UK Antitrust Authority Seeks Powers To Increase Merger Scrutiny, Issue Sectoral Interim Regulations And Weaken Judicial Accountability

On 21 February 2019, the U.K. Competition and Markets Authority (CMA), at the U.K. government's request, set out 'wide-ranging and radical' proposals to reshape U.K. competition enforcement and consumer protection regime.1

These are proposals at the very earliest stage, and they remain far from becoming government policy. Still, the CMA has been vocal in positioning itself as a consumer champion and ties this effort to its role within a post-Brexit U.K. Some of these proposals may therefore have traction. If enacted, they would represent a step change in U.K. antitrust enforcement.

Summary

The proposals mark a significant intensification of merger control and antitrust investigations in the U.K.:

Mandatory merger control regime: for the first time, the CMA recommends that large international mergers be subject to mandatory U.K. filings. This will significantly increase the regulatory burden, and potentially the approval timetable, in cross-border M&A. Power to issue consumer protection interim orders, fines and regulations: he CMA seeks to add to its power the issuing of consumer protection rules, whether or not competition harm is identified. It also seeks the power to injunct consumer protection breaches on an interim basis and levy fines for breach of consumer laws (up to 10 percent of turnover). Consumer presumption for interim relief and marketwide interim orders: the CMA seeks the power to order an interim change to the market pending the publication of the final report in a market investigation. It also seeks to impose a statutory duty on the CMA and courts to prioritise consumer interest over any corporate burden in interim relief proceedings. This would create a lower barrier for ordering interim relief, a power historically rarely used by the CMA. A whistleblowers' charter: the CMA recommends substantially increasing the rewards to whistleblowers from the current £100,000 limit, noting that the increased fines that might be imposed under the new powers would more than pay for the increase. It references though does not advocate the SEC's power to award 10 to 30 percent of any fine to the whistleblower. Ceding criminal powers to the Serious Fraud Office (SFO): conceding its weak record and limited resources for criminal cartel enforcement, the CMA suggests this power be transferred to the SFO. It recommends instead increasing the use of director disqualifications and contemplates personal administrative penalties. Weakening...