fusions au Royaume-Uni inquiries. In addition, in the case of a “no deal” Brexit, the CMA will gain the
soit aussi efficace que possible afin de power to monitor and enforce certain commitments agreed by the parties with the
répondre aux besoins des entreprises,
des consommateurs et aux objectifs
EC in the past cases, to the extent that those commitments relate to the supply or
de la CMA. Cet article se concentrera acquisition of goods or services in the UK markets.
principalement sur le régime de contrôle
des concentrations du Royaume-Uni,
mais le cas échéant, il fera référence
4. The CMA has taken a number of concrete measures to prepare for this
aux propositions et aux modifications additional workload. It secured increased budget which has allowed it to recruit
souhaitées par l’UE et d’autres autorités additional personnel, including recruitment of staff to focus on mergers work.3 So
de la concurrence. far, the CMA has been successful in its recruitment campaigns, both in London
and its expanding Edinburgh office, and this work is ongoing.
This article is an extended version of a speech
delivered by Joel Bamford, senior director
Mergers, UK Competition and Markets Authority
(CMA), at City and Financial Global “Future of
UK Competition Law Summit” on 11 June 2019.
The authors wish to thank all colleagues who
contributed to the speech and article, in particular
Andrea Gomes da Silva, executive director Markets
and Mergers, Alex Olive, director, Mergers, and 1 Council Regulation (EC) No. 139/2004, Article 21 and Recitals (8) and (10).
Sam Scott, director, International Policy, at the
CMA. Errors and omissions, and any opinions, are 2 In 2017 the CMA mergers team undertook some analysis with a view to determining how many additional cases the CMA might be
those of the authors in their personal capacity and reviewing after Brexit. This analysis assumed the existing jurisdiction and voluntary notification regime. The team concluded that the
do not represent the views of the CMA. CMA could expect around 30–50 additional cases per year post-Brexit.
This article was written before 31 October 2019. 3 See CMA 2019/20 annual plan, https://www.gov.uk/government/publications/competition-and-markets-authority-annual-plan-
Any required revisions will be added post script in 2019-to-2020/competition-and-markets-authority-annual-plan-201920. To enable the CMA to continue preparations, HM Treasury
an online version. allocated the CMA an additional £20m in the 2019/20 financial year.
Concurrences N° 4-2019 I International I Joel Bamford, Aiste Slezeviciute I Brexit: Balancing UK and EU merger control 15. The CMA has also dedicated resources to regularly
II. CMA’s approach
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monitoring live EU cases which impact UK markets and
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has worked closely with the European Commission to date
in relation to potential “in-flight” cases. In preparation
for a “no deal” Brexit in March 2019, the CMA engaged
to addressing these
with the merging parties and the European Commission
to learn more about the limited number of cases that will issues
likely to fall under UK jurisdiction and raise competition
issues. This work stream is again being undertaken as the
CMA prepares for a potential “no deal” Brexit at the end 1. Issue 1: UK’s voluntary
of October 2019. notification regime
6. Mindful of the need for merging parties to prepare and jurisdiction
for a potential “no deal” Brexit, the CMA published
guidance on its merger control functions in the event of 1.1 The current voluntary regime
the UK leaving the EU without a withdrawal agreement.4
8. In Europe, and indeed globally, the UK is unusual in
That guidance, prepared in advance of the initial 29
having a voluntary merger control regime. Despite having
March 2019 Brexit date, is equally valid now, should it
reviewed the possibility of introducing a mandatory
be applicable.
notification requirement as part of the 2011 reforms
which created the CMA (merging the functions of the
2. Areas to focus on for Office of Fair Trading (OFT) and the Competition
Commission (CC) into a single authority), the UK
the UK merger regime government decided to keep the voluntary regime, with
the benefits of self-assessment, albeit with tightened
7. Against this backdrop and building on the CMA’s work administrative measures introduced under the new
so far, several merger-specific policy issues are relevant in legislation (ERRA 20135). The retention of the voluntary
the immediate future: regime was supported by the CMA’s increased powers
to impose interim measures, to allow the CMA to act
– Reviewing and potentially enhancing the merger to preserve all possible remedy options and to keep the
review mechanisms in place so that the CMA can merging businesses separate and a continuing competitive
assert jurisdiction in a timely manner in relation to constraint during the investigation. Ultimately, such a
mergers that require assessment as to whether they raise voluntary system (with appropriate safeguards) reduces
competition concerns in the UK. This point pertains regulatory burdens for transactions that clearly, on their
to the UK voluntary notification regime, which will be face, do not raise competition concerns.
discussed in detail below.
