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The Law Society Tuesday 10 March 2020 Competition Section seminar: UK mergers update Chair: Matt Evans, chair, Competition Section Advisory Committee, and partner, Jones Day Speaker: • Colin Raftery, senior director of Mergers, Competition and Markets Authority
The Law Society About us - The Competition Section The Competition Section is a subscription-based Law Society membership group. It promotes knowledge and awareness of competition law developments and addresses current issues and challenges facing competition law practitioners For more information about the Competition Section or to join - www.lawsociety.org.uk/competition
The Law Society Your SRA Continuing competency codes: The Competition Section have compiled a list of competency codes in a new training tracker, to help you record your professional development. Go to our web site > www.lawsociety.org.uk/competition and then Home > About us > Keep track of your professional learning to see the codes to add to your training record. Here is a sample…
The Law Society
The Competition Section covered these SRA codes between 1 November 2018 and 29 February 2020
When Name of product Product type SRA codes
Nov 2018 Competition Section webinar: The interface between public Inclusive A2, A5, B1
procurement and competition law
Nov 2018 Competition Section seminar: UK national security law and merger Inclusive A2, A4, A5,
control B1, C2
Nov 2018 Competition Section annual dinner and awards: Podcast of keynote Inclusive TBC
speech on Brexit and the future of competition law (Audio)
Dec 2018 Competition Section seminar: Update on recent pharmaceutical Inclusive A2, A5, B1
competition cases
Jan 2019 Competition Section webinar: Competition litigation reviewing 2018’s Inclusive A2, A4
key developments
Feb 2019 Competition Section seminar: Data issues and merger control Inclusive A2, A4, A5,
B6, B7
Mar 2019 Competition Section seminar: UK mergers update Inclusive A2
Apr 2019 Competition Section seminar: Review of the Digital Competition Inclusive A1, A2, A4,
Experts Panel report B1, B3
May 2019 *Competition Section annual conference: Discounted A2
May 2019 Competition Section webinar: Avoiding the antitrust perils of illegal Inclusive A2, A4
information exchange
4The Law Society 2019 Competition Section webinars – Listen again The below are webinars are inclusive to Competition Section members and available to view now: Jan 2019 – Webinar: Competition Litigation - reviewing 2018's key developments • Speakers: Anna Morfey and Scott Campbell, Hausfeld May 2019 – Webinar: Avoiding the antitrust perils of illegal information exchange • Speaker: Graeme Young, partner, CMS (UK) July 2019 – Webinar: Dawn raids - best practices and recent developments • Speakers: Omar Shah, partner, Morgan, Lewis & Bockius LLP and Jasminder Nakhwal, parter, Peters & Peters Solicitors LLP Sept 2019 – Webinar and Podcast: Vertical agreements: The digital dimension and risks • Speaker: Richard Eccles, partner, Bird & Bird, LLP We also have a range of past/OnDemand seminar presentations where you can access the slides or audio available from the Competition Section website under ‘Past seminar presentations’
The Law Society Upcoming Competition Section events 2020 – Book/Save the date 14 April 2020: Competition Section seminar Reverse patent settlements and the GSK case • Speakers: Brian Sher, partner and co-head of Competition, CMS 14 May 2020: Competition Section annual conference • Keynote speaker: Sarah Cardell, general counsel, Competition & Markets Authority 9 June 2020: Competition Section seminar: Presidents update: Competition law today and tomorrow • Speaker: Professor Richard Whish 14 July 2020: Competition Section seminar: EU merger control and life after Brexit - the view from Brussels • Speaker: Balasz Horvasz, EU Commission
The Law Society
Join us at the Competition annual conference 2020
Leading practitioners, including Paula Riedel, partner, Kirkland & Ellise LLP and
Joel Bamford, senior director, Competition and Markets Authority, will provide you with
the most up to date coverage of all the major issues and developments in the world of
competition law.
Our programme will focus on key issues that competition law practitioners will be facing
in the upcoming months, including competition litigation, merger control and
anti-trust enforcement.
