Opening the Door to Behavioural Fixes and Efficiency Claims? The CMA’s new Draft Guidance on UK Merger Remedies

The UK Competition and Markets Authority ("CMA") published its draft revised guidance on merger remedies on 16 October 2025 (the "Draft Guidance"), proposing updates to its approach to the selection, design and implementation of remedies in merger cases. The consultation is open until 13 November 2025, with final guidance expected to be in place later this year.

In line with expectations, the proposed changes aim to enable more mergers to be cleared with remedies at an earlier stage, reducing uncertainty for businesses and speeding up merger review timelines. In doing so, the CMA seeks to embed its new '4Ps' framework into the merger remedies process as part of the UK Government's push for regulators to support its "pro-growth" mission.

Overall, the proposed changes:

Signal greater flexibility towards the acceptance of behavioural remedies, and a willingness to consider these solutions during an initial Phase 1 review where appropriate – whilst recognising that the distinction between structural and behavioural solutions is "not always clear cut".
Push for earlier dialogue with the CMA regarding possible remedies.
Introduce modest changes regarding benefits and efficiencies that could balance concerns about the negative effects of a merger.

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Understanding the CMA's historical attitude to merger remedies

Over the past decade, the UK's approach to merger remedies has prioritised certainty, practical effectiveness and the elimination of competitive harm (rather than a lighter-touch mitigation of anti-competitive effects). The CMA has therefore typically favoured structural remedies (primarily involving "clean break" divestments which provide certainty and little-to-no ongoing monitoring) over behavioural remedies that target the parties' conduct post-merger.

By way of example, the CMA blocked the proposed merger of Sainsbury's and Asda (two of the UK’s four national supermarket retailers) in 2019 and imposed a 10-year ban on future deals between the parties. The CMA rejected a package of behavioural remedies in the form of 'price promises' proposed by the parties (in part because those promises were thought "very likely to be difficult to track in practice"). This decision reflected the CMA's traditional emphasis on preserving pre-merger market conditions and prioritising clear-cut solutions over complex monitoring.

Between 2022 and 2024, the CMA cleared nine transactions conditional on structural remedies at Phase 2 compared to only one conditional on behavioural remedies.^[1].

Why is the CMA's approach to merger remedies changing?

In November 2024, Sarah Cardell, CEO of the CMA, gave a speech at Chatham House triggering a review of the UK's merger control regime, with a particular focus on remedial action. In February 2025, the Government published its draft 'strategic steer', with the core message of directing the CMA to focus on economic growth. Subsequently, Cardell officially launched a 'Merger Remedies Consultation and Review' process which, at its heart, featured a Call for Evidence with the aim of collecting feedback from businesses, advisers and trade/consumer associations. The Call for Evidence sought to understand whether the CMA's traditional categorisation of remedial action and preference for structural solutions was useful for businesses and helpful for developing competitive UK markets and fostering economic growth. The output of that Call for Evidence fed into the Draft Guidance, which is currently out for consultation.

Greater flexibility towards the acceptance of Behavioural Remedies, including at Phase 1

The CMA's current (2018) merger remedies guidance ("Current Guidance") states that: "Behavioural remedies are unlikely to deal with an SLC [substantial lessening of competition] and its adverse effects as comprehensively as structural remedies and may result in distortions when compared with a competitive market outcome". This is a clear contrast in tone to the new Draft Guidance and the CMA's recent communications. Whilst the Draft Guidance maintains the high-level view that structural remedies are more likely to be effective in resolving competition concerns, it softens the CMA's overall approach to behavioural remedies.

        
            The Current Guidance only envisages the acceptance of behavioural remedies where:
        
A structural remedy is not feasible;
The "substantial lessening of competition" (or "SLC", i.e. the UK test for the CMA to intervene in a merger) is expected to have a relatively short duration; and/or
The “relevant customer benefits” are likely to be substantial compared with the adverse effects of the merger (and those benefits would be largely preserved by behavioural remedies but not by structural remedies).

