UK Law and Practice Contributed by: Alex Stratakis and Marc Freedman, Van Bael & Bellis
As pre-notification is not part of the formal pro - cess, it has no fixed timeline and, in certain cases, can last for several months (and may vary significantly, depending on the nature and/ or complexity of a given case). The case team will often wish to ensure that it has a thorough understanding of the markets and competitive issues involved in a transaction before the clock officially starts. Therefore, the CMA may begin informal market testing if the parties have already made the transaction public. Despite this, all pre-notification discussions are confidential. 3.10 Requests for Information During the Review Process In addition to the extensive information provided at the filing stage (see 3.5 Information Included in a Filing ), it is common for the CMA to request further information from the parties. These detailed requests may arise due to competi - tion concerns raised by interested third parties in relation to the transaction or where complex issues require further investigation (eg, a trans - action is referred for a Phase 2 review). 3.11 Accelerated Procedure There is no official accelerated procedure under the UK merger control regime. However, parties may submit a request to the CMA to fast-track its review from a Phase 1 investigation to either a consideration of UILs or a Phase 2 investiga - tion; in the latter scenario, the 24-week Phase 2 deadline may be extended once, by a period of up to 11 weeks, if the CMA considers that there are special reasons to do so. If there are other timing constraints due to the fact that a transaction is subject to other regu - latory procedures (eg, filings in other jurisdic - tions), the parties may inform the CMA and request that it exercise its discretion to come to a decision earlier than the statutory deadline.
Such requests will be assessed by the CMA on a case-by-case basis.
4. Substance of the Review 4.1 Substantive Test
The substantive test is whether a relevant merg - er situation has resulted or may be expected to result in a “substantial lessening of competition” (SLC) in one or more markets within the UK. • At Phase 1, the legal standard is met if the CMA forms a reasonable belief that there is a realistic prospect of an SLC in light of the relevant facts of the case. • At Phase 2, the legal standard is an assess - ment on the balance of probabilities (ie, an SLC is more likely than not). What constitutes “substantial” in the context of the SLC test will be determined by the CMA on a case-by-case basis. Notably, the CMA does not apply market share or concentration thresh - olds to assess whether a loss of competition is substantial. If, on the basis of its review, the CMA determines that a transaction is likely to result in an SLC (meaning a 50% or more likelihood), it must refer the transaction for a Phase 2 review. If the likeli - hood of a transaction resulting in an SLC is less than 50% but is still a distinct possibility, the CMA must exercise its discretion as to whether a Phase 2 reference is required. At Phase 2, if the CMA establishes – on the balance of probabilities – that the transaction has resulted, or may be expected to result, in an SLC, it must decide whether the SLC or any resulting adverse effect(s) should be remedied, mitigated or prevented.
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