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UK Competition Reform not a priority for Burnham

Overview

According to government sources it appears the UK Competition Reform Bill (the "Bill") is no longer a priority for the new prime minister Burnham and his team due to a "shift in political priorities".

The Department for Business, Innovation, Science and Trade is still reviewing feedback to the current consultation on measures to improve the "4Ps" (pace, predictability, proportionality and process) of the UK's competition regime, adopted in 2025 as part of the government's pro-growth agenda. However, it now appears the Bill is unlikely to proceed, at least in the short/medium term. 

The government's change in direction seems less likely a result of criticism the proposals had attracted from some in the legal and business community (see below), but rather a change in priorities towards the implementation of the overall package of employment and economic reforms under the new prime minister. 

The Bill had been announced in the King's Speech in May this year as part of the government's pro-growth strategy, with the aim of improving the Competition and Market Authority's (the "CMA") accountability to Parliament, businesses and the public. 

The Bill would have substituted the CMA's independent panel system for UK Phase 2 mergers and market investigations with sub-committees of the CMA Board (consistent with the digital markets regime). This proposal had attracted criticism from legal practitioners, businesses and industry associations for removing the "fresh pair of eyes" safeguard previously in place via the independent panel members who currently take final decisions on Phase 2 mergers and market investigations. It is argued the current system provides an important structural check on the CMA Executive which would not have been replicated in the revised structure that had been proposed.

Other changes proposed to be included in the Bill included:

  • streamlining market studies and market investigations into a single process and reducing total review timeframes to 18 to 24 months;

  • clarifying jurisdictional tests for mergers (the share of supply and material influence tests);

  • extending the period to consider Phase 1 merger remedies from 10 to 20 working days;

  • increasing the flexibility of the concurrency framework – allowing the CMA to determine whether to take forward market reviews in the regulated sectors and allowing sectoral regulators to monitor and enforce remedies imposed or accepted by the CMA in the relevant regulated sector;

  • sunset clauses for market remedies imposed by the CMA and a requirement for the CMA to review market remedies every 10 years to ensure proportionality and adequacy of remedies;

  • an extension of time for parties to agree remedies at the end of Phase 1 merger investigations; and

  • revised information request powers to assist in the investigation of algorithms

Each of these changes will not now proceed. Of particular note in this regard is that the proposed amendment to provide greater clarity on the circumstances in which the "share of supply" merger control jurisdictional test applies will not now take effect. The proposed amendment to this uncertain jurisdictional threshold would have provided welcome clarity to merging parties by limiting the assessment of shares of supply (25% under the share of supply test or 33% under the hybrid test introduced in a 2024 amendment) to a defined set of six criteria (value, cost, price, quantity, capacity and number of workers employed). There was also a proposal for a closed list of factors for the CMA to assess whether minority shareholdings are sufficient to trigger UK merger control (the "material influence" jurisdictional test).

In the absence of any change, the CMA will continue to benefit from a wide discretion to deploy unconventional metrics to assert jurisdiction. This is a discretion it has been ready to deploy in past cases to ensure it obtains jurisdiction over cases it considers important to review. That said, consistent with the 4Ps growth agenda, even absent this legislative change, we would expect the CMA to exercise a degree more caution in future before adopting jurisdictional metrics beyond those in the proposed amendment.

Further, the sidelining of the Bill does not impact the other pro-growth measures already adopted by the CMA with reasonable success since the inception of its 4Ps strategic framework, including more streamlined merger control reviews, increased dialogue with merging parties and more targeted information gathering consistent with its KPIs.  

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