By Louis Goss
The UK’s competition watchdog is taking an increasingly interventionist approach to regulating mergers, new figures from Fieldfisher show.
The UK’s Competition and Markets Authority (CMA) launched 63 per cent more Phase 1 merger investigations in the financial year ending on 31 March 2022, than in the previous financial year.
At the same time, the UK’s CMA has failed to clear a single transaction at Phase 1, without conditions, since 1 April 2022.
John Cassels, co-head of Fieldfisher’s regulatory group, said the uptick in enforcement activity is the result of the CMA taking a more interventionist approach, after being handed greater powers following the UK’s exit from the European Union.
The competition watchdog has in turn taken a tough stance since its regulatory powers were bolstered in January 2021, by the UK-EU Brexit deal.
Cassels explained that the CMA is taking an increasingly “interventionist” approach towards mergers, with a view to creating greater competition in the market.
The CMA’s more active position comes amid growing scepticism around arguments around the potential “efficiency” benefits mergers might deliver.
“We’re in a stricter enforcement environment,” Cassels said.
He explained that competition regulators generally, and the CMA more specifically, are taking more interventionist positions in favour of “good behaviour” over efficiency, .
A surge in dealmaking activity, as a result of the economic chaos wrought by Covid-19, also drove the uptick in investigations, as the CMA simply had a greater number of mergers and acquisitions to investigate.
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