Authored By: Olivia Eliadou
Durham University
Introduction
In 2025, the Competition and Markets Authority (CMA) considered 881 mergers, investigated 39 at Phase 1, referred 4 to Phase 2 and ultimately blocked just one.[1] While these figures do not, by themselves, suggest that UK merger control is primarily a problem of excessive prohibition, the sharper question is whether the current regime creates uncertainty for businesses, investors and legal advisers despite the low number of blocked mergers.
The CMA is the UK’s competition authority.[2] It investigates transactions which meet the appropriate criteria and may substantially lessen competition in the UK.[3] Phase 1 is the process used to determine whether there is a realistic prospect of harm to competition, while Phase 2 involves a detailed examination applying a higher standard.[4]
The UK Government has proposed some reforms to the competition regime in order to enhance confidence in the UK’s attractiveness for business and investments. In its January 2026 consultation,[5] the Government stated that its “primary mission” is to “deliver economic growth” and that effective competition can support “increased investment, productivity, innovation and, ultimately, growth”.[6] The reforms focus on improving the “pace, predictability, proportionality and process” of the UK competition regime,[7] including proposed changes to jurisdictional tests for mergers, Phase 1 remedies and Phase 2 decision-making.[8]
While the article contends that the proposed changes could enhance the attractiveness of UK M&A activity by increasing predictability and targeting, the legal value of the reforms depends on whether or not independent scrutiny is maintained in cases where a merger may harm competition, consumers, or innovation. The article will begin by examining the nature of the reform proposals. It will then move on to examine the importance of merger control from a legal perspective before addressing the significance of the reform proposals to law firms and the economy, followed by an analysis of the balance between speed, accountability and independent scrutiny.
The Reform Agenda: Speed, Predictability and Targeted Merger Control
The Government is seeking views