New UK Competition And Markets Authority: What's In A Name?

Key Points

As of 2014, there will be one national Competition and Markets Authority.

Merger Control

The UK merger control regime will remain voluntary. The operations of the Office of Fair Trading and Competition Commission will be merged under the Competition and Markets Authority. It is yet to be determined whether the case team will remain the same in both between Phase One and Phase Two investigations. Decision makers will remain separate for Phase One and Phase Two investigations. Cartels

To improve enforceability and levels of prosecution the "dishonesty element" will be removed from the offence. A new safe harbour will be introduced providing protection to companies if they publish in the London Gazette (or a similar publication) business arrangements before they are implemented. A limited disclosure to customers of arrangements which could fall foul of competition law, but which have other countervailing benefits may also trigger the availability of the safe harbour.

Summary

On 16 March 2011, the UK government's Department for Business, Innovation and Skills (BIS) launched a consultation proposing a number of reforms to the UK competition regime. After considering the responses on its proposals from interested stakeholders, the BIS released its final response on 15 March 2012. In a retreat from a wide array of changes proposed in the initial consultation, the number of changes actually endorsed is relatively limited. This DechertOnPoint focuses on the following significant changes:

Procedural updates to the UK merger control system; The merging of the existing UK competition authorities to create one single over-arching body: the Competition and Markets Authority (CMA); and Amendments to the criminal cartel offence to increase the prospect of successful prosecution. The Consultation

The consultation was part of the UK government's plan to support and encourage economic growth by overhauling and strengthening the UK competition regime to eliminate inefficiencies and make the regime more predictable for businesses.

The government received 115 responses from organisations including SMEs and large enterprises, representative organisations, Government organisations, legal and academic bodies and other interested parties on different aspects of the proposed amendments.

Merger Control Updates

The Current System

In the UK, the current merger control regime is voluntary. This means that even if the relevant jurisdictional thresholds are met, it is not mandatory to notify the transaction to the UK competition authorities. The jurisdictional thresholds for notification in the UK consist of two alternative tests:

Share of supply: the merger would create or enhance a 25% share of any market in the UK; or Turnover: the target's turnover is over GBP 70 million in the UK. If either threshold is met, parties to a transaction should consider whether it is necessary to notify the transaction to the UK authorities in light of the substantive issues raised by the transaction and/or of the desire for legal certainty. These thresholds will not change.

As the regime is voluntary, parties...