Book your place: www.lawsociety.org.uk/Competition-annual-2020 Book your early
bird ticket by
20 March and
save up to £50UK Merger Control:
2019 in review and a forward look at 2020
Colin Raftery
Senior Director, Mergers, CMA
10 March 2020
8Overview
The CMA’s caseload in 2019/20
1
Phase 1 highlights in 2019/20
2
Phase 2 highlights in 2019/20
4
Procedural infringements
5
Developments in policy and practice
6
9The CMA’s caseload in 2019/20
10Overview of Phase 1 caseload
Phase 1 Decisions 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
Referred 17 13 10 8 7 8 9 14 8 6 11 5 9 11 12
UIL accepted 6 7 5 6 5 4 5 10 0 3 9 9 12 2 7
Unconditional
118 86 78 53 43 43 62 49 42 56 36 39 37 41 33
clearance
De minimis clearance 0 0 3 4 7 4 3 4 3 7 4 3 4 0 1
Found not to qualify 69 22 15 9 10 14 21 23 12 10 2 1 0 2 2
Cancelled/abandoned - - - - - - - 0 0 0 0 1 1 1 2
Total decisions 210 128 111 80 72 73 100 100 65 82 62 57 62 56 57
Case review meetings at Phase 1
Cases to CRM 36 30 22 29 22 21 30 32 19 24 24 28 30 25 25
Notes:
• Phase 1 decision date (clearance, referral, UIL) recorded in year that final decision made, so year may be different to the year of the CRM and intermediate decisions
• Phase 2 outcome date recorded in year that final decision made, so year may be different to date of Phase 1 reference decision
• Data for FY 2019/2020 as of 29 February 2020
11Phase 1 caseload in 2019/20
Phase 1 cases
Ecolab/Holchem Bauer/UKRD Prosafe/Floatel
Illumina/Pacific Biosciences Bauer/Celador JD/Footasylum
Referred
LN-Gaiety/MCD Scala/Wireless Bottomline/Experian
Bauer/Lincs Sabre/Farelogix Amazon/Deliveroo
Rentokil/Mitie *Trenitalia/West Coast Rail Franchise Stonegate/Ei
UIL accepted Liqui-Box/DS Smith Connect Bidco/Inmarsat (PIIN)
*Abellio/East Midlands Franchise Advent/Cobham (EIN)
RWE/E.ON AstenJohnson Holdings/Heimbach Cartamundi/Fournier (de minimis)
OSRAM/Ring Fiserv/First Data USCO SpA/Knockturn
Global Radio/Semper Veritas Charter Court/One Savings OVO/SSE
Swissport/HCH Calvin/BV NFA/Outcomes First
AL-KO Kober/Bankside Patterson Liverpool/Aintree Roche/Spark
ARMS/EMA Computer *AEG/ONEX Platinum/Wesco
Unconditional
ForFarmers/Bowerings Inspired/Novomatic Hasbro/Entertainment One
clearance
Broadview/Formica CGI/SCISYS WFS/Uvair
Core Assets/Partnership in Children's MUFG/DVB Google/Looker
Services Kohlberg/Bemis
Enterprise Rent-a-car/SHB Kohlberg/Nelipak
Rheinmetall/BAE Unite Group/Liberty Living
Tadano/Terex Salesforce/Tableau
Visa/Earthport Non-Standard Finance plc / Provident
Found not to qualify
Financial plc
Abandoned/Cancelled Send for Help/SoloProtect Iconex/Hansol Denmark and R+S Group
* Article 4(4) reference from EU Commission
12Overview of Phase 2 caseload
Phase 2 Outcomes 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20
Cleared 7 4 5 1 6 1 7 4 6 2 8 1 4 3 2
Prohibited 1 0 0 2 0 0 1 1 2 0 0 1 0 1 2
Remedies (Behavioural) 0 0 2 1 0 0 0 0 1 0 1 1 0 0 0
Remedies (Divestiture) 2 5 5 0 2 0 0 3 3 1 0 4 2 4 1
Cancelled/Abandoned 6 2 4 2 1 3 2 2 0 1 3 1 0 3 4
Total Outcomes 16 11 16 6 9 4 10 10 12 7 12 8 6 11 9
Notes:
• Phase 2 outcome date recorded in year that final decision made, so year may be different to date of Phase 1 reference decision
• Data for FY 2019/2020 as of 29 February 2020
13Phase 2 caseload in 2019/20
Phase 2 cases
Cleared PayPal/iZettle, LN- Gaiety/MCD
Prohibited Sainsbury’s/Asda, Tobii/Smartbox
Remedies -
(Behavioural)
Remedies Ecolab/Holchem
(Divestiture)
Cancelled / Thermo Fisher/Roper, TopCashback/Quidco, Illumina/Pacific Biosciences, Prosafe/Floatel
Abandoned
14Mergers Intelligence
2016/2017 2017/2018 2018/2019 2019/2020
Transactions reviewed >650 >650 >600 >700
Phase 1 investigations launched / Cases
13 13 14 14
called in for an investigation
Which went to CRM 7 7 5 6
Which resulted in an SLC 3 4 3 4
Which resulted in a de minimis
1 1 0 0
exception
Which were found not to qualify 0 0 2 0
Which resulted in a Phase 2 referral 2 2 3 3
Notes:
• For up until and including 2018/2019, data for case initiation were based on the date that the Phase 1 investigation was launched. From 2019/2020 onwards, the data are based on when a
case was called in for investigation and therefore include cases that remained in pre-notification as of 29 February 2020
• For up until and including 2018/2019, data for the Phase 1 outcome is allocated to the year in which outcome was announced (and may differ from year in which investigation commenced).
