The CMA is consulting on its approach to assessing efficiencies in merger investigations. RBB welcomes this development. In our view, there is scope to give greater prominence to efficiency arguments on a case-by-case basis. We believe that the current merger control framework has tended to focus disproportionately on short-term price effects when assessing efficiencies. This approach is ill-suited to capture the dynamic benefits (including generating competitive responses from rivals) that mergers can deliver, and we argue that merger control should explicitly recognise the value of longer-term consumer benefits, even where these are less certain than short-term effects. In our response, we argue that the CMA's process for assessing efficiency arguments could be improved substantially by setting out guidance which establishes:
a wide-ranging description of the numerous efficiencies that may arise as a result of mergers (with examples of how each of the various efficiencies could be established and how they may benefit consumers);
a more holistic approach to the assessment of efficiencies alongside potential anti-competitive effects, accompanied by a discussion of how the CMA would weigh up offsetting effects in practice;
a more realistic approach to merger-specificity, i.e., one which states clearly that the CMA will not benchmark against speculative alternative routes to achieving the claimed efficiencies; and
a more balanced standard of proof, which gives equal weight to inculpatory and exculpatory evidence.