– Ensuring that the CMA’s review processes are fit 9. In its current merger enforcement toolbox, the CMA
for purpose—for UK-specific cases, but also for does not have an automatic “suspensory” mechanism.
multinational deals reviewed by multiple competition In general, under the voluntary regime, most mergers
authorities globally. may be completed, but the CMA retains the power to
prevent integration, intervene post-completion and even
– Positioning the CMA at the forefront of global undo existing integration by imposing so-called interim
thought leadership on substantive issues, in particular, measures. The CMA’s tools in relation to controlling the
in terms of the novel questions brought about by the degree to which merging parties may complete, integrate
digital economy where a global approach may be or otherwise act in a way that could interfere with the
required. This builds on the CMA’s international policy CMA’s review were strengthened in 2013.6 The CMA
work, whereby it already actively engages with other gained the ability to impose Initial Enforcement Orders
competition authorities and international organisations, (IEOs) at Phase 1,7 Interim Orders (IOs) or undertakings
on various policy matters, including mergers. at Phase 2,8 as well as unwinding orders.9 To incentivise
compliance and to strengthen these powers, the CMA
can impose financial penalties for failure to comply with
5 Enterprise and Regulatory Reform Act 2013.
6 Ibid., section 30 and Schedule 7.
7 Imposed under Enterprise Act 2002, section 72, an IEO prevents merging parties from taking
“pre-emptive action” (i.e., action that might prejudice the outcome of the reference and/
or impede the CMA from taking appropriate remedial action that might be justified by the
CMA’s decision on the reference). The CMA subsequently (on application by the parties) may
grant a specific derogation, giving consent to the parties to undertake certain actions that
would be prohibited by the IEO.
4 CMA106, Guidance on the functions of the CMA after a ‘no deal’ exit from the EU, March 8 Enterprise Act 2002, sections 80 and 81.
2019, https://www.gov.uk/government/publications/guidance-on-the-functions-of-the-cma-
after-a-no-deal-exit-from-the-eu. 9 Ibid., sections 72(3B), 80(2A) or 81(2A).
2 Concurrences N° 4-2019 I International I Joel Bamford, Aiste Slezeviciute I Brexit: Balancing UK and EU merger controlinterim measures, capped at 5% of the total worldwide worked well to date. Whilst it is appropriate to review these
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
turnover of the enterprises owned or controlled by the in preparations to Brexit, the CMA is keen to preserve
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person on whom it is imposed.10 The CMA has taken the benefits of this system that apply to many businesses
a robust position to enforcement of compliance with operating in the UK. As such, the reform proposals set
interim measures. out below focus on a “twin track” or “hybrid” merger
notification regime.
10. Recent examples include penalties for breach of an
1.2 Is a change required post-Brexit?
IEO in a number of cases. In particular two separate fines
for breaches of an IEO were imposed in the Electro Rent/
Microlease case.11 Electro Rent was fined £100,000 in 13. It is important to consider that post-Brexit the CMA
June 2018 for breaching an IEO by serving a break notice will gain jurisdiction over large multinational mergers,
on the lease of its UK premises without first seeking the some of which may raise competition concerns in the
CMA’s consent. The same firm was fined an additional UK. It is therefore timely and appropriate to consider
£200,000 by the CMA for having appointed Electro afresh the notification mechanisms and procedures
Rent’s CFO as director of Microlease UK without CMA’s applicable to such deals. In particular, such analysis is
consent and in breach of an Interim Order. In the Electro important because the CMA will have to review some
Rent case, the parties appealed the first infringement of the same transactions alongside other jurisdictions—
decision and on 11 February 2019 the Competition such as the EU, the United States of America (USA) and
Appeal Tribunal (CAT) upheld the CMA’s decision.12 the People’s Republic of China (PRC). It is paramount
The largest penalty to date of £250,000 has been issued in for the CMA to have appropriate mechanisms allowing it
the PayPal/iZettle merger inquiry, for failure to comply to have a “seat at the table” with other agencies from the
with an IEO during the Phase 2 review.13 Specifically, the early information gathering stages of investigations right
companies conducted cross-selling marketing campaigns through to considering possible remedies.