For 2019/2020, data for the Phase 1 outcome is a sub-set of the cases called in for investigation (i.e., the cases were both called in and had a Phase 1 outcome in 2019/2020)
• Data for FY 2019/2020 as of 29 February 2020
15Interim Enforcement Orders
2015/16 2016/17 2017/18 2018/19 2019/20
IEOs imposed in completed cases 20 25 18 24 16
IEOs imposed in anticipated cases 1 5 2 5 3
Number of derogations granted 47 103 51 73 70
● More use of IEOs pre-closing, where necessary to guard against pre-emptive action; restrictions on
completion remain rare
● Two penalty notices imposed for breaches of interim measures in 2019/20
● First unwinding order issued in pre-notification in Bottomline/Experian on 2 August 2019
● New guidance on interim measures in merger investigations published in June 2019
16Process and Timing
2015/16 2016/17 2017/18 2018/19 2019/20
Average length of pre-notification 34 days 33 days 28 days 33 days 37 days
Average length of Phase 1 investigation 34 days 35 days 34 days 36 days 37 days
Cases cleared inDuration of significant merger investigations
EU US
2016/17 2017/18 2018/19 2019/20
(2019) (2019)
Average duration of “significant” merger investigation
7.6 10.5 9.6 9.1 15.6 11.9
(announcement to either final report or UIL acceptance combined)
Average total duration of cases that proceed to Phase 2
11.9 12.5 11.7 11.5 - -
(announcement to final report)
Average duration of Phase 1 remedies cases (announcement to
5.1 5.6 6.3 4.9 - -
final UIL acceptance)
Average duration of Phase 2 investigation (reference to final
5.3 6.6 5.3 5.5 - -
report)
Notes:
• Data for 2019/20 as of 29 February 2020
• Data for US and EU from Dechert LLP, DAMITT 2019 Year in Review. A “significant” US investigation “[includes] Hart-Scott-Rodino (HSR) Act reportable transactions for which the result of the
investigation by the Federal Trade Commission (FTC) or the Antitrust Division of the Department of Justice (DOJ) is a consent order, a complaint challenging the transaction, an official closing
statement by the reviewing antitrust agency, or the abandonment of the transaction with the antitrust agency issuing a press release.” DAMITT defines “significant” EU merger investigations to
include transactions subject to the EU Merger Regulation and resulting in either a Phase I remedy or the initiation of a Phase II investigation
11Phase 1 highlights in 2019/20
19Iconex/Hansol (ME/6798/19)
Pre-Brexit investigation in close cooperation with European Commission
● Parties both active in manufacture and supply of lightweight thermal paper rolls and labels (e.g., till and
ATM receipt rolls and labels)
● Merger investigated in parallel by CMA and Commission (following Article 22 request made by Germany
and joined by France)
● Extensive co-operation with Commission throughout investigation, including joint questionnaires to
competitors and customers
● Commission cleared at Phase 1 (on 13 May 2019), but noted that competitive landscape in the UK
appeared to be different to that in continental Europe
● CMA’s Phase 1 investigation found (on 10 June 2019) competition concerns in relation to supply of
receipt rolls within the UK, because of more limited constraint from suppliers outside the UK (because of
increased transportation costs, customer preferences for UK suppliers, and currency risks)
● Merger subsequently abandoned on 18 June 2019
20Rentokil/MPCL (ME/6784/18)
Substance rather than form of agreements determinative for relevant merger situation
● Parties both active in supply of pest control services in the UK to commercial customers
● Two (separate and not legally-interdependent) agreements entered into:
- 29 September 2018: Parties enter into “Preferred Supplier Agreement” (PSA), effectively stepping
into shoes of MPCL in “IFM” contracts
- 30 September 2018: Parties enter into sale and purchase agreement (SPA) for MPCL business for
“stand-alone” contracts
● CMA assessment based on substance of arrangements rather than strict legal form, including that:
- Staff and assets associated with MPCL business served both types of contract
- Discussions on PSA and SPA inter-related and proceeded in parallel
- Rentokil internal documents suggested that PSA and SPA were seen as achieving one aim (i.e., the
transfer of the MPCL Pest Control Business as a whole)
- Transaction valuation during negotiations and consideration ultimately paid assessed on “holistic”
basis, including both types of contract
21Google/Looker (ME/6839/19)
