The government will this week unveil plans for a radical overhaul of the way mergers are scrutinised in Britain including reforms that observers say will entrench the power of the competition regulator’s boss.
Sky News has learnt that the Department for Business and Trade (DBT) is to announce the abolition of the Competition and Markets Authority’s (CMA) panels system, under which independent experts convene to assess whether corporate deals raise serious anti-trust concerns.
A government source said the CMA’s ability to examine certain types of mergers, such as those involving two foreign companies, could be curtailed under new limits on the watchdog’s jurisdictional powers.
They added that officials had also been considering scrapping the ability for those affected by merger decisions to appeal against the verdicts on their merits, while leaving intact the ability to seek judicial reviews.
The CMA’s current practice of wide-ranging market investigations into entire industries will also be refined, with the CMA’s market studies and market investigations processes merged into a single procedure which lasts between six and 12 months.
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Sources said the CMA would also establish a board sub-committee to scrutinise mergers which are subject to the more detailed Phase-2 investigations and another to supervise the wider market studies.
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One insider said the CMA chief executive, Sarah Cardell, would be eligible to serve on at least one of these board sub-committees, which they added would have the effect of giving the body’s boss much greater influence over the cases it investigates.
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The mergers sub-committee is expected to be augmented by external expert figures, which critics may argue effectively replicates the existing panels system in an inferior way.
Currently, deals including the merger of bread producers Hovis and Kingsmill are the subject of Phase-2 investigations, while the CMA has been conducting a long-running probe into the operation of the UK’s veterinary services market.
A Whitehall source described the proposed changes as the most significant for decades.
Peter Kyle, the business and trade secretary, is due to attend this week’s World Economic Forum in Davos, Switzerland, and could announce the plans there by saying that they will aid the government’s focus on boosting economic growth.
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The government is said to believe that the reforms will accelerate decision-making, providing greater certainty to business.
They will come a year after the former chairman of the CMA, Marcus Bokkerink, was ousted by ministers including the chancellor, Rachel Reeves, as part of a push to deregulate and bolster Britain’s anaemic growth figures.
However, ministers are expected to face questions about whether the proposals risk undermining the independence of merger investigations.
“There is a risk in relation to what an interventionist politician could do as it makes the system more vulnerable to political influence and gives far more discretion to the CMA’s CEO and board to be more or less interventionist,” one regulatory lawyer said this weekend.
Neither DBT nor the CMA would respond to questions about the planned overhaul.
