In 2019, the CMA devoted considerable resources to preparing for the UK’s exit from the EU. It carried out a consultation and published guidance on the functions of the CMA after a ‘no deal’ exit from the EU. In anticipation of its increased workload, it recruited additional staff at all seniority levels and completed its move to new premises in Canary Wharf. It also increased its focus on digital markets and took a less permissive approach to gun-jumping and failures to provide full responses to formal requests for information.
The CMA continued its efforts to enforce competition law on a business-as-usual basis, increasing its antitrust activity compared to the previous year. In 2019, the CMA issued:
- Four Chapter 1 infringement decisions, compared with two in 2018;
- No Chapter 2 infringement decisions, as in 2018;
- Two decisions closing a case with no infringement finding, compared with one in 2018; and
The CMA adopted a more interventionist approach towards mergers in 2019 compared with 2018 as well. At Phase 1, the proportion of cases cleared unconditionally in 2019 (61%) was lower than in 2018 (72%). It also referred 15 mergers to Phase 2, representing a 50% increase on the previous year.
At Phase 2, three out of 10 cases were unconditionally cleared in 2019, compared with two out of eight cases in 2018. The proportion of transactions that were effectively blocked increased sharply: six out of 10 mergers subject to Phase 2 review were prohibited (or abandoned followed provisional prohibitions) in 2019, compared with two out of eight transactions in 2018.
According to its draft annual plan for this year, the CMA entered 2020 carrying an unprecedented number of Phase 2 merger investigations, as well as a record-level competition law enforcement caseload. At the time of publishing, the CMA has five ongoing Phase 2 merger investigations, 15 competition enforcement cases, one market study, and one market investigation. In addition, the concurrent sector regulators have a number of ongoing Competition Act enforcement cases, covering business parcel delivery (Ofcom), electronic communication equipment (Ofcom), digital smart meters (Ofwat), wholesale energy trading (Ofgem), as well as a number of market studies.
Focus on Digital Markets
Consistent with its 2019 objective of promoting better competition in online markets, the CMA launched its Digital Markets Strategy in July 2019. This was a response to what the CMA sees as “profound changes being brought about by the digital economy,” requiring competition authorities to “develop a path that protects consumers while ensuring robust competitive and innovative digital markets.” The CMA sought to tackle questions around companies’ use of data, whether certain platforms have market power or ‘gatekeeper’ status, the use of increasingly sophisticated technology to target advertising, and the risk of ‘killer acquisitions’. The CMA set out several priority areas, including: (i) a market study on online platforms and digital advertising (also launched in July 2019), (ii) a review of the CMA’s approach to reviewing digital mergers, (iii) policy work to consider a possible ‘digital markets unit’, (iv) proposals to reform interim measures and other enforcement tools to enable swifter action, and (v) cooperation with international agencies.
On 18 December 2019, the CMA published its interim report on online platforms and digital advertising. Although it is not currently minded to make a market investigation reference, it is considering a range of recommendations to improve competition in the sector, including an enforceable code of conduct, rules to improve transparency and give users greater control over their data, and requirements on Google and Facebook to provide data access and interoperability to rivals. The CMA is required to publish its final Market Study Report by 2 July 2020.
Increased Public Interest Interventions
In 2019, the Government intervened in five transactions on public interest grounds, the most interventions in a single year since the Enterprise Act 2002 came into force. The first of these was in relation to acquisitions by the same Saudi investor of 30% stakes in Lebedev Holdings (the majority owner of the Evening Standard newspaper) and Independent Digital News and Media (a provider of media content to independent.co.uk). The Secretary of State issued a PIIN on media plurality grounds due to concerns over editorial independence, freedom of expression, and accurate news reporting. In a judgment clarifying the statutory provisions governing public interest merger cases, the CAT ruled that the Secretary of State was time-barred from referring the case to Phase 2. The four other interventions involved the proposed acquisitions of Britain’s largest satellite company, of two UK-based aerospace and defence manufacturers, and of a UK supplier of precision- forged and machined components, all on national security grounds.
The increase in public interest interventions in the UK is consistent with a broader political interest around the world in merger control, as demonstrated by the introduction of many new foreign direct investment regimes, the strengthening of exiting regimes, and a greater willingness on the part of politicians to comment on mergers. The UK Government’s reaction may also reflect increased foreign investment in UK companies. Indeed, the circumstances surrounding the interventions in 2019 are not dissimilar to those made in previous years.
Renewed focus on individual responsibility
In February 2019, the CMA issued new guidance on directors’ competition disqualification orders (“CDOs”). The new guidance aimed to make it easier for the CMA to secure director disqualification in competition cases, by simplifying the application procedure and creating greater incentives for directors to offer undertakings rather than face an application to Court. Following the publication of this guidance, the CMA pursued a series of director disqualification cases:
- On 26 April 2019, the CMA secured disqualification undertakings from two directors of concrete drainage maker CPM Group following CPM’s admission that it breached competition law through price fixing and market sharing. The two directors are prohibited from being involved in managing any company based in the UK for seven and a half years and six and a half years, respectively.