Investigation of Google’s strength in wider digital ecosystem to foreclose BI software market
● Google acquired target active in the business intelligence (BI) tool market – a dynamic and highly
competitive market
● Limited horizontal overlap in the supply of BI tools in the UK – competitive assessment considered impact of
merger on innovation and product development: ultimately, no concerns found on this basis
● Vertical theory of harm concerning wider Google ecosystem:
- Investigated not only whether BI tool providers rely on direct access to cloud data warehouse
solutions, but also importance of access to data generated by wider suite of Google products in web
analytics and online advertising space (Google-generated data), in which Google enjoys substantial
market power
- Evidence suggested Google-generated data was important for BI software providers, so could provide
Google with the ability to engage in partial foreclosure
- But Google ultimately unlikely to have an incentive to foreclose competing BI tools (given rationale for
deal and potential benefits and likely costs of such a strategy)
22Roche/Spark (ME/6831/19)
Competitive interaction between late-stage pipeline and marketed products
● Parties both supply prophylactic treatments for congenital Haemophilia A in the UK: Roche manufactures
and supplies Helimbra; Spark currently developing two Haemophilia A gene therapy (GT) products
● CMA concluded share of supply test was met:
- Spark should be considered to be active in the supply of Hem A products in the UK (given
commercial realities of sector at issue)
- Reasonable to base analysis on more advanced treatments only, as measured by UK employees
(explicitly cited in Enterprise Act as example of criterion for share of supply test)
● Competition concerns did not arise because:
- Spark would be likely to commercialise its GT products in the absence of the Merger, but other GT
treatments were at similar (or more advanced) stage of development
- Spark not considered to hold any particular clinical or commercial advantages over those being
developed by other suppliers
- Several novel non-GT products (likely to compete particularly closely with Helimbra) also under
development
23Aintree/Liverpool Hospital Trusts (ME/6815/19)
Reduced role of competition in the provision of healthcare services
• CMA required to assess mergers between NHS Foundation Trusts under Health and Social Care Act
2012
• Both Parties were active in the provision of NHS elective services, NHS specialised and community
services, NHS non-elective services and private patient services in Liverpool and north Mersey area
• CMA’s assessment reflects changes to public policy choices about role of competition within NHS:
- Several national policies promoting collaboration and diminishing role of competition
- Local factors (such as the use of block contracts) had also substantially reduced the effectiveness of
competition as a means of organising the provision of NHS services in the Liverpool area
● In light of reduced role of competition, CMA found that overlaps between the Parties (in elective and non-
elective services) did not raise competition concerns
● No material overlap in areas where competition is liable to be a significant driver (e.g., private patient
services)
24Phase 2 highlights in 2019/20
25Sainsbury’s/Asda (ME/6752/18)
Merger of the second and third largest grocery retailers in the UK
● Sainsbury’s: 1,428 grocery stores, 314 petrol stations, online groceries delivery business, Argos and
Habitat
● Asda: 641 grocery stores, 33 Asda Living stores, 321 petrol stations and online groceries business
● CMA assessed likely effects of Merger in: (1) in-store groceries; (2) online delivered groceries; (3) general
merchandise; (4) fuel; and (5) buyer power
● Extensive, evidence-led investigation:
- Three surveys, which involved interviewing close to 60,000 customers across 100 locations;
- Large volumes of submissions, internal documents (around 140,000 in total), analysis and
commercial data from the merging parties and their advisors;
- Large volumes of submissions, internal documents, analysis and commercial data from a range of
industry participants, including 74 suppliers, 31 general merchandise retailers, 63 grocery retailers,
and 10 fuel retailers
- Several meetings and hearings with merging parties; also, 13 hearings with suppliers and grocery
retailers
26Sainsbury’s/Asda (ME/6752/18)
Supermarkets: national assessment
● Demand-side primarily local but both Parties large-scale, national operators under national brands, with
