CMA consultation on document requests in merger investigations

The Competition and Markets Authority is consulting on draft guidance on requests for internal documents in merger investigations.  This reflects a tightening of the CMA’s approach in this area and is intended to assist merging parties to provide responsive and complete information.

The CMA states that it is likely to use section 109 notices in future investigations where internal documents are requested from main parties in both Phase 1 and Phase 2 merger investigations.

The guidance is well due, particularly as merger filing requirements in the UK are becoming more onerous in terms of document production. 

Although there are differences between the various notification forms internationally (and the information required from jurisdictions that do not require an actual form to be completed), a general range of boilerplate and often substantive questions and issues need to be considered.

The more straightforward filing under the Hart Scott Rodino Act in the US has not been the model favoured by the majority of the world’s merger control jurisdictions.  However, even in the US a filing needs to be accompanied by documents prepared by or for officers or directors used to evaluate or analyse the acquisition with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets.  In most jurisdictions, significant time and costs are involved in preparing merger notifications.  The supporting documents that need to be provided with the notification also vary by jurisdiction.

The CMA seeks responses to this consultation on the draft guidance by 25 April 2018.

Source: https://www.gov.uk/government/news/cma-tightens-its-approach-to-requests-for-internal-documents

Comparative Competition Law Summer School

Project description

The Comparative Competition Law Summer School launches in mid-June 2018. I have designed this programme in association with and will be delivering it at Brunel Law School.

This 2-week integrated and intensive programme (with optional components) combines UK, EU, Asian and international experience in this fast-moving, challenging and high-profile area. It draws on experiences from established and emerging competition regimes with a focus on India and Hong Kong which have recently adopted competition law. The impacts will be explored across the economy and within certain sectors that have attracted regulatory scrutiny.

The programme includes cultural immersion on Campus and in legal London, allowing international participants to engage with each other and build their networks in academic, professional and social settings.

To book a place or to download a brochure, please visit the summer school site for full details:

http://www.brunel.ac.uk/law/brunel-comparative-competition-law-summer-school/home


Comparative Competition Law Summer School

UK amendments to merger control on national security

The Department for Business, Energy & Industrial Strategy (BEIS) has published the government's response to its October 2017 Green Paper. This confirms the government’s decision to amend the jurisdictional thresholds in section 23 of the Enterprise Act 2002 for changes in control over enterprises that are active in three sectors: the development or production of items for military or military and civilian use; quantum technology; and computing hardware).  These changes are the first substantial changes to merger thresholds since the Enterprise Act 2002 came into force.

The turnover threshold applicable to such mergers will be reduced from £70 million to £1 million.

The share of supply test will be met where a merger involves a target with 25% or more share of supply of the relevant goods and services in the UK, as well as where the merger leads to an increase in the share of supply to, or above, this 25% threshold (i.e. the current share of supply test).

The CMA has published draft guidance on the changes to the jurisdictional thresholds.

It is not clear that a merger control jurisdictional test linked to turnover is the most appropriate measure in the relevant sectors.  Respondents to the consultation suggested that an assets test would make more sense.

The link to national security concerns isn’t that clear in the relevant sectors which are drafted broadly.  There is a risk that the changes will create more uncertainty for merging companies who may seek upfront clearance on both national security and competition grounds.  The reduction in the thresholds will affect transactions in all the three sectors and not just those raising national security issues.

It is likely that as a result of the changes a larger number of transactions in the relevant sectors will fall within the CMA’s merger control jurisdiction. 

The CMA invites comments on the draft guidance by 12 April 2018.

Implementation of Damages Directive

The European Commission confirmed on 8 March 2018 that it has closed infringement procedures against 18 member states for their failure to implement Directive 2014/104 on actions for damages under national law for infringements of competition law (the Directive) (OJ 2014 L349/1).

The Directive states that it is designed to ensure that “anyone who has suffered harm caused by an infringement of competition law…can effectively exercise the right to claim full compensation”.  The broad aim of the Directive is to address the impediments to the effective enforcement of competition law in the majority of Member States and to establish minimum standards and approaches in the procedural rules.

Member states were required to implement the Directive by 27 December 2016.

A number of states failed to fully implement the Directive.   In 2017, the Commission opened infringement procedures against seven member states

Following the opening of infringement proceedings, 18 member states transposed the Directive in 2017.

Bulgaria notified its transposition in early 2018.

The Commission invited Greece and Portugal to take the “necessary steps” to ensure full implementation.

It should be recognised that the Directive does not establish minimum standards regarding collective actions across the Member States. However, the Commission has issued a recommendation to the Member States to encourage the facilitation of collective redress.  Some Member States – notably the UK and France - have introduced measures to foster such actions.  In the coming years this is likely to be one of the areas of greatest disparity in the rules at Member State level and which will therefore require careful consideration as to the appropriate forum for bringing a private action.

MEMO/18/1444

Payment Systems Regulator launches first competition investigation

The Payment Systems Regulator (PSR) has launched its first competition investigation probe on the back of a “significant number” of dawn raids.

There is limited public information on the scope of the investigation, although the PSR’s head of legal has confirmed that the PSR worked in close cooperation with the CMA on the case.

The PSR is a concurrent regulator for the purposes of competition law investigations under the Competition Act 1998/ Articles 101/ 102 TFEU.

The identity of the defendants is unknown at this stage and this information is unlikely to be made publicly available until a statement of objections is issued.

It appears that the raids were conducted at multiple premises across the UK, suggesting that a focus of the investigation at this stage may be on anti-competitive agreements.

The initiation of the investigation and the use of an unannounced inspection visit is an important step for a newer competition regulator.   The PSR acquired competition powers in relation to participation in payment systems under the Enterprise Act 2002 in April 2014 and under the Competition Act 1998 in April 2015.