Overview
Under the UK's merger control regime, there is no obligation to notify mergers to the Competition and Markets Authority (CMA). However, where merger parties wish to formally notify a merger, there is a duty for them to make full and accurate disclosures of all relevant information.
Information requested in a Merger Notice, which is the form for businesses to use to notify the CMA of an anticipated or completed merger, includes details of the merger parties' businesses, finances, operations and any other relevant information. The CMA will also typically issue information requests, including request notices under section 109 of the Enterprise Act 2002 (Section 109 Notices), to the merger parties to complete the Merger Notice to ensure it has sufficient information to commence its investigation.
Even after the CMA has accepted a Merger Notice, it can at any time during the 40-working day initial review period, reject the Merger Notice if it suspects information submitted to be false or misleading or if the merger parties either fail to provide information, which should in fact have been included in the Merger Notice or fail to provide requested information on time without reasonable excuse.
In respect to information requests, including Section 109 Notices, it is a criminal offence to provide, intentionally or recklessly, false or misleading information to the CMA. Criminal sanctions include imprisonment for up to two years, a fine or both. The CMA may also impose an administrative fine, which may be of a fixed amount or calculated by reference to a daily rate. The amount of the fine is determined by the CMA, up to a maximum of £15,000 per day or £30,000 for a fixed amount. The CMA has exercised some of its powers.
In addition, the CMA has the power to suspend the statutory timetables for reviewing mergers where information required under a Section 109 Notice is not provided by a relevant person or is found to be false or misleading.
Below are some of the most recent penalty decisions where fines were imposed on the parties.
- On August 11, 2023, the CMA announced that it had imposed a penalty of £25,000 on Copart in relation to its acquisition of Hills Motors for failing, without reasonable excuse, to comply with Section 109 Notices during its Phase 2 investigation. In particular, Copart failed to provide the CMA with more than 50 documents that it considered were relevant and responsive to the Notice.
- On September 7, 2020, the CMA announced that it had imposed penalties totalling £55,000 on Amazon for failing to comply with requirements imposed on it by Section 109 Notices during its Phase 2 investigation of the anticipated acquisition of certain rights and a minority shareholding in Deliveroo. By way of background, the CMA had issued three Section 109 Notices in December 2019, January 2020 and March 2020, requiring Amazon to produce certain documents and information relevant to the CMA's investigation. However, only a total of 189 documents were provided and these were more than two months late and only after follow-up by the CMA.
- On October 11, 2019, the CMA announced that it had imposed a penalty of £20,000 on Sabre Corporation acquiring Farelogix for failing, without reasonable excuse, to comply with Section 109 Notices, which had been sent in March and April 2019, during the Phase 1 investigation. In its penalty decision, the CMA noted that a total of 188 unique documents were submitted around two months after the applicable deadlines had expired at a relatively advanced stage in the CMA's investigation. It concluded that Sabre's reliance on external US counsel to conduct a privilege review does not give rise to a reasonable excuse as its failure to adopt a quality control process that was adequate to ensure compliance with the requirements of the Section 109 Notices was a foreseeable error.
The duty to make full disclosures on time is an important aspect of the UK's merger control regime, as it is in the EEA where parties have similar duties of full disclosure under the European Merger Regulation. This ensures transparency and fairness in the process, and enables the CMA to carry out its investigations effectively. Merger parties are strongly advised to provide accurate and complete information to ensure a fair and thorough review by the CMA. It is also important for the merger parties to notify the CMA as soon as possible after receiving a request for information if they encounter any difficulties in meeting the deadlines for providing the requested information.