sophisticated integrated operations and centralised buying teams
● Important elements of offering, such as pricing, quality and overall brand positioning, decided centrally
and applied uniformly across national estates
● “Top down” assessment (consistent with how Parties monitor and set competitive offering)
● Based on wide variety of evidence, including: shares of supply; internal documents; customer switching
patterns; views from other grocery retailers; CMA’s store exit survey; evidence on in-store offering of
Parties and rivals; and national weighted-average GUPPI
● CMA found that Parties were two of a small number of significant national players in in-store groceries
with considerable overlap across their national stores (across c. 80% of their estates)
● Post-Merger combined share of 29%, so would be largest grocery retailer (overtaking Tesco, with c. 27%)
and nearly three times the size of the next largest grocery retailer (Morrisons, at c. 10%)
● Important competitive interaction between “Big 4” and constraint from other retailers generally less
important (evidenced by Parties’ internal documents, Kantar switching data, third party submissions,
material differences in in-store offerings, national weighted average GUPPI calculations)
27Sainsbury’s/Asda (ME/6752/18)
Supermarkets: local assessment
● Separate assessment of incentive to degrade parameters that are flexed locally (e.g., range)
● Parties overlapped in c. 1,000 local areas so not possible to conduct area-by-area assessments
● Closeness of competition assessed by weighted share of shops (WSS) methodology, producing a
GUPPI-based decision rule
● Relative weight attached to each store reflected: (1) "brand"; (2) size; and (3) distance
● In contrast to Parties’ submissions, no set 5% GUPPI threshold in precedent of UK authorities; previous
decisions have used a range of values and consistently highlighted the fact-specific nature of assessment
● Based on circumstances in this case, threshold for concern set at 2.75%, reflecting:
- Efficiencies of 1.25% (for £500 million of rivalry-enhancing efficiencies in groceries and GM)
- The need for the lessening of competition to be “substantial” (given that groceries are non-
discretionary expenditure that accounts for a significant share of household spend); and
- An allowance for uncertainty in the CMA’s analysis (to reduce the risk of “false positives”)
● Application of decision rule results in SLCs in 537 local areas
28Sainsbury’s/Asda (ME/6752/18)
Process and Timing: chronology of a 12-month investigation
Pre-notification Phase 1 Core Phase 2 fact-finding Reaching final conclusions
investigation
19 16
23 August September October 14 25 April
23 May Phase 1 (W1) (W5) December 20 February (W32)
First investigation Phase 2 Issues (W13) (W23) Publication
submission by begins (Fast- investigation Statement CAT PFs of final
Parties track) begins published hearing published report
2018 2019
April May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr
30 April 27 19 11 February
Parties November December (W22)
announce 30/31 (W11) (W14) Extension of
merger October AIS issued Main party the deadline
(W7) (along with hearing
Site visits final WPs)
Late September – October – early
November
Surveys carried out
Early / Mid-
November
Third party
hearings
29PayPal/iZettle (ME/6766/18)
More competitive counterfactual
● Parties both supply on-store/offline payment services through mobile point of sale (mPOS) devices, with
iZettle also entering to compete with PayPal in “omni-channel” payment services
● PayPal would have been a stronger competitor than it currently was absent the merger, stemming the
decline in PayPal Here’s competitive position:
- PayPal’s internal documents showed a commitment to developing a strong omni-channel offering
- PayPal had considered several investment, acquisition and partnering options
- PayPal would have had the resources to pursue these options
- But, limitations in what PayPal could achieve in the shorter term to enhance PayPal Here’s
competitive position
● Notwithstanding a more competitive PayPal, case cleared on basis of constraints from traditional “POS”
suppliers (principally Worldpay and Barclaycard) – as evidenced in CMA’s Phase 2 survey
30PayPal/iZettle (ME/6766/18)
Assessment of potential competition – omni-channel services to smaller merchants
Would iZettle be likely to enter into omni- Would such entry lead to greater competition?
channel services absent the merger?
