Although the number of challenges to merger decisions is low, the jurisprudence of the Competition Appeal Tribunal (CAT) and the Court of Appeal has contributed significantly to the United Kingdom's administrative system of merger control. This article outlines the structure of merger control in the United Kingdom, including the jurisdiction, functions, procedures, and responsibilities of the Office of Fair Trading and the Competition Commission, as well as the application of the substantive "substantial lessening of competition" test. It also summarizes the specific assessment of the limited number of mergers that may raise public interest issues. This article then examines in detail the judicial supervision by the CAT and Court of Appeal, the nature of judicial review, and an in-depth assessment of key judgments in merger cases.
KEY WORDS: Merger control, Enterprise Act 2002, merger litigation, Competition Appeal Tribunal, judicial review, United Kingdom
In common with the systems of merger control in the European Union (EU) and most EU Member States, merger control in the United Kingdom is an administrative process undertaken by specialist independent agencies, the Office of Fair Trading (OFT), and the Competition Commission, under the judicial supervision of a specialist tribunal, the Competition Appeal Tribunal (CAT). The CAT does not itself make decisions on mergers, but reviews the legality of decisions made by the OFT and Competition Commission in applying the mergers provisions of the Enterprise Act 2002 (the Enterprise Act). (1) When it entered into force in 2003, the Enterprise Act made significant changes, both substantive and procedural, to merger control in the United Kingdom. (2)
In this article, we will examine how merger litigation has contributed to the development of both the procedural and substantive aspects of merger control in the United Kingdom. We will also examine the procedural aspects of merger litigation before the CAT.
The OFT is a first-stage review agency. Under the Enterprise Act, there is no obligation to notify a merger to the OFT, or to await approval before implementing a merger. However, in practice, many mergers are notified on a voluntary basis and the OFT has powers and indeed a duty to investigate mergers that are not notified to it, including mergers that have already been consummated. If the OFT believes that a merger may result in a substantial lessening of competition, it will (unless it accepts appropriate remedies) refer it to the Competition Commission for a second stage in-depth investigation. If the Competition Commission finds that a merger will substantially lessen competition, it will either impose remedies or prohibit the merger; this can include ordering the unwinding of a merger that has already been consummated. The United Kingdom government has announced plans to merge the OFT and Competition Commission into a single antitrust agency, the Competition and Markets Authority (CMA). These changes are expected to take full effect by April 2014, although the two-stage system of merger review will be retained.
Appeals from decisions of the OFT and Competition Commission are heard by the CAT. With leave, further...