The Office of Fair Trading and the Competition Commission (the "authorities") have published for consultation a second draft of their new joint merger assessment guidelines. The authorities originally decided in 2008 that their respective guidelines on the substantive assessment of mergers needed to be updated to reflect recent experience and developments in thinking and commissioned a joint review. The aim is to establish a single coherent guide on the substantive assessment of UK mergers, albeit reflecting the different roles of the two bodies.
An initial consultation on the draft guidelines took place during 2009, as reported in issue 422 of Community Week. Since then the draft has altered considerably, resulting in this second consultation. The changes have largely been driven by comments arising from the first consultation.
In particular, the provisions relating to market definition and non-horizontal mergers have been redrafted. There were concerns that the authorities had overly downplayed the importance of market definition in the first draft. Having developed their thinking, the authorities now make it clear that market definition remains an important analytical tool in the merger assessment process, albeit not an end in itself. The draft elaborates that market definition may be used for two key purposes, namely providing an analytical framework for assessing the competitive effects of the merger and, secondly, for measuring and evaluating market concentration.
The provisions relating to non-horizontal mergers have been also redrafted in order that they are more clearly aligned with the equivalent guidelines from the European Commission. The authorities did not consider that there was any material difference in approach between them and the European Commission, but wanted to ensure this was clear from the face of the guidelines.
Further amendments have been made to the sections pertaining to theories of harm, counterfactuals and horizontal coordinated effects.
Comments on the second draft have been requested by 31 May 2010.
To view Community Week, Issue 468 - 23 April 2010 in full, click here.
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