Government Plans to Overhaul Merger Review Process

The government will unveil plans for a radical overhaul of the way mergers are reviewed in Britain, including reforms that will consolidate the power of the competition regulator’s chief.

Abolition of the CMA Panel System

The Department for Business and Trade will announce the abolition of the Competition and Markets Authority’s (CMA) panel system, which brings together independent experts to assess whether company accounts raise serious antitrust concerns.

Limitations on the CMA’s Jurisdictional Powers

A government source said the CMA’s ability to review certain types of mergers, such as those involving two foreign companies, could be limited by new limits on the regulator’s jurisdictional powers. Officials had also considered removing the ability of those affected by merger decisions to appeal the rulings on their merits, but leaving intact the ability to seek judicial review.

Refining Market Investigations

The CMA’s previous practice of extensive market investigations of entire sectors will be refined by combining the CMA’s market studies and market investigation processes into a single procedure that lasts between six and twelve months.

New Sub-Committees

The CMA will set up a sub-committee of the board to examine mergers that are the subject of the more detailed Phase 2 investigations and another to oversee the broader market studies. The agency’s chief executive will be eligible to serve on at least one of those board subcommittees, resulting in the agency’s boss having much greater influence over the cases it investigates.

Concerns Over Independence

The mergers subcommittee is expected to be supplemented by outside experts, which critics may argue is an inferior imitation of the existing panel system. The proposed changes have raised concerns about the independence of merger investigations, with some arguing that the system will be more vulnerable to political influence.

Expected Announcement

The plans are expected to be announced at the World Economic Forum in Davos, Switzerland, and will reportedly support the government’s focus on boosting economic growth. The government believes the reforms will speed up decision-making and give businesses greater certainty. However, ministers are expected to face questions about the potential risks of the proposals.