Out-Law News 1 min. read

UK's competition watchdogs co-ordinate merger rules


Competition authorities the Office of Fair Trading (OFT) and the Competition Commission (CC) revised their rules on how they decide whether a merger breaks competition law.

The two bodies each published guidelines for companies on which mergers were likely to cause competition concerns and which were not. They have now revised and expanded that guidance and combined it into one joint set of merger assessment guidelines.

"The guidelines set out the questions the CC and OFT will consider when reviewing mergers, how they define a 'relevant merger situation', what is meant by a 'substantial lessening of competition' (SLC) and the criteria and methodology used when assessing mergers," said a statement from the bodies. "The guidelines also deal with public interest cases."

The new guidance explains the 'theories of harm' the OFT and CC use to determine whether a deal damages competition; and shifts the focus of the bodies away from detailed definitions of markets and towards the real effects of a deal on competition.

"The new joint guidelines represent a modern, flexible approach to applying tried and trusted principles, drawing on seven years of experience since the Enterprise Act came into effect," said OFT chief executive John Fingleton. "By joining up the approaches of the OFT and CC, these new guidelines will help to ensure that the steps that we follow are clear and that analysis is carried out consistently."

"Of course, this is only guidance – merger analysis cannot be done rigidly or mechanistically, as cases vary considerably in practice," said CC chairman Peter Freeman said. "But we aim to follow up these guidelines with future clarification, where appropriate, on specific aspects of merger analysis."

The guidelines replace OFT guidance on substantive assessment of mergers, on the acquisition of 'failing firms'; and CC guidance on merger references.

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