in breach of the IEO and by doing so they risked
impairing their ability to compete independently. These 14. The CMA is proposing the introduction of a
fines demonstrate that merging parties and their advisers mandatory notification system for certain larger cross-
should carefully consider what activities are carried out border transactions. The proposals are not for a complete
while interim measures are in place. overhaul of the current UK merger control regime. In a
nutshell, the proposal is for a mixed notification system
11. Under the voluntary regime the CMA also has a whereby it would be mandatory for some (large) mergers
duty to track merger activity to determine whether any to be notified for CMA review, whilst retaining a voluntary
unnotified mergers may give rise to a substantial lessening (and non-suspensory) system for notification for all other
of competition.14 The CMA therefore has mergers mergers. For the mandatory part of the regime to be
intelligence staff who scan sources of information on effective, the CMA is proposing that it is associated with a
mergers and present potential cases for investigation to suspensory element which would introduce a “standstill”
the Mergers Intelligence Committee, which is chaired provision with appropriate enforcement mechanisms
by a director of Mergers. The CMA will take a decision such as fines akin to those available under the EUMR
to investigate if it believes that there is a reasonable and used in most jurisdictions that operate mandatory
chance that the test for a reference to an in-depth Phase 2 notification regimes.
investigation will be met.15 The threshold for the CMA
to open an investigation is therefore lower than the 15. The proposed mandatory notification system would
threshold for reference. allow the CMA merger review process to be better
aligned on large international mergers with reviews by
12. To conclude on this part, the voluntary regime other competition authorities. If the CMA is notified
supported by the CMA mergers intelligence work and at the same time, then it should allow the CMA to
empowered by the CMA’s interim measures toolkit has engage with other authorities early in the process and
coordinate timings on areas such as evidence gathering
or potential remedy discussions, to the extent possible.
The suspensory element of the proposed regime would
10 Enterprise and Regulatory Reform Act 2013, section 31.
ensure that during any potential remedies discussion the
11 Electro Rent Corporation/Test Equipment Asset Management and Microlease merger merging parties are incentivised to engage with the CMA
inquiry, see case page, https://www.gov.uk/cma-cases/electro-rent-corporation-test-
equipment-asset-management-and-microlease-merger-inquiry. alongside other authorities rather than the CMA being
“left until the end.” On remedy engagement, the CMA
12 1285/10/12/18 Electro Rent Corporation v. Competition and Markets Authority, https://www.
catribunal.org.uk/cases/1285101218-electro-rent-corporation. has already undertaken early discussions on this in some
Phase 1 cases where the merging parties have requested
13 24 September 2019, the CMA has published a notice (dated 18 September 2019) of a penalty
imposed on PayPal Holdings, Inc., PayPal (Europe) Sarl et Cie SCA and PayPal SE (jointly and the CMA to do so but have historically engaged only later
severally PayPal) under section 94A of the Enterprise Act 2002. The CMA imposed the penalty in Phase 2 investigations. This may be something that is
for failures to comply, without reasonable excuse, with the requirements imposed on PayPal by the
initial enforcement order issued by the CMA under section 72 of the Enterprise Act 2002. See case
revisited in the future. There may still be challenges if
page, https://www.gov.uk/cma-cases/paypal-holdings-inc-izettle-ab-merger-inquiry. investigations take different routes (and there are many
14 See Guidance on the CMA’s mergers intelligence function, CMA56, Updated 5 September
ways in which the UK process is different to that of EU
2017, https://www.gov.uk/government/publications/cmas-mergers-intelligence-function- and other jurisdictions) but having a mandatory and
cma56. suspensory regime for certain mergers will reduce the risk
15 Ibid., para. 2. to both, the merging parties and the CMA.
Concurrences N° 4-2019 I International I Joel Bamford, Aiste Slezeviciute I Brexit: Balancing UK and EU merger control 316. The key challenge in designing a mixed notification 1.4 What next?
