By John Colahan, Jonathan Parker and Calum Warren

On 16 June 2017, following a public consultation on proposed changes, the UK Competition and Markets Authority (CMA) published the “Mergers: Exception to the duty to refer in markets of insufficient importance” guidance, which increases the thresholds for the application of the CMA’s so-called “de minimis” (or small markets) exception. Of lesser significance, the CMA’s updated de minimis guidance also incorporates a number of other minor textual clarifications and now includes references to the CMA’s more recent decisional practice and other guidance.

By way of background, the CMA has a duty to refer a merger to an in-depth Phase 2 investigation under section 22 or 33 of the UK Enterprise Act 2002 if it believes there may be a realistic prospect that the merger will result in a significant lessening of competition. In accordance with the current guidance contained in the CMA’s “Mergers: Exceptions to the duty to refer and undertakings in lieu of reference guidance”, the CMA may apply the de minimis exception to the duty to refer if the aggregate size of the market(s) concerned are below certain specified thresholds. The current thresholds are set at £10 million below which the CMA may apply its de minimis exception, and £3 million below which the CMA generally will not consider a reference to a Phase 2 investigation justified.