• 2nd Limb: The CMA found
▪ iZettle would likely have focussed on developing ▪ Competition in omni-channel solutions for
existing lines of business, rather than omni- smaller merchants is in early phases
channel offering
▪ Existence of significant competitors and
▪ Overall, available evidence suggested that any likelihood of future entry meant that small-scale
expansion into online payments would have of iZettle expansion would not have led to
proceeded at a slow rate greater competition
31Illumina/PacBio (ME/6795/18)
Forward-looking assessment in next generation sequencing systems
● Parties active in supply of DNA sequencing systems (Illumina active in “short read” sequencing, PacBio
active in “long read” sequencing)
● Highly concentrated market because of Illumina’s very strong market presence (90% share in UK)
● CMA placed particular weight on internal documents in assessing how the merging parties saw
competition in the future, both in terms of their own strategic plans, which showed (in particular) that:
- Illumina saw threat that instrument purchases or workflow would be lost to PacBio
- Illumina had taken action, or had considered taking action, in response to the competitive threat
from PacBio
- Competition between the merging parties was increasing (and would likely continue to increase)
because of technical improvements to PacBio’s technology
● Innovation is key aspect of competition in market and Parties considered each other to be important
strategic rivals in this regard, so would eliminate a factor that currently drives R&D and innovation
● Other rivals would not be sufficient to sufficiently constrain the Merged Entity
32Illumina/PacBio (ME/6795/18)
Cooperation with other authorities
The merger was reviewed in parallel by US Federal Trade Commission, who issued their
second request shortly before the case was notified to the CMA
Co-operation was made possible by the merging parties signing waivers for the
sharing of information between authorities (standard practice in mergers subject to
reviews by multiple competition authorities)
FTC sued to block the transaction in December 2019, on broadly the same basis as
the concerns outlined in CMA’s provisional findings.
Parties ultimately abandoned the transaction in early January 2020
33Thermo Fisher/Roper (ME/6773/18)
Provisional prohibition in light of vertical competition concerns
● Thermo Fisher, a manufacturer of high-tech electron microscopes used for scientific research (TEMs),
sought to acquire Roper (Gatan), a supplier of “peripherals”, such as filters and cameras, used in the
operation of microscopes
● Input foreclosure theory of harm based on Gatan’s position in various upstream peripherals markets gave
rise to SLC in provisional findings
● Separate vertical SLC based on information-sharing – i.e., that Thermo Fisher would obtain access to
commercially sensitive information (e.g., sales and bids and/or technical product specification and product
innovation plans) about the activities of its rivals in the supply of TEMs through Gatan
● Long-term supply agreements entered into with two main rivals in supply of TEMS, to come into effect on
completion of the Merger, were not sufficient to address foreclosure or information-sharing concerns
(given difficulties in monitoring and enforcement in particular)
● Also horizontal competition concerns in supply of DD cameras (the Parties were the two largest suppliers)
and filters (potential competition)
34Procedural infringements
35Breaches of interim measures
Two penalties imposed for breaches of interim measures
● £146,000 penalty imposed on Nicholls in June 2019, for three breaches:
- Relocation of target staff to acquirer premises (before CMA consent given)
- Use of acquirer-owned and branded fleet to make target deliveries
- Late submission of compliance statements
● £250,000 penalty imposed on PayPal in September 2019:
- CMA had granted a derogation from the IEO to allow parties to engage in international integration
activities involving cross-selling campaigns
- In support of its derogation request, PayPal submitted that any integration activities would be
confined to non-UK potential customers and would not impact on the UK
- Contrary to the derogation, PayPal contacted 76 potential UK customers as part of cross-selling
campaigns to German and French target customers
36Incomplete responses to information requests
Three penalties imposed for incomplete responses to statutory information requests
● £15,000 penalty imposed on AL-KO in May 2019:
- Over 500 documents, relating to CEO of acquiring business and of matters of central importance to
CMA’s investigation, produced over four months late
- Negligent errors – and third material failure to respond during investigation
