UK Law and Practice Contributed by: Paolo Palmigiano, Rachael Roberts, Helen Farr, Debbie Heywood and Louise Popple, Taylor Wessing LLP
If the parties choose not to notify for clearance, the CMA has up to four months from the later of completion of a non-notified merger and the time when the transaction became public to investi - gate. While considering whether to investigate an anticipated completed transaction, the CMA may make an initial enforcement order to pre - vent 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 confirms that it does not have jurisdiction. If the CMA decides to look into a non-notified transaction, it will send the acquiring party an enquiry letter requiring it to respond with details of whether one or both of the jurisdictional thresholds are met and, if so, further substantial details relating to the transaction. If the thresh - olds 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 deci - sion not to notify, they can submit what is called a “briefing paper”. This is a well-reasoned docu - ment 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 questions. This is not public, and third parties are not contacted 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 inves - tigation at a later stage – for example if new facts come to light or complaints are raised. As men - tioned 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 prohib - its 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 preven - tion, restriction or distortion of competition. All agreements that infringe Chapter 1 are void. A non-exhaustive list of prohibited behaviour, as set out in Section 2 (2) of the Act, comprises the following: • directly or indirectly fixing purchase or selling prices or any other trading conditions; • limiting or controlling production, markets, technical development or investment; • sharing markets or sources of supply; • applying dissimilar conditions to equivalent transactions with other trading parties, plac - ing them at a competitive disadvantage; and • making the conclusion of contracts subject to acceptance by the other parties of sup - plementary obligations that, by their nature or according to commercial usage, have no con - nection with the subject of such contracts. Certain agreements may be exempt from the prohibition if they contribute to improving pro -
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