CMA reconsiders approach to merger remedies and publishes Mergers Charter

On 12 March 2025, the Competition and Markets Authority (CMA) launched a formal review (Call for Evidence) of its approach to remedies in merger cases. In particular, the CMA is considering the effective use of behavioural remedies, how to ensure the efficiency and speed of the remedies review process and the preservation of pro-competitive merger efficiencies and merger benefits. 

On the same day, the CMA also published its Mergers Charter which sets out principles and expectations for how the CMA and businesses and their advisers will engage with each other during merger investigations. 

The Government subsequently announced on 17 March 2025 that it will be consulting on legislative reform proposals with the aim of "addressing uncertainty with the existing Share of Supply and material influence tests".

What you need to know

• Both of these developments stem from the CMA's ongoing commitment to attracting UK growth and investment by improving the way that UK merger control operates, following recent criticism from Government and business. They entrench the CMA's focus on the "4Ps" framework set out by its CEO: pace, predictability, proportionality and process.
• The merger remedies review is a further indication of the CMA's move away from its strong preference for structural remedies over behavioural remedies.
• The deadline for responding to the Call for Evidence is 12 May 2025.
• Further changes are being considered in respect of the share of supply and material influence tests.

The CMA's contribution to the UK growth agenda

These announcements form part of the recent shift by the CMA to demonstrating a more pragmatic and flexible approach to reviewing merger cases, with the aim of supporting the UK's wider growth agenda. In November 2024, responding to pressure from Government, Sarah Cardell (the CMA's Chief Executive) delivered a speech focusing on how the CMA will contribute to driving UK growth. She stated that, "every deal that is capable of being cleared either unconditionally or with effective remedies should be", and that only truly problematic mergers should be blocked (i.e. where the harms cannot be addressed effectively through remedies).  

In February 2025, the UK Government published its draft strategic steer to the CMA to support growth and investment. This led to the CMA reiterating its 4Ps framework (pace, predictability, proportionality and process), and emphasising that it is committed to "rapid, meaningful change based on these principles, starting with the mergers process" which it recognises as a "particularly critical area for investment, including inward investment to the UK".

CMA's merger remedies review

The CMA's previous approach to merger remedies

During her November 2024 speech, Cardell announced the CMA's intention to review its merger remedies process and in particular to  when behavioural remedies may be appropriate. Historically, the CMA has preferred to use structural remedies (i.e. divesting businesses or substantial part(s) of them) rather than behavioural remedies (i.e. remedies aimed at future conduct). This is because structural remedies generally offer simpler solutions which remove the anti-competitive overlap outright and do not require ongoing monitoring. 

However, this approach has become increasingly out of line with other competition regulators' more flexible approaches. For example, in August 2023, the CMA blocked the Microsoft / Activision Blizzard merger and rejected behavioural remedies offered by the parties. This was in contrast to the European Commission, which had cleared the merger subject to the parties' proposed behavioural remedies. The parties filed a restructured deal with the CMA (providing for the sale of Activision's cloud streaming rights to Ubisoft) which was cleared in October 2023.

Interestingly, in December 2024, the CMA cleared the Vodafone / Three mobile merger at phase 2, subject to behavioural remedies to invest in their combined 5G network and short term commitments on certain prices and commercial terms. This marked a departure from the CMA's historic preference for structural over behavioural remedies, although the CMA was keen to emphasise the role of Ofcom (as the sector regulator) in assisting with the ongoing monitoring of the remedies imposed. 

Launch of the merger remedies review 

Against this backdrop, the CMA launched its merger remedies review on 12 March 2025. Alongside the Call for Evidence, the CMA will carry out other outreach and roundtable sessions with interested parties.

The Call for Evidence sets out that the CMA has reviewed more than 3,000 mergers (both formally and informally) since January 2021, resulting in:

• 171 phase 1 investigations (of which 31 had remedies accepted at phase 1);
• 33 phase 2 referrals (of which nine were cleared unconditionally, nine were cleared with remedies, seven were prohibited, five were abandoned and three are ongoing (one of these has been cleared since the Call for Evidence was drafted (see our March 2025 update)).

The remedy process represents an important part of the CMA's toolbox in merger cases, with 40 of 171 formal investigations resulting in remedies. 