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
system will be to identify effective thresholds to capture
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L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
transactions that could raise competition concerns 20. In terms of the next steps, if the Department
while minimising unnecessary burdens on business and for Business, Energy and Industrial Strategy (BEIS)
the CMA from the mandatory review of “no issue” considers the proposals worth pursuing, they will be
transactions. The aim should be to capture larger mergers subject to a public consultation. As always, there will be
that are typically reviewed in multiple jurisdictions. To do an opportunity for interested parties to comment.
so, the CMA is proposing a mandatory regime for some
mergers based on the merging parties’ UK and worldwide
turnover. 2. Issue 2: Merger review
17. The CMA is, of course, well attuned to the potential
processes – Reflections
burden of “non-issue filings” (where notified mergers on recent cases
clearly do not raise competition concerns, but are caught
by the notification thresholds), on the merging businesses 21. The CMA recognises that its analysis and processes
as well as on the CMA’s resources. Therefore, the CMA is need to be proportionate, reasonable and where possible,
considering the introduction of a short-form notification tailored to each case within the statutory parameters and
or simplified review process (similar to the European respecting the duty to act proportionately. The existence
Commission’s current practice) that would apply for of common standards, timescales and review practices
mergers falling within the mandatory regime, to minimise is, of course, crucial for many reasons: legal certainty,
the impact on the business and to ease administrative procedural fairness, and efficiency of investigation, to
burden on the CMA in relation to cases that self-evidently name a few and in no particular order. However, the
do not raise competition concerns. CMA deals with a wide range of cases, whether that be
in terms of the size of the transaction, the complexity of
the theories of harm, or prior investigations of similar
1.3 Is the voluntary regime catching markets. Going forward, the review process will only get
the “right” transactions? even more complicated with parallel EU cases.
18. There is also some debate globally and within the 22. Any changes to processes and procedures need to
CMA around “catching” the right transactions in terms be implemented in a procedurally fair and transparent
of jurisdiction. The CMA believes that the current manner. The CMA recognises that it is important for
jurisdictional test based on two alternative thresholds, parties, and their advisers, that the UK merger control
a turnover-based or share of supply test (not market regime remains sufficiently predictable. Moreover, the
shares),16 is flexible enough and does not require a review CMA has a duty to consumers and businesses to work in
as far as the cases falling within the voluntary notification a timely fashion; but it is also obligated to ensure that due
regime (as proposed under the hybrid regime) are process and rights of the defence are not compromised.
concerned. The share of supply test, in particular, allows The CMA strives to balance these obligations and takes
the CMA to exert jurisdiction over transactions in digital them very seriously.
markets, where a target has no turnover, but clearly has
a market presence, if one looks at other metrics such as 23. The CMA already has extensive guidance on its
downloads or share of attention. process and several procedural steps which enable it to
streamline reviews—for example, Mergers Intelligence
19. The CMA has so far used the share of supply in a Committee (MIC) briefing notes,20 Phase 1 Undertakings
number of such transactions without needing to introduce in Lieu (UiLs)21 for early resolution of cases and the
a notification threshold based on the transaction value fast-track referral to Phase 2 process22—all of which
(as discussed at the EU level,17 and recently introduced in are helpful at different stages of the case and have been
Austria18 and Germany19). However, if there are mergers successfully used by multiple merging parties.
which raise competition concerns which the CMA is not
able to exert jurisdiction over, then that would raise a 24. However, the CMA is preparing to take jurisdiction of
potential need to reassess the current jurisdictional test larger and more complex cases (in terms of substance, but
under the voluntary regime. also in terms of international cooperation requirements),
20 See Guidance on the CMA’s mergers intelligence function, CMA56, Updated 5 September
2017.
