Competition

What’s happening?

The CMA has been conducting a widespread programme across its merger control function, largely designed to align with the UK Government's pro-growth agenda. Some reforms are already in place (including process improvements to Phase 2 merger investigations, and guidance clarifications as to how the CMA will apply its widely drawn and flexible jurisdictional tests for "material influence" and "share of supply"). Others are still in progress.

Narrowing the CMA's wide jurisdiction

As regards the scope of the CMA's jurisdiction, the UK Government recently confirmed that proposals are in motion to narrow the "material influence" and "share of supply" jurisdictional tests through legislation. In doing so, the Government plans to largely stipulate the factors that can be taken into account when assessing jurisdiction and thereby to increase certainty over the CMA's jurisdictional reach (albeit the proposed list of factors still retains significant flexibility as compared to other European jurisdictions).

Phase 2 decision making

Controversial proposals are afoot to reform Phase 2 decision making, by replacing the current panel of independent experts with decision-making by sub-committees appointed by the CMA Board (comprising CMA Board members, senior CMA staff and "experts" appointed by the Government). In doing so, the Government aims to enhance accountability whilst safeguarding the CMA's independence. However, the proposals raise concerns over the loss of the "fresh pair of eyes" brought by the independent panel, in particular where the standard for appeal is one of judicial review. It also remains to be seen how parties will view the proposed model in terms of their access to the decision makers, balanced against the aim of increased speed and efficiency.

An increased role for Government

Also relevant to the theme of independence, the Government is planning to provide the Secretary of State with a new, formal role in a wider range of key guidance documents, for example to require their consultation or approval.

A more flexible approach to remedies

Last but not least, we have seen material shifts in the CMA's stated approach to merger remedies. Whilst the core principles remain broadly the same, the Government aims to provide more time for remedies to be agreed at Phase 1. Recently revised remedies guidance also seeks to introduce more flexibility (for the CMA to clear deals subject to behavioural solutions and more complex structural solutions) and to enable the CMA to act with greater speed. In terms of the practical benefits for business, the CMA's recent case practice already signals, to some extent, its willingness to take a more innovative approach to remedies discussions in seeking to support the Government's pro-growth agenda. Whilst the revised guidance should be useful in facilitating merger remedies processes in cross-border deals (for example by bringing the UK and EU into closer alignment) any differences that emerge from the ongoing application of each jurisdiction's rules (for example as to the role of efficiencies in remedies assessments) should be closely followed.

What's happening?

Long-mooted reforms to the UK's National Security and Investment Act (NSIA) are expected to be laid before Parliament later this year, in the form of updates to the scope of the sensitive sectors subject to mandatory notification – the aim of which is to provide greater clarity (and in some circumstances limit) which activities are caught. These reforms are also likely to include exemptions from the notification requirements for certain internal reorganisations and the appointment of all insolvency practitioners (currently this is limited to administrators).

Why it matters:

Whilst not yet final or in force, the changes (when they come) will be the latest in a line of reforms drip-fed by UK Government over the past year, with the aim of aligning the NSIA regime with the Government's pro-growth agenda. By aiming to streamline the UK's investment screening process and reduce regulatory burden on businesses, the UK Government intends to create a more efficient and predictable system that encourages investment in critical sectors without compromising the UK's national security.

Our view:

Although these changes have been expected for a while, they are unlikely to be the end of the story for NSIA reform. Indeed, a House of Commons Business and Trade Committee report, published in late 2025, touches on further proposed reforms, again with economic security at their heart. In short, the Committee recommends that the UK Government:

• Explores ways of amending the NSIA to enable information relating to investment screening decisions to be shared with UK Parliament; and
  
  
• Develops an accreditation scheme for providers of trusted capital (similar to models currently used in the United States). The purpose would be to create a marketplace of accredited investors to facilitate investment into strategic sectors.

Whilst it remains to be seen whether the UK Government will act on these proposed future reforms, it is evident that there remains an appetite to further tailor the NSIA regime, and to reduce the burden on certain types of investors.

What's happening?

Continuing geopolitical shifts are also providing the backdrop for a hardening of foreign direct investment (FDI) and national security regimes. Across the UK and EU, we have seen regulators move beyond a "watchlist" approach (e.g. viewing sales to Russia or China in strategic sectors with immediate caution and a presumption for remedial action or in some cases prohibition) towards a universal scrutiny model where even the most friendly cross-border capital may be viewed through the lens of sovereign resilience. Our Competition team discusses the latest developments here.

Our view:

Whilst we do not expect dramatic changes in approach, the direction of travel is clear: outright FDI and NSIA clearance cannot simply be expected, even where deals do not involve parties based in or linked to potentially 'hostile' countries. As governments prioritise resilience and seek to protect against the risk of vulnerability to leverage by other states, the focus on scrutinising all types of buyers has sharpened. Furthermore, even where a block is unlikely, if the target is active in a sensitive/critical sector then behavioural remedies (such as maintaining a headquarters or manufacturing in a high-cost jurisdiction) can materially impact the post-completion position.

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