1. Summary
A new strategic steer[1] published by the UK Government for consultation on 13th February 2025 seeks to change the CMA’s direction, focusing on growth and promoting investment in the UK via a series of measures aimed at fostering more reasonable and pragmatic merger intervention. This comes as part of a wider push by the UK Government for regulators to support its economic growth agenda. The steer makes clear that the CMA is expected to contribute to this agenda by enhancing “the attractiveness of the UK as a destination for international investment”.
It can be expected that, as a result of the steer, the CMA will be less likely to prohibit global deals which have no particular effect on UK competition and more likely to accept remedies to perceived competition concerns, especially if they have been accepted by other competition authorities which are also reviewing the deal. It is also to be hoped that the CMA’s jurisdictional tests will be clarified, to the benefit of legal certainty, and its reviews will be quicker and more streamlined.
2. The 4Ps Approach
In a blog post published the same day, the CMA’s CEO, Sarah Cardell, set out the CMA’s ‘4Ps’ approach to “rapid, meaningful change”, noting that these factors matter to perceptions of the UK as a place for international investment.[2]
Pace
The CMA aims to produce faster decisions on mergers to reduce uncertainty and costs for businesses. This will involve minimising in-depth reviews. By June 2025, the CMA has committed to:
- Completing the pre-notification phase within 40 working days (down from an average of 65 working days)
- Reducing the target clearance period for straightforward Phase 1 cases from 35 to 25 working days.
To achieve this, the CMA will prioritise potential issues earlier in the process and publish shorter decisions.
Predictability
Sarah Cardell’s blog post acknowledges the uncertainty created by a voluntary regime under which the CMA may also ‘call in’ deals, accepting that this gives the CMA an “unusually broad jurisdiction”. The CMA has committed to clarifying its remit by updating CMA guidance on how it interprets and applies two key tests that determine whether or not the CMA has jurisdiction: the concept of ‘material influence’, which the CMA accepts is a low threshold by international standards, and the share of supply test, which is loosely defined in legislation and therefore gives the CMA broad jurisdiction to review transactions. Additional guidance on how these tests will be interpreted and applied will provide more certainty about which deals are likely to attract CMA attention. The updated guidance will be issued for consultation in June of this year.
Proportionality
The CMA says that its aim is to clear as many deals as possible, with effective remedies if required, rather than prohibiting them. The Government’s strategic steer states that, when considering remedies, the CMA must have regard to:
- Prioritising pro-growth and pro-investment interventions,
- Focusing on markets and harms that particularly affect UK-based consumers and businesses, and
- Supporting growth and international competitiveness in the industrial strategy’s 8 key sectors.[3]
In March, the CMA begins a review of its approach to remedies, particularly looking at how to strike the right balance between different types of remedies. The CMA will consider the potential for deals that deliver pro-competitive investment benefits, and cited its recent treatment of Vodafone/Three as an example.[4]
The CMA acknowledges the importance to investor confidence of taking a proportionate approach to global deals, which could signal that such transactions will be looked upon more favourably going forward. Moreover, although the CMA says it remains committed to upholding its duty to protect UK consumers and businesses, it will carefully explore how to better identify deals whose UK impact is “distinct and direct”, as opposed to those where action by other international competition authorities might be more appropriate.
Process
The steer seeks to minimise uncertainty by providing greater transparency in the CMA’s activities, including encouraging the CMA to review its procedural guidance and practice to make it “accessible and meaningful to business”.
In response, the CMA will publish a new 'Mergers Charter’ in March, which aims to improve engagement with businesses and investors. This includes a targeted outreach programme, more senior meetings early in the review process, and the production of accessible and business-friendly materials.
There will also be an impetus to demonstrate via evidence how the CMA’s efforts to improve competition have improved consumer outcomes and promoted economic growth. The Government’s strategic steer specifically notes the need for the CMA to “demonstrate its impact on the UK economy” via a contemporary evidence base, suggesting that there will be pressure on the CMA to justify its existence in its current form.
3. Government engagement and accountability
The steer states that the CMA is expected to collaborate with the Government to identify how the authority can support the government’s wider mission for economic growth. Similarly, it must engage with stakeholders (including both businesses and consumers) for regular feedback and publish the results in terms of impact on CMA decision-making, commercial awareness, transparency and stakeholder engagement. This requirement will be reflected in an amendment to the CMA framework agreement.
In turn, the Government has committed to supporting the CMA to deliver on the strategic steer, and has said it will issue an official response to CMA recommendations under its markets tool within 90 days, with a presumption of acceptance unless there are compelling policy reasons not to do so.
However, the CMA is accountable for enacting the steer, which makes clear that the government expects the CMA to report on how it has been applied in the CMA’s annual report.
4. Next steps
Over the next few months, the CMA will look towards making a ‘step change’ in the operation of its mergers regime, and Sarah Cardell’s blog post commits to expanding the 4Ps framework across all the CMA’s operations.
The strategic steer is open for consultation until 9.30am on 6 March 2025.
[1] See the Government’s Draft Strategic Steer here.
[2] See Sarah Cardell’s blog post on the CMA website here.
[3] See Invest 2035: The UK’s modern industrial strategy, published here. The eight key sectors are: advanced manufacturing, clean energy industries, creative industries, defence
digital and technologies, financial services, life sciences, professional and business services.
[4] The transaction was cleared with commitments in December 2024. See the CMA’s case page here.
