The Competition and Markets Authority (“CMA”) has launched a formal review of its approach to merger remedies, stating that it wants to ensure that its approach embodies the ‘4P’ framework of pace, predictability, proportionality, and process, which is at the heart of is new Mergers Charter (discussed here).

The review into merger remedies has commenced with a Call for Evidence that addresses three broad themes:

1. The CMA’s approach to remedies

Under the existing Merger Remedies Guidance, the CMA can opt not to make a reference to phase 2 and instead accept undertakings in lieu of reference (UILs) only where the remedies proposed to address any competition concerns are “clear cut” and “capable of ready implementation”. The Call for Evidence asks whether these requirements should be revisited and whether more can be done in general to “create opportunities for more complex remedies in phase 1”.

Structural and behavioural remedies are also under the microscope: among other things,  the CMA asks in what circumstances behavioural remedies are most likely to be appropriate and how it should assess their effectiveness, as well as whether it should take a different approach to behavioural remedies at both phase 1 and phase 2. More broadly, the Call for Evidence also asks whether the distinction between structural and behavioural remedies is “helpful and meaningful” and, if not, how the CMA should classify different types of remedies.

Finally, so called ‘carve out’ divestment remedies receive specific attention. As the CMA explains, given that these remedies involve something less that the divestiture of an existing ‘standalone’ business (and instead just part of the business of a collection of assets), there is added complexity in terms of so-called ‘composition’ and ‘purchaser’ risk. The CMA invites views on how such risks can be mitigated and whether lessons can be drawn from the experiences of other jurisdictions.

2. Preserving pro-competitive merger efficiencies and merger benefits

The CMA invites views on how remedies can be used to preserve two types of potential benefits from mergers: (1) locking in pro-competition efficiencies in markets where the competition concern arises; and (2) so-called ‘relevant customer benefits’ which can arise in or outside the market in which the competition concern arises. It invites views, for example on what evidence the CMA should consider when assessing the ‘materiality’ and ‘likelihood’ of claimed rivalry enhancing efficiencies and, more generally, on what the CMA can do to ensure that its approach to mergers remedies encourages pro-competitive investment.

3. Running an efficient process

Finally, the Call for Evidence invites views on how the remedies process can be improved at all stages, including (a) asking how phase 1 can be improved to allow for more complex remedies to be assessed within its timeframes; (b) whether the new phase 2 process adequately facilitates early remedy engagement and if it can be further refined; (c) how the process can take account of competition authorities in other jurisdictions which are acting in parallel; and (d) any procedural improvements to the remedies implementation phase.

The Call for Evidence is open until 12 May 2025, and can be read in full here.