21 The CMA may alternatively accept undertakings in lieu of reference offered by the parties
16 Enterprise Act 2002, section 23. under section 73(2) of the Act. Further information is available in Mergers: Guidance on
17 The European Commission White Paper, Towards More Effective EU Merger Control, the CMA’s approach to jurisdiction and procedure (CMA2, January 2014) and Mergers:
COM(2014) 449. Exceptions to the duty to refer (CMA64, 13 December 2018).
18 Austrian Cartel Act, section 9(4). 22 The CMA considers that, exceptionally, it may be possible to accelerate significantly the
treatment of cases for referral for a Phase 2 investigation where this corresponds with the
19 9th amendment to the German Act Against Restraints on Competition, in force since 9 June wishes of the merger parties and where there is sufficient evidence available to meet the
2017; and Consultation on Evaluation of procedural and jurisdictional aspects of the EU CMA’s statutory threshold for reference. See Mergers: Guidance on the CMA’s approach to
merger control. jurisdiction and procedure (CMA2, January 2014), section 6.61 onwards.
4 Concurrences N° 4-2019 I International I Joel Bamford, Aiste Slezeviciute I Brexit: Balancing UK and EU merger controlas well as facing an overall increase in its workload. More 27. Focusing on this last point, the CMA is looking
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
generally, the CMA as an organisation is always striving internally into three areas for improving its processes:
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L. 335-2 CPI). L’utilisation personnelle est strictement autorisée dans les limites de l’article L. 122 5 CPI et des mesures techniques de protection pouvant accompagner ce document. This document is protected by copyright laws and international copyright treaties. Non-authorised use of this document
to improve and implement best practices, building on the (i) incremental changes that can be implemented in the
recent experiences of reviewing complex cases. As such, short term; (ii) changes that would require a revision
reviewing our internal processes now is timely and to the CMA guidance; and the most challenging (iii)
appropriate. changes that require revisions to the current legislative
framework. However, the current legislative framework
2.1 Sainsbury’s/Asda merger inquiry
is not prescriptive as to the procedural steps required in
Phase 2 inquiries, and it is CMA guidance which sets out
25. The recent Sainsbury’s/Asda case23 (including the the current process. For example, the legislation does not
CAT judgment24) offers a good opportunity for the CMA specify procedures around working papers, but includes
to pause and reflect on its recent experiences. It has been a statutory requirement for transparency. Therefore, the
suggested as part of evidence before the CAT that this CMA has a high degree of flexibility to alter the current
merger “is about five times the size of the average UK processes in Phase 2 inquiries.
Phase 2 case.”25 On 25 April 2019, the CMA issued its
final report, prohibiting the merger which would have 28. The ability for the CMA to set and maintain the
combined two of the country’s largest groceries and fuel procedural timetable for merger review is important—as
retailers, with revenues of £50 billion and 2.4 billion recognised by the CAT in Sainsbury’s/Asda. Ultimately,
consumer transactions annually. Following an in-depth, the CMA is under the legislative duty to act with
Phase 2 investigation, the independent CMA panel found expediency, which is supported by the statutory deadlines.
that the merger would be expected to lead to a substantial The CMA must be conscious of the end-to-end timetable
lessening of competition in a large number of markets in an investigation (including the pre-notification stage)
in the retail supply of both groceries and fuel in the and merging parties cannot dictate the timetable or, as
UK. The case involved complex substantive issues, and the CAT put it in the Sainsbury’s/Asda judgment, “have
the investigation has been detailed and wide-ranging. as long as they wish for.”