The Draft Guidance proposes to widen that scope. It refers to the following additional factors which may be used by the CMA to consider behavioural remedies as appropriate:

Where there is an industry regulator with appropriate expertise, powers and resources (as this increases the likelihood of effective monitoring and enforcement) or the parties appoint a trustee to assist the CMA in fulfilling its monitoring role.
Where there is a high degree of market transparency, making it more likely that customers, competitors and suppliers are in a strong position to identify and report non-compliance to the CMA.
Where the remedy aligns with existing commercial practices and norms.
Where the industry is sufficiently mature and stable such that there is a low risk that the market or competitive conditions change in ways which mean that the remedy becomes ineffective or starts to distort market outcomes.

The Draft Guidance also removes the presumption against the acceptance of behavioural remedies at Phase 1, albeit maintaining the position that the remedy must be "clear cut" (i.e. there must not be material doubts over the overall effectiveness of the remedy, and the remedy must be capable of implementation within the Phase 1 timetable).

Phase 1 behavioural remedies will not, however, be the answer in every case. Most recently, the CMA rejected a package of both structural and behavioural remedies offered by the parties in the Getty/Shutterstock merger. Whilst the CMA has commented that those remedies were offered at a "late stage" the parties appear to disagree.

Earlier dialogue on remedies design

As part of its 4Ps framework, the CMA has already introduced measures to improve timing in its merger reviews. It has, for example, established new KPIs to complete pre-notification within 40 working days (against an average of 65) and to reduce the current target for straightforward Phase 1 cases to 25 working days (down from 35). The CMA has also committed to enable more early, direct engagement between senior CMA staff and parties (and businesses and investors more generally outside of specific investigations).

The Draft Guidance now goes further to encourage and facilitate early discussions over remedy design, in part because earlier discussions will increase the likelihood of the "clear cut" Phase 1 standard for the acceptance of remedies being met.

First, the CMA signals that it will be open to early, without-prejudice discussions on remedies, including during Phase 1 and even in pre-notification.
Second, the Draft Guidance encourages the use of a monitoring trustee and/or industry expert by parties to assist with remedies discussions and, in particular, for the purpose of assisting the CMA’s assessment of the remedies proposals (although this approach will inevitably introduce costs for parties).

Modest changes to "relevant customer benefits" and efficiencies that could balance concerns about the negative effects of a merger

Broadly, the CMA recognises two groups of benefits that may arise from a merger: rivalry enhancing efficiencies and relevant customer benefits ("RCBs").

Rivalry enhancing efficiencies arise where a merger changes the incentives of the parties, encouraging them to act as stronger competitors. These efficiencies will only be taken into account by the CMA if they are expected to be realised in the market where the competition concerns arise. Rivalry enhancing efficiencies have the potential to give rise to RCBs.

RCBs are legislatively defined benefits to direct and indirect (including future) customers resulting from a merger (either inside or outside the market where the competition concerns arise). RCBs may take the form of lower prices, higher quality, greater choice or greater innovation. RCBs do not need to be brought about by increased competition in the market in which the competition concerns arise.

The bar for parties to prove RCBs is high (with verifiable, substantiating evidence required to prove that the benefits exist, and that a particular remedy would remove or reduce them to such an extent that it would no longer be proportionate). As such, RCBs have rarely been accepted by the CMA. Whilst not proposing to lower their high bar, and reflecting the CMA's wariness of opening the floodgates to spurious RCB claims, the Draft Guidance aims to clarify how different types of RCBs will be considered when assessing remedies. It also seeks to clarify how remedies can be used to secure rivalry enhancing efficiencies.

The proposed changes reflect recent CMA experience, for example in the 2024 Vodafone/Three merger, a four-to-three mobile telecoms tie-up. The CMA's competition concerns centred around likely price rises from the merger and its view that the expected efficiencies (in terms of lower costs and improved quality) would not have offset the competitive harm. Rather than requiring a structural solution, the CMA accepted a package of behavioural remedies including a legally binding investment commitment for the parties' combined 5G network, coupled with caps on prices whilst the investment was rolled out. The CMA considered the package likely to lock in efficiencies (in terms of improved capacity, coverage, service quality and pricing) that might otherwise have been lost through a structural solution.

