ENGLAND & WALES Law and Practice Contributed by: James Ross, Paolo Palmigiano, Debbie Cloake, Helen Farr, Debbie Heywood and Louise Popple, Winston Taylor
• If UILs are offered, the CMA will begin the process of a detailed consideration of whether they are suitable. The timeframe for final determination is 50 working days from when the SLC decision was announced to the parties, with the possibility of a 40 working-day extension. • If the CMA refers to Phase 2, a more in-depth and detailed examination of the possible SLC that was identified in Phase I is undertaken. The entire process is complex and time-consuming, and the CMA has up to 24 weeks from reference (extend - able by up to eight weeks) to make a final decision. If the parties choose not to notify for clearance, the CMA has up to four months from the later of com - pletion of a non-notified merger and the time when the transaction became public to investigate. While considering whether to investigate an anticipated completed transaction, the CMA may make an initial enforcement order to prevent pre-emptive integration of the businesses or require the reversal of any action. This means that the parties are unable to begin to integrate the businesses until the CMA’s investigation is complete (and clearance obtained) or the CMA con - firms that it does not have jurisdiction. If the CMA decides to look into a non-notified transac - tion, it will send the acquirer an enquiry letter requir - ing it to respond with details of whether one or both the jurisdictional thresholds are met and, if so, further substantial details relating to the transaction. If the thresholds are met, the CMA may decide to open a merger investigation and begin the process as set out in the foregoing. If the parties believe that the transaction does not raise competition issues, or they take a decision not to notify formally, they can submit what is called a “briefing paper”. This is a well-reasoned document of around 5–6 pages explaining why the parties do not propose to submit a notification to the CMA and why there are no competition issues. If the CMA agrees with the parties’ assessment, it will usually come back stating that it has no further ques - tions. This is not public, and third parties are not con - tacted in relation to a briefing paper. A briefing paper can usually only be submitted after the transaction
documentation is signed, and the CMA usually gives a response within a couple of weeks. There are no filing fees. If the response is positive, and the CMA does not call in the transaction for a Phase 1 review, this gives some comfort to the parties, although the CMA reserves the right to open a Phase 1 investigation at a later stage – eg, if new facts come to light or complaints are raised. As mentioned in the foregoing, the CMA can open an investigation, even after a briefing paper, within four months of the deal being made public. 6.3 Cartels Chapter 1 of the Competition Act 1998 prohibits agreements between undertakings, decisions by associations of undertakings, and concerted practices that may affect trade within the UK and have as their object or effect the prevention, restriction or distortion of competition. All agreements that infringe Chapter 1 are void. Section 2 (2) of the Act sets out a non-exhaustive list of prohibited behaviour, comprising the following: • directly or indirectly fixing purchase or selling prices or any other trading conditions; • limiting or controlling production, markets, techni - cal development or investment; • sharing markets or sources of supply; • applying dissimilar conditions to equivalent trans - actions with other trading parties, placing them at a competitive disadvantage; and • making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such contracts. Certain agreements may be exempt from the prohi - bition if they contribute to improving production or distribution, or promoting technical or economic pro - gress, while allowing consumers a fair share of the resulting benefits. However, these agreements must not: • impose restrictions that are not indispensable to the attainment of these objectives; or
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