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What are the potential outcomes of a merger control investigation in the United Kingdom?
If the Competition and Markets Authority (CMA) concludes at Phase II that there is or will be a substantial lessening of competition, it must consider what action it should take to remedy, mitigate or prevent the substantive competition concerns created by the merger. The CMA must consider the appropriateness, effectiveness and cost of the remedies and the CMA enjoys a wide margin of appreciation in doing so. If undertakings to remedy the adverse finding cannot be agreed with the parties, the CMA will make an order imposing the remedies. All undertakings and orders are published by the CMA on its website. The range of possible remedies include:
- prohibition of a merger – in some cases this can extend to prohibiting foreign-to-foreign mergers if the parent company carries on business in the United Kingdom;
- structural remedies (eg, requiring the divestment of one or more businesses of the merging parties); and
- behavioural remedies (eg, requiring access to essential facilities or licensing, or price caps and increased transparency of prices).
The CMA does not generally favour behavioural remedies, as they require a greater level of monitoring by the CMA.
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