However, procedural elements were also significantly
tested, culminating with the CAT judgment of 18 January 29. Recognising this careful balance, it is now also vital
2019. The CAT granted an application made by the that the CMA is able to align timings with the review
merging parties for review of the CMA’s decisions on the timelines of other agencies. Indeed, other agencies are
timetable for the conduct of the Phase 2 investigation. under pressure to reduce the time they take to resolve
merger cases. The Department of Justice (DoJ) in
26. Focusing on the CMA’s merger review processes the US, for example, announced last year that it will
alone, the following observations can be made: aim to resolve most second request HSR cases within
six months.26 And in the context of mergers in digital
–
Ultimately the case took twelve months from markets, twelve months can be a critical time period as
announcement to decision under the fast-track the competitive landscape may change materially in that
process. This case does not illustrate that the process time.
was slow or fast, but rather demonstrates how
the CMA must consider multiple responsibilities, 30. As a first step, the CMA is looking to prioritise
including: ensuring merging parties have their full improvements (some of which are building on what has
procedural rights; undertaking a robust and evidence- already been started) that are possible to implement
based analysis; and recognising that uncertainty without changes to the legislation or guidance. Two
impacts many stakeholders—customers, employees, examples of incremental changes the CMA is currently
suppliers and competitors. making are:
–
Whilst the CMA had to get up to speed on the –
First, smoothing the transition between Phase 1
specifics of this case, the CMA already had a history and Phase 2 teams and ensuring efficient handover.
of looking into this market. This will not be the case Whilst the CMA recognises that the two phases
for all complex merger inquiries. need to remain independent from a decision-making
– Given the size and complexity of this case, it provides perspective the CMA has trialled more “fluid”
the CMA with an opportunity to take stock and team allocation in several recent cases successfully,
consider whether there are changes in its processes bringing the benefits of know-how and expertise of
which may be required, in particular as the CMA Phase 1 into Phase 2 as early as possible. In particular,
prepares to take more cases of similar complexity. where possible and appropriate, the CMA will look
at securing a continuation of some members of the
Phase 1 case team. Nevertheless, it will always be the
case that additional staff would need to be drafted in
to cope with additional workload of Phase 2.
23 J Sainsbury PLC/Asda Group Ltd merger inquiry, see case page: https://www.gov.uk/cma-
cases/j-sainsbury-plc-asda-group-ltd-merger-inquiry.
24 Case No: 1300/4/12/18, J Sainsbury plc and Asda Group Limited v. Competition
and Markets Authority, 18 January 2019. 26 Assistant Attorney General Makan Delrahim Delivers Remarks at the 2018 Global Antitrust
Enforcement Symposium, https://www.justice.gov/opa/speech/assistant-attorney-general-
25 Ibid., Judgment, para. 27. makan-delrahim-delivers-remarks-2018-global-antitrust.
Concurrences N° 4-2019 I International I Joel Bamford, Aiste Slezeviciute I Brexit: Balancing UK and EU merger control 5A smooth transition has clear advantages for the mergers with other agencies and hosted a series of global
constitutes a violation of the publisher's rights and may be punished by up to 3 years imprisonment and up to a € 300 000 fine (Art. L. 335-2 Code de la Propriété Intellectuelle). Personal use of this document is authorised within the limits of Art. L 122-5 Code de la Propriété Intellectuelle and DRM protection.
merging parties as well as for the CMA, and the CMA discussions on the approach to retail mergers. The CMA
Ce document est protégé au titre du droit d'auteur par les conventions internationales en vigueur et le Code de la propriété intellectuelle du 1er juillet 1992. Toute utilisation non autorisée constitue une contrefaçon, délit pénalement sanctionné jusqu'à 3 ans d'emprisonnement et 300 000 € d'amende (art.
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has already received positive feedback from the merging is also on the Steering Group of the ICN and has been
parties and advisers where this has worked well. It is heavily engaged in work on procedural fairness that
important to stress that the CMA is not looking to culminated the ICN Framework on Competition Agency
change any steps that are specifically designed to protect Procedures that was launched in Colombia in May 2019.
the independence of the Phase 2 process. In particular The CMA intends to continue to contribute to the OECD
it recognises the need for “a fresh pair of eyes” for the Competition Committee roundtables and work on issues
review. of topical and mutual interest.
