The Competition and Markets Authority’s Call for Evidence on Merger Efficiencies

BRG professionals recently responded to the UK Competition and Markets Authority’s (CMA) call for evidence on merger efficiencies.

David Parker, Greg Wilkinson, Pratham Mishra and Wojciech Pawlak discuss rivalry‑enhancing efficiencies that mergers can generate, such as the combination of complementary assets, reductions in variable and long‑run costs and elimination of double marginalisation. These efficiencies can materially strengthen competition and benefit UK consumers.

While the CMA acknowledges such benefits in its Merger Assessment Guidelines, its approach in practice remains asymmetric: potential harms are examined extensively, whereas efficiencies typically receive limited engagement and are considered only after a provisional substantial lessening of competition (SLC) finding. This sequencing, combined with high evidentiary thresholds, means that rivalry‑enhancing efficiencies rarely influence outcomes.

The authors propose four targeted changes to the CMA’s merger control procedure and assessment to move towards a more balanced assessment framework. They believe these adjustments, taken together, would allow the CMA to more accurately assess mergers’ overall impact on competition and ensure that pro‑competitive efficiencies are given appropriate weight.