CMA
urges mandatory merger notification for tech transactions
The
Competition and Markets Authority has advised the government to implement a new
mandatory merger notification regime for transactions involving technology
companies that have “strategic market status”.
If
implemented, the proposals would add another layer of complexity to UK merger
control which, up to now, has operated largely on a voluntary basis.
The
CMA expects the new rules would bite on a small number of transactions
involving digital platforms. Its new
digital competition unit would prioritise designating those that have an annual
UK revenue of over £1 billion.
Questions
have been raised about whether the CMA really needs a new tool to intervene in
these cases. It has in the past asserted
jurisdiction over deals which generate no UK turnover including Roche/Spark and
Sabre/Farelogix.
A
practical question arises as to how the UK can exercise effective remedies in
cases which, by definition, will involve businesses that operate globally in
integrated platforms. This probably
calls for a more coordinated approach to international scrutiny of high profile
technology deals which could be subject to multiple and inconsistent reviews.
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