- On 29 April 2019, the CMA accepted a competition disqualification undertaking from a former director of Saxons PS Limited following the CMA’s decision that six estate agencies fixed commission fees for residential sales in Burnham-on-Sea. The former director undertook not to be involved in the management of any UK company for five years. This follows undertakings given by two directors of CPM Group Limited in 2018 relating to the same investigation.
- On 10 May 2019, the CMA secured the disqualification of three directors following its finding of an infringement in relation to cover bidding in the supply of design, construction, and fit-out services in the The three directors undertook not to be involved in the management any UK company for five years, two and a half years, and two years, respectively.
These cases can be seen as part of a broader trend towards sanctioning individuals in an effort to achieve deterrence with competition rules. Lord Tyrie, in a February 2019 letter to the Government, called for more individual responsibility in competition law enforcement, and suggested that CDOs should also be extended to consumer enforcement.
Penalties for failure to respond to information requests
In 2019, the CMA increased its enforcement activity in relation to failures to respond to formal information requests. The CMA found infringements in AL-KO Kober/Bankside Patterson, Rentokil/MPCL, Sabre/Farelogix, all for failure to provide full responses to information requests by the CMA’s deadline. The CMA considered that, in each of these cases, there was a pattern of non-compliance by the relevant companies that merited imposing fines ranging from £15,000 to £27,000. This represents as sharp increase in enforcement cases relative to 2018, where the CMA did not find any such infringements.
This increase in enforcement cases comes on the back of the CMA’s guidance published in January 2019 on requests for internal documents in merger investigations. The guidance states that the CMA intends shifting from making informal requests to using s.109 notices, which compel companies to respond within a prescribed deadline. It also clarifies the likely scope of information requests in merger investigations, including that the CMA may—at any stage of the investigation—request any document in the merging parties’ possession that has been prepared, sent, or received by an officer or employee (including emails, internal analysis, instant messages, and handwritten notes). In 2019, the CMA issued increasingly burdensome document requests at early stages of its merger investigations, often extending to thousands of pages.
Guidance on merger remedies
In June 2019, the CMA published its Merger Remedy Evaluations Report, part of a series of case evaluations conducted to develop the CMA’s expertise, policy, and practice on merger remedies. The Report notes that its findings will be “used to inform the way in which the CMA approaches remedy design and implementation in subsequent cases.” It contains guidance on the types of remedies that the CMA is prepared to accept or may require. It confirms that structural remedies are generally preferred, and identifies lessons for the CMA, such as requiring “crown jewel” fall- back remedies where there are doubts about the viability of a package, carrying out more thorough purchaser approval processes, and sticking to clearly-defined timetables for divestitures. It also found that behavioural remedies could be acceptable, particularly in slow-moving and regulated industries, and encourages the CMA to make greater use of interim measures—such as hold-separate orders—to ensure that remedies can be implemented if needed later on. The CMA’s consistent use of initial enforcement orders throughout 2019 suggests that it has taken on board this recommendation.
Expectations for 2020
As the CMA prepares for its new role as an independent global enforcer with expanded jurisdiction, to review transactions and conduct investigations in parallel with the European Commission, we expect that it will continue to strengthen its procedures and take a more interventionist approach in its assessment of mergers and antitrust cases. We expect that much of its energy will be devoted to strengthening its merger control regime, given the expectated 50% increase in the number of merger cases from January 2021, many of which will be much larger mergers than the CMA has historically reviewed.
We also expect a sharp focus on digital markets. Authorities around the world have recognised the importance of coordinating their approach to these issues. In Germany, for example, the Ministry of Economics published its draft 10th amendment to the German Competition Act in 2019, which includes new requirements for companies with “paramount significance for competition across markets”. These are similar to some of the CMA’s proposed requirements for companies with “strategic market status” in the UK, as well as those set out in the European Commission’s European Strategy for Data. We expect the CMA to continue working with international regulators to develop ex ante regulation to promote competition in digital markets.
 The statistics presented in this briefing measure the CMA’s activity between January and December 2019. This differs from the CMA’s official annual statistics, which are compiled on the basis of its financial year (starting on April of each year).
 See The CMA’s Digital Market Strategy Policy Paper, 3 July 2019
 Lebedev Holdings Limited and another v Secretary of State for Digital, Culture, Media and Sport
 See, e.g., Federal Ministry for Economic Affairs and Energy, Altmaier and Le Maire adopt joint Franco-German Manifesto on Industrial Policy, 19 February 2019. See also N. Levy, D. Little and H. Mostyn, European Champions: Why politics should stay out of EU merger control, Concurrences, 2019
 CMA 100, Guidance on requests for internal documents in merger investigations, paragraph 16: “The CMA’s practice in relation to whether to request internal documents using informal or statutory requests has varied in previous investigations. To support the CMA’s ability to carry out its statutory functions, which is dependent, in large part, on being able to rely on the accuracy and comprehensiveness of merging parties’ submissions, the CMA is likely to use section 109 notices as standard in future investigations where internal documents are requested from main parties in both Phase 1 and Phase 2 merger investigations”