Our submission to the CMA’s consultation on merger remedies

Balanced Economy Project, Article 19, Open Markets Institute, Rebalance Now and SOMO welcome the opportunity to comment on the UK’s Competition and Markets Authority (CMA) consultation on the design and implementation of merger remedies. 

In our submission we question the CMA’s proposed change of approach towards the types of remedies it deems acceptable when it decides to approve mergers that raise competition concerns, but which are allowed to go ahead if the competition problem can be solved by remedial action. Behavioural remedies consist of promises to do something or not to do something in an attempt to mitigate the problems caused by a merger. Structural remedies prevent the emergence of the problems in the first place.

The CMA, alongside many other competition authorities, has traditionally favoured structural remedies to preserve competition in markets. However, the current consultation suggests a change of tack towards an increased reliance on  accepting behavioural remedies. This runs the risk of weakening merger control and ultimately harming businesses, consumers and the UK economy. 

Given the broad consensus on the effectiveness of structural remedies, we are not convinced that there is sufficient empirical evidence from academic studies and analysis of its previous merger decisions to justify the CMA’s shift in approach. Furthermore, we underline that the CMA should block problematic mergers that distort competition where remedies are unlikely to be suitable or workable in practice.