● £27,000 penalty imposed on Rentokil Initial in September 2019:
- Pattern of errors in responding to statutory information requests, often failing to provide more than
half the responsive documents
- Evidence was highly relevant to CMA’s assessment of transaction (including scope of relevant
merger situation); evidence Rentokil failed to provide was inconsistent with its written and oral
submission
- Flagrant errors with senior management involvement
● £20,000 penalty imposed on Sabre in September 2019:
- Late provision of documents that had been systemically over-redacted for legal privilege (444
documents in total incorrectly withheld or redacted)
37Developments in policy and practice
38Brexit: next steps
CMA approach in Transition Period
● "Transition Period" since 31 January 2020 – due to last until 31 December 2020 (and Government has
indicated that will not be extended)
● During Transition Period:
- "One-stop-shop" remains in place; division of jurisdiction remains the same as pre-Brexit
- Mechanisms for case referrals remain in place
● Towards end of Transition Period:
- Commission retains jurisdiction over cases formally notified or referred before 31 December 2020 (in
practice 23 December 2020) – so "start date" rather than "end date" is the key cut-off
- Merging Parties encourage to promptly engage with CMA where merger might not be formally
notified to Commission before end of Transition Period
- Increased mergers monitoring of cases that my fall under UK jurisdiction at end of Transition Period
● After the end of the Transition Period: one-stop-shop no longer applies; UK turnover no longer relevant
to EU thresholds; Commission and CMA may conduct parallel investigations
39Merger control in dynamic markets
• Challenge of considering uncertain future market outcomes in dynamic markets where products, processes
and/or business models evolve rapidly
Analytical approach • Evidence-led approach (e.g., learning from previous mergers and considering what could have been done
differently)
• Engagement with learnings from market study on online platforms and digital advertising, DaTA team,
cooperation with international authorities on individual mergers and merger policy
Sources of • Particular focus on: internal documents of merging parties and third parties (on commercial strategies and
evidence plans for the future); deal valuation materials; third party forecasts and analyst reports; “deposition”
interviews with key business people
Changes to • Regime largely fit-for-purpose but continue to consider case for legislative change to jurisdictional and/or
substantive tests as review continues
jurisdictional or • Exploring case for introducing a parallel regime for acquisitions by companies designated as having
substantive tests? “strategic market status” (building on regulatory regime envisaged by Furman Report)
Review of the • Fruitful “call for information” on digital mergers intended to feed into forthcoming changes to Merger
Assessment Guidelines
Merger Assessment • Currently expect to release a revised draft of the guidelines for external consultation in the second half of
Guidelines this year
40Other developments in policy and practice
Continued "tidying-up" Changes to Phase 2 Chairman’s reform
of existing guidance process programme
• Ongoing consolidation and • Changes to facilitate greater • In particular, “hybrid” merger
“refresh” to reflect current degree of international control system, with
practice cooperation post-Brexit mandatory notification of
• Already published: interim • Reduce unnecessary larger “international” mergers
measures; exceptions to duty to duplication in evidence-
refer; remedies gathering (while preserving
• Forthcoming: Jurisdictional and independence of Phase 2
procedural guidance decision makers)
41The Law Society Tuesday 10 March 2020 Closing remarks Chair: Matt Evans, chair, Competition Section Advisory Committee, and partner, Jones Day Speaker: • Colin Raftery, senior director of Mergers, Competition and Markets Authority
The Law Society Upcoming Competition Section events 2020 – Book/Save the date 14 April 2020: Competition Section seminar Reverse patent settlements and the GSK case • Speakers: Brian Sher, partner and co-head of Competition, CMS 14 May 2020: Competition Section annual conference • Keynote speaker: Sarah Cardell, general counsel, Competition & Markets Authority 9 June 2020: Competition Section seminar: Presidents update: Competition law today and tomorrow • Speaker: Professor Richard Whish 14 July 2020: Competition Section seminar: EU merger control and life after Brexit - the view from Brussels • Speaker: Balasz Horvasz, EU Commission
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