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The 31st of December 2020 saw the beginning of an important shift in the way merger transactions are carried out in the UK. Since the end of the EU's one-stop-shop principle, merger transactions can now be subject to review by both the Competition and Markets Authority (CMA) and the European Commission. 

So, has this caused a conflict or harmonious approach between the two regulators? The teams at ÀÏ˾»úÎçÒ¹¸£Àû and Caselex have examined Caselex's database of over 20,000 merger control decisions to understand the impact on the UK merger control landscape over the last two years. 

You can read the in-depth report here, or continue below for our key takeaways.

Behavioural vs structural remedies: reinforcing an old divide?

Of course, CMA scepticism around behavioural remedies is nothing new. According to CMA CEO, Sarah Cardell, there is an inherent feeling that they're inadequate and "unlikely to create the same level of pre-merger competitive intensity between the merging firms".

And, since the reforms have set in, Nicole Kar, Global Head of Antitrust at Linklaters LLP has noted in our GLP Index tracker that the CMA has been super-charged by these reforms, following a trajectory of increasing interventionism, leading her to be concerned these reforms may make the regime "too hot to handle".

The Commission's stance is notably different, in some cases considering itself almost legally obliged to accept behavioural remedies, even if they fall short of perfection.

Even when the two regulators consider like-for-like geographies, opposing attitudes to the remedial process can still mean that outcomes aren't necessarily the same. Five out of the seven divergent cases took place within the same markets.

Moral consensus doesn't always mean convergence

It's clear that the UK and EU regulators have a tendency to agree, but disagree. In the case of Microsoft/Activision Blizzard, both regulators vocalised concerns over the negative impact of Microsoft gaining exclusivity over Activision's games for its cloud gaming streaming service. 

When it came to behavioural remedies, the Commission went as far as accepting 10-year licensing commitments in order to address its competition concerns, praising the pro-competitive result.

In April 2023, the CMA prohibited the transaction, stating what was offered showed "a number of significant shortcomings connected with the growing and fast-moving nature of cloud gaming services".

It was fundamentally opposed to "behavioural commitments" replacing a "free, open and competitive market with one subject to ongoing regulation".

For a deep dive into this particular case, read MLex's real-time insights on both Microsoft's recasting and revamping of the Activision deal for the and the .

Divergent outcomes: is this really the bigger picture?

It's easy to assume that this type of remedy-based divergence has increased following Brexit. But we need to be cautious: in reality, these cases are rare, with only a limited number of parallel reviews taking place post-Brexit. Our report is very much tackling the exception, rather than the rule.

What's encouraging is that both the EU Competition Commissioner, Margrethe Vestager and Cardell have called for a formal post-Brexit cooperation agreement. If anything, there is a desire to build on their strong track record of collaboration

Could digital cases shift the landscape?

As more cases involving digital markets enter the scene, will this bring changes to traditional attitudes? Kar notes that it's new UK laws that will most likely turn the remedies dial for the CMA.

"It's likely that the advent of the Digital Markets Unit in the UK and the ex-ante digital regulation under the DMCC Bill will provide the means for behavioural remedies to be more acceptable in deals in that sector going forward."

But exactly how digital market cases will be navigated by regulators is still very much up for debate. It's clear that both regulators are struggling to fine-tune their approach under the pressure of expanding merger control frameworks.

Read the full report on merger remedies in a post-Brexit world for forecasts and speculative commentary from leading practitioners.

Dealing with a merger? Our practical considerations:

Finally, here are three of the most powerful tips from our team of researchers:

• Defining the correct remedy package is crucial: parties should avoid remedy packages that seem difficult to implement and plan to discuss them with regulators early.
  
• It's all about timing: the merger review timetables of both regulators are not aligned. With remedies accepted at different stages, planning and staggering submissions is vital.
  
• Try to facilitate cooperation between regulators: be proactive and consider the benefit of signing waivers between the regulators. This encourages alignment between the CMA and the Commission.

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"We would spend days finding the same information we can find in one hour with Caselex. It's now a lot easier to prepare for client meetings with short deadlines." 

Carine Czerwinski Dall, Senior Attorney and Knowledge Ambassador, Kromann Reumert. 

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