Mergers and the Public Interest: the hardest nut to crack for CMA’s new Chief Executive?

May 24, 2016

(by David Reader) After two years at its helm, the Chief Executive of the UK’s Competition & Markets Authority (CMA), Alex Chisholm, is stepping down to become the new Permanent Secretary at the Department for Energy and Climate Change (DECC). His departure marks the end of an era for the competition watchdog which, despite only becoming fully operational in April 2014, has reached a number of key milestones during his tenure. In a recent speech reflecting on the CMA’s achievements over the last two years, Chisholm made reference to notable progress on enforcement activity, efficient merger control and, of course, some very high-profile market inquiries.[1] His verdict, then, is that there is cause for optimism as the authority embarks on a new chapter. But the outgoing CEO is also mindful of ‘the 3 big challenges’ that lay ahead for his successor.  Perhaps the most striking of these ‘harder nuts to crack’, as Chisholm puts it, is the CMA’s ability to deal with ‘challenges to the primacy of competition analysis when sensitive mergers give rise to calls for public interest interventions’.[2] Read the rest of this entry »


BT/EE Merger: the importance of market definition

January 20, 2016

(by Richard Cadman) Last Friday, the Competition and Markets Authority (CMA) gave unconditional approval to the acquisition by BT, the UK’s largest fixed telecommunications provider, of EE, its largest mobile communications provider.  The CMA concluded, after a nine-month long investigation, that the merger would not lead to a Substantial Lessening of Competition (SLC) and that neither the wholesale nor retail customers of both companies would suffer any harm from the merger.  How much did this depend on product market definition? Read the rest of this entry »


Would Jeremy Corbyn as Prime Minister mean the end of Competition Policy?

August 17, 2015

(by Andreas Stephan) The UK’s Labour party is currently in the process of selecting a new leader. The front-runner, Jeremy Corbyn, may become Britain’s first socialist Prime Minister in a generation. This blog post considers what a Corbyn government could mean for competition policy. Read the rest of this entry »


Pfizer/AstraZeneca and the Public Interest: Do Vince Cable’s Foreign Takeover Proposals Prescribe the Right Medication?

August 12, 2014

(by David Reader) When US pharmaceutical giant Pfizer sought to acquire its UK-listed counterpart AstraZeneca earlier this year, discussion centred around the supposed adverse impact that the merger could have on the UK’s science base, particularly in light of Pfizer’s questionable track record for asset-stripping and cutting investment in R&D. Although the proposed £69 billion takeover ultimately crumbled, the prospect of Pfizer returning with an improved offer later in the year has led many to ask whether the UK should adopt a tougher stance on foreign takeovers that threaten the national interest. The UK’s Business Secretary, Vince Cable MP, has since proposed new safeguards to counteract these perceived threats – but do they represent the best course of action in practice? Read the rest of this entry »


Ofcom: A Credible Solution to Bias in Media Public Interest Mergers?

February 16, 2014

(by David Reader) On 4 February, the House of Lords Select Committee on Communications published its Report on Media Plurality proposing a number of changes to media ownership regulation in the UK. Among the most notable is the proposal to grant decision-making powers to the media regulator, Ofcom, in mergers raising potential media plurality concerns. At present, this role is performed by the Secretary of State but, as has been noted in a previous post by Andreas Stephan, the ability of politicians to undertake this role impartially has recently been called into question. In particular, the close contact between a NewsCorp lobbyist and a Special Adviser to (the then Culture Secretary) Jeremy Hunt during the NewsCorp/BSkyB assessment, as exposed by the Leveson Inquiry, highlights the sheer extent to which politicians can be subjected to undue influence in the media sector. Re-allocating the decision-making role to Ofcom could overcome this problem, but it could equally amount to substituting one problem for another. Read the rest of this entry »


Competition concerns mean Lloyds should be required to float HBOS following failure to divest branches to the Co-op

April 25, 2013

[by Bruce Lyons] It has just been announced that the sale of 632 Lloyds branches to the Cooperative Bank has fallen through.  Some people thought this would have created a competitive market structure in UK retail banking.  The lessons from research on divestitures by the US FTC, EU DG Competition and academics suggest otherwise.  In particular, necessary conditions for a divestiture package to restore competition include that the package must not be carved out of an existing business, it must have sufficient scale and scope, and it should not be sold to a weak buyer.  The proposed sale of branches to the Co-op met none of these basic requirements.  Why not?  And is there a way forward from here? Read the rest of this entry »


Monitor’s Advice to the OFT and the New Healthcare Regulation

February 20, 2013

(by Mary Guy)[1] On 11 February, Monitor (the UK’s independent regulator of NHS foundation trusts) published its advice to the Office of Fair Trading (OFT) regarding the anticipated merger of Poole Hospital NHS Foundation Trust and The Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust (hereafter “the Dorset FT merger”). This is the first NHS merger to be assessed on competition grounds under the Enterprise Act 2002 (EA02) merger provisions as implemented by the Health and Social Care Act 2012 (HSCA 2012). It has been referred by the OFT to the Competition Commission (CC), which will produce its final report by June 24, 2013. Read the rest of this entry »


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