By Edith Hancock
The U.K.'s Competition and Markets Authority plans to review how it inspects big mergers and whether more can be cleared without forcing businesses to sell assets.
The agency will start exploring its own merger policy next year, Sarah Cardell, the CMA's chief executive, said Thursday.
The CMA's merger investigations, and in particular its review of Microsoft's $75 billion takeover of videogame company and "Call of Duty" creator Activision Blizzard, have pushed the regulator into the spotlight in recent years.
The review will look at when so-called behavioral remedies, which can involve price freezes or committing to keep running certain services, might be appropriate for a deal to ease the regulator's concerns and to move faster to discussions on remedies, Cardell said.
Regulators are typically more skeptical of behavioral remedies compared with more traditional concessions, such as selling off whole parts of a merged business.
The regulator said it would also set up a new outreach program to hear more feedback from investors and startups on its deal reviews.
The CMA has faced criticism in recent years over how it handles high-profile merger reviews, with U.K. Prime Minister Keir Starmer saying a month ago that the country's regulators need to prioritize economic growth.
"We take seriously any concerns that the way in which the regime is applied could chill investment," Cardell said. "This is a unique moment to deliver a new regime that is targeted on driving benefits for the U.K. economy."
Microsoft's President Brad Smith criticized the CMA in 2023 when it originally vetoed the Activision deal, saying his confidence in the U.K. had been severely shaken.
The U.S. tech giant eventually got the takeover cleared by restructuring its deal with Activision and selling the publisher's cloud gaming rights to France's Ubisoft. In January, Smith said the probe had been tough and fair.
The CMA is set to decide on a Vodafone deal with CK Hutchinson's Three in the coming weeks. The authority earlier this month said its competition concerns could be addressed after the companies pledged to spend roughly 11 billion pounds ($13.9 billion) upgrading the merged group's U.K. mobile network and committing to certain contract terms with consumers and wholesale providers.
That plan has also worried some telecommunications companies that warned the CMA is taking a risk by accepting those behavioral remedies.
Where it is possible to use remedies to preserve competition while delivering benefits from growth and from investment in infrastructure or technology, the CMA should do that, Cardell said.
"That doesn't mean we should lower the bar to allow any anti-competitive merger to get through because there's a sort of half baked remedy in place, but we absolutely should be straining every sinew to test whether there is an effective remedy that can deliver those benefits," she said.
Plans for a review of the U.K.'s merger policy come after the country's financial regulator, the Financial Conduct Authority, in July simplified listing rules to encourage more companies to float in London after a string of defections from the City bourse. The overhaul, the biggest in more than three decades, sought to align the U.K. with international market standards.
Write to Edith Hancock at edith.hancock@wsj.com
(END) Dow Jones Newswires
November 21, 2024 07:08 ET (12:08 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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