OFT merger shock - confidential guidance and informal advice

The Office of Fair Trading has made a surprise announcement that it has suspended until further notice the provision of confidential guidance or informal advice to parties considering a merger. OFT Chairman Philip Collins stated on 1 December 2005 that the decision is due, at least in part, to "heightened expectations at a time of increased caseload."

Under both confidential guidance and informal advice, the OFT would give a view on whether it would be likely to refer a particular transaction to the Competition Commission (CC) for in- depth review. Confidential guidance was the more formal procedure. Both procedures take place before the particular transaction is in the public domain. This means the OFT would give its view before it could know the views of third parties, such as the merging parties’ customers or consumers. Recent appeals on OFT merger decisions have emphasised the importance of the OFT taking into account third party comment in its merger decision making process.