Balanced Economy Project submission to the CMA’s call for evidence: Merger efficiencies review

“Reviewing our approach to assessing merger efficiencies” consultation argues that the CMA should not lower the bar when companies argue that a merger will bring “efficiencies”. Claims around efficiencies are often used to dress up normal cost-cutting or speculative plans as consumer benefits. They are often hard to verify, even though the loss of competition from an anti-competitive merger can be long-lasting.

The CMA’s current approach is broadly right. The priority should be to apply it consistently and insist on clear, real-world evidence of efficiency claims, especially in markets that are already highly concentrated, and where it is hard for customers to switch. The submission also suggests a simple practical improvement whereby merging parties should set out any efficiency claims early and clearly. By setting out clear, evidenced-based claims, the CMA can filter out modest or poorly substantiated claims, and can focus on the ones that could genuinely matter.

Please see attached submission