CMA announces reform plans for merger review process

 

The Competition and Markets Authority is consulting on changes to its mergers jurisdictional and procedural guidance (CMA2).

The main changes include:

·        Opportunities for merger parties to engage directly with the CMA early in the process.

·        An "interim report" will be published earlier in the process, replacing the provisional findings report and setting out the CMA's provisional assessment of the impact of the merger on competition.

·        Earlier without prejudice remedy discussions between the CMA and merger parties.

The issues statement will be abandoned and, instead, the CMA will invite submissions on the Phase 1 decision. greater opportunities for economic experts to engage with the CMA's experts.

There are other changes to the revised guidance to reflect developments in the CMA's practice and in case law. These mainly relate to confidentiality and disclosure.

While the reforms reflect some important streamlining of the CMA’s merger review process, the CMA has declined calls to grant merger parties full access to evidence provided by third parties.

The CMA has also published for consultation a draft of the proposed new Phase 2 Remedies Form and a revised draft Template Waiver.

A revised draft Merger Notice is also available for comment.

Interested parties should provide responses to the consultation by 8 January 2024.

https://assets.publishing.service.gov.uk/media/655788a4046ed400148b9b2f/Consultation_document_Nov23.pdf

National Security and Investment Act – Call for Evidence

 

 

On 13 November the Cabinet Office issued a call for evidence in relation to the National Security and Investment Act 2021 (NSIA) to collect views on how the national security and investment regime can be more business friendly.  It also sought views on how the provisions could be refined while protecting national security.

Specifically, the call for evidence is designed to identify views on:1) the impact of the NSI regime on businesses and investors, 2) whether the scope and requirements of the NSI regime are proportionate and effective, and 3) how stakeholders understand the NSI regime.

The NSIA replaced the Enterprise Act in January 2022.  It allows the government to scrutinise and intervene in acquisitions in 17 sensitive industries that could harm the UK’s national security.  The government has cleared around 93% of transactions it has reviewed within 30 working days, while it has remedied or prohibited 17 deals.

There are concerns that the NSI regime may be cast too widely; not least since the rules can even require companies with no UK operations to notify investments.

The call for evidence may be regarded as a natural evolution of a maturing regime. The rules require a review within three years of implementation so the timing of the  consultation is not surprising.

Responses to the call for evidence should be submitted by 15 January 2024.

 

https://www.gov.uk/government/calls-for-evidence/call-for-evidence-national-security-and-investment-act

CAT ruling in collective proceedings against Apple in battery throttling case

The Competition Appeal Tribunal has granted, subject to funding matters, a collective proceedings order (CPO) brought by Mr Justin Gutmann to start collective proceedings under section 47B of the Competition Act 1998 against Apple Inc., Apple Distribution International Limited, and Apple Retail UK Limited (together, Apple).

The application relates to alleged breaches by Apple of Article 102 TFEU prior to 31 December 2020.  The application claims that the abuse derives from Apple's lack of transparency in failing to inform consumers of issues surrounding battery health of their iPhones and the resultant impact on the performance of their iPhone, such that Apple would have been required to compensate them.

The CAT first rejected Apple's strike-out application, which submitted that Mr Gutmann had not established any abuse on the facts.

However, the CAT found that there was a reasonable prospect of Mr Gutmann showing at trial that the negative impact on the performance of affected iPhones was sufficiently material.

The CAT also found that the methodology being advanced by Mr Gutmann offered a realistic prospect of establishing loss on a class wide basis if he established relevant facts at trial. In addition, it was just and reasonable that Mr Gutmann act as the class representative in these proceedings.

However the claimants have informed the CAT they may need to alter their funding arrangements following the Supreme Court’s recent ruling in PACCAR in July, 2023.

The claimants have also stated that Apply has settled a similar class action in the US in August 2023 for approximately USD500 million.

Mr Justin Gutmann v Apple Inc and others, judgment [2023] CAT 67