Potential for more complex approaches to structural remedies

When considering a structural package, the CMA retains the stance that it will generally prefer the divestiture of an existing business (which can compete effectively on a stand-alone basis) to the divestiture of part of a business or a collection of assets (i.e. a 'carve-out') or other complex structural remedies such as IP divestitures. The Draft Guidance does, however, signal some increased flexibility here, in line with recent CMA practice.

Earlier this year, the CMA cleared the Schlumberger/ChampionX merger at Phase 1, subject to a package of remedies including a carve-out of assets and licensing commitments (alongside a more traditional divestment).

The Draft Guidance provides more clarity around the types of evidence it will take into account when assessing carve-outs and ways to mitigate the risks of complex divestments. Risk mitigation measures may include the use of upfront buyers, monitoring trustees or alternative 'fall-back' remedies where the divestment is unsuccessful.

Of relevance to parties operating in local markets, the Draft Guidance also suggests a departure from its general requirement for a divestment remedy to remove the entire overlap giving rise to the competition concern. Where the CMA has applied a 'filter' or 'decision-rule' (e.g. a combined market share threshold for identifying an SLC in a local area), the Draft Guidance states that the CMA may accept divestments at Phase 1 that reduce the combined share to below the relevant threshold rather than the usual position of requiring a divestment of the full increment. Whilst the parties will need to provide the CMA with "robust" evidence that such a divestment is still effective, the potential rewards from avoiding a lengthy Phase 2 investigation may be significant.

What about the EU?

In many respects, the CMA's proposed changes arguably align the UK more closely with the EU's approach, where behavioural remedies have tended to gain more traction in the past and remedies discussions have perhaps been more nuanced (for example, in the cases of ALD/LeasePlan (November 2022), Microsoft/Activision Blizzard (March 2023), and Broadcom/VMware (July 2023)).

In the highly publicised 2023 Microsoft/Activision Blizzard case, the CMA first blocked the merger by rejecting a package of behavioural remedies (namely, cloud gaming licences outside the EEA) and later cleared the deal subject to a divestment (the sale of Activision's cloud streaming rights outside of the EEA). In contrast, the European Commission cleared the merger subject to similar behavioural commitments (including a cloud gaming licence within the EEA and a commitment around consumer choice and product availability).

However, the way in which the EU and UK are tailoring their merger remedy processes to align with wider "pro-growth" agendas creates both opportunities and challenges for deal makers. Whilst increased opportunities to put efficiency arguments before competition authorities and seek early engagement will undoubtedly empower parties to seek more innovative solutions to complex mergers, any differences in approach to emerge between jurisdictions will need to be carefully managed. Whilst the recently agreed (but yet to be ratified) EU-UK Competition Cooperation Agreement provides for enhanced cooperation across merger (and other competition) investigations, the specific ways in which the two authorities plan to approach remedy design should be closely followed. The CMA, through its Draft Guidance, largely focuses on improving the current, case-specific approach, to merger remedy review. At the EU level, the European Commission is exploring the application of a wider, potential 'innovation defence' – and, whilst not specific to the remedies process, it remains to be seen how the Commission will consider innovation in remedies assessments going forward.

Key Take-Aways

The CMA's programme of work on merger remedies is part of a wider set of reforms to UK merger control, some of which are already in place and some of which are still being considered. Most recently, the UK Government has confirmed that proposals are in motion to update the UK's jurisdictional tests (namely the 'share of supply' test and the concept of 'material influence') as well as reforms to Phase 2 decision making (with a proposal to replace the current Phase 2 panel of independent experts with an internal CMA board).

Although the core principles relevant to the CMA's assessment of merger remedies remain broadly the same under the Draft Guidance, the proposed changes seek 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. The precise benefits for business will only become clear through the CMA's application of the guidance once it becomes final (which is expected towards the end of the year). However, 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 new 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.

[1] Annual merger investigation outcomes - GOV.UK