In the Call for Evidence, the CMA is seeking views on three broad themes: (i) the CMA's approach to remedies; (ii) preserving pro-competitive merger efficiencies and merger benefits; and (iii) running an efficient process. Specifically, the CMA is looking to gather feedback on:

• the circumstances in which the CMA could move away from using structural rather than behavioural remedies. While recognising its historic preference for structural remedies, the CMA notes that there are situations where behavioural remedies can work well – citing the recent cases of Microsoft / Activision Blizzard and Vodafone / Three. The CMA is seeking input on when behavioural remedies can work particularly well (e.g. based on the type of competition concern identified, the presence of a sector regulator or market-specific regulatory framework, the extent to which ongoing remedy monitoring is required, etc.) and how to test the effectiveness of these remedies.
• how the CMA can effectively design, monitor and enforce behavioural remedies, e.g. by drawing on sectoral regulator expertise.
• how the CMA can use the phase 1 process to assess more complex remedies, rather than requiring a phase 2 reference which involves a more costly, lengthy and detailed review, to ensure the proportionality of the CMA's merger review.
• how remedies can be used to preserve both pro-competitive efficiencies and relevant customer benefits arising from a merger.
• how the CMA can make the remedies process more efficient, including by taking account of parallel actions of other competition authorities.

Following the Call for Evidence, the CMA plans to consult on specific proposals for changes to its merger remedies approach in early autumn 2025, with a view to implementing any changes by the end of the year.

Release of the Mergers Charter

The CMA has also issued a new Mergers Charter which provides an overview of the CMA's principles and expectations for engaging with businesses and their advisers during merger reviews. The CMA's Executive Director for Mergers, Joel Bamford, explained that the Charter "is a statement of clear intent that the CMA is fully committed to engaging directly with businesses … on our processes and the outcomes these generate". The Charter entrenches the CMA's 4Ps framework in its approach to mergers:

• Pace: The CMA will conduct reviews efficiently and in a targeted and streamlined manner, aiming to focus rapidly on key potential competition issues while dropping lines of inquiry where there are no clear concerns.
• Predictability: The CMA will aim to provide greater certainty on which deals it is likely to review, providing regular updates to businesses if a review is started.
• Proportionality: The CMA will take a proportionate approach to minimise the burden on businesses that may come under review, including: over which deals it calls in, prioritisation of the concerns for investigation, the scope of information requests and the design of remedies.
• Process: The CMA wants to ensure direct, helpful and constructive engagement with businesses during reviews.

Whilst the Charter seeks to promote a more open and transparent approach to engagement with businesses, the CMA also emphases that successful outcomes will also require businesses and their  advisers to engage constructively with the CMA. The CMA notes that it expects businesses, including senior personnel, to engage directly with the CMA where possible, and that advisers should provide and facilitate constructive and timely engagement with the CMA at all times. 

The Charter will be supported by additional guidance which the CMA will publish at a later date.  

Further changes being considered to limit the CMA's jurisdiction

The UK voluntary filing regime provides the CMA with significant jurisdictional flexibility, in particular in assessing whether the transaction gives rise to material influence and in determining whether the share of supply test has been met. This flexibility has given the CMA considerable discretion in deciding whether to intervene in mergers, which, alongside its approach to remedies, has led to much of the recent debate over the CMA's approach. 

The role of these two tests was called out by Sarah Cardell in February 2025 in the context of applying the 4Ps framework and specifically 'predictability'.  Ms Cardell noted that the CMA has "unusually broad jurisdiction by international standards" which can "create uncertainty over whether we will review a particular deal or not". At that time, Ms Cardell announced that the CMA would be consulting in June 2025 on updated guidance on how it applies and interprets those tests, to "clarify and delineate our remit (as far as legally possible)." 

It is therefore interesting that the Government announced on 17 March 2025 that it will be consulting in the coming months on "legislative reform proposals where the Government can take action to improve the pace, predictability and proportionality of the UK's competition regimes. This consultation will include proposals to provide more certainty on where mergers will be subject to investigation in the UK by addressing uncertainty with the existing Share of Supply and material influence tests". 

Authors: Louisa Denison, Associate