–
Second, the CMA is considering some process
34. The CMA recognises the benefits of effective
improvements. It is the intention of the CMA to
cooperation across jurisdictions in parallel reviews (where
review the current Phase 2 process such that there is
relevant and appropriate). The CMA already cooperates
an increased focus on the key substantive issues upon
informally with many non-EU countries; however post-
which the case should turn without unnecessary
Brexit, the frequency and the number of cases in which the
administrative burdens placed on the CMA or the
CMA will need to cooperate with such authorities is likely
merging parties. This means avoiding processes that
to increase. In addition, the nature of cooperation with the
merely encourage a rehearsal of previous arguments
European Commission is likely to change, as the CMA
and finding the most effective way of generating
is unlikely to remain part of the European Competition
evidence and structuring the debate on the core
Network (ECN). The European Commission will continue
points of substance. In practice, this means that the
to be a key strategic partner and the CMA intends to
CMA is, in the first instance, reviewing the format,
build on the current extremely good working relationships
structure and length of its interactions with the
at every level. Moreover, the CMA will continue to closely
parties, whether in writing or in hearings. Further the
monitor any changes to the EU merger control procedures
CMA is considering the nature of the material which
and policies, as it has done to date. The CMA has a strong
is shared with merging parties and published during
record of collaborating with various national European
its inquiries and how this enables evidence to be
competition agencies, for example together with the
gathered effectively while preserving merging parties’
representatives from Belgium, the Netherlands and
rights to a transparent process.
Spain, the CMA wrote an open letter to the European
Commission setting out reasoned concerns regarding the
31. To conclude, the CMA is committed to continuously
proposed merger of the mobility business of Siemens AG
improving the pace and efficiency of the merger review
with Alstom AG.28 More recently, the CMA contributed
process, in particular, for Phase 2 investigations. The
to the common understanding of the issues raised by the
above outlined processes have evolved over time and it
digital economy for competition analysis, as issued by the
is appropriate to take a step back and review in a holistic
competition authorities of the G7.29
manner. The CMA is required to continuously adapt its
processes to ensure that it delivers the best outcomes for
consumers, markets and the merging parties, whether
that be now or post-Brexit. III. Conclusion
35. The CMA, as well as the competition community
3. Issue 3: Delivering on global in the UK, are very much alive to the challenges and
goals opportunities presented by Brexit for UK merger control.
The recent Sainsbury’s/Asda case shows that the CMA
32. As for the CMA’s global ambitions, the sentiment is able to carry out a large, thorough investigation with
expressed by the CMA’s CEO Andrea Coscelli on a robust analysis and strong process. Thus, the UK is
number of occasions stands true—“[n]ow more than already in a great position to tackle large and complex
ever, my intention is for the CMA to work to maintain and merger investigations. The reform proposals outlined
deepen what I hope are already close relationships with in this article, if adopted, will allow the CMA to build
other competition and consumer authorities.”27 further on these capabilities. In addition, where possible,
the CMA will continue to review merger investigation
33. Across the CMA, including in mergers, the goal procedures and processes and implement improvements
is to continue to work closely with the international that are required to ensure that the UK merger regime
organisations and build on the mutually beneficial delivers the right outcomes for consumers, markets
relationships. The CMA is already very active in this and the parties involved in UK, as well as global
area on the mergers side, where we are currently co- transactions. n
chairs of the International Competition Network (ICN)
Mergers Working Group. As part of this engagement, the
CMA has taken the lead on research papers on vertical 28 CMA, Open letter to the European Commission, 20 December 2018, https://www.gov.uk/
government/publications/letter-from-national-competition-authorities-to-the-european-
commission.
29 Common Understanding of G7 Competition Authorities on Competition and the Digital
27 Andrea Coscelli, Chief Executive of the CMA delivered the keynote speech to the annual Economy Paris, 5 June, 2019, http://www.autoritedelaconcurrence.fr/doc/g7_common_
Fordham Competition Law Institute conference in the USA, 7 September 2018. understanding.pdf.
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