When the UK Competition and Markets Authority (CMA) published its revised Merger Assessment Guidelines back in 2021, it signalled that it would put less weight on market shares, and more on closeness of competition and the individual merits of each case.
However, in local merger cases, it has moved in the opposite direction. The CMA has taken a more mechanistic approach, with ‘decision rules’ often based entirely on market shares and an unwillingness to consider evidence on individual local areas.
This approach has not produced more consistent and predictable outcomes. To the contrary, because the detail of the CMA’s approach varies from case to case – often without much explanation – it is difficult for businesses and advisers to predict the outcome, even in an industry the CMA has looked at recently.
This is creating considerable uncertainty for businesses. So what is going wrong, and how can a firm prepare for a CMA merger investigation in this new world?
In our latest article, we break down the key aspects of a local merger assessment, highlight the key issues to be aware of, and provide practical advice to firms contemplating an acquisition in markets where geographic location is relevant. We also suggest ways in which the CMA could improve its approach. With the EC introducing catchment areas to its newly published market definition notice, our article has relevance for defining geographic markets in a broad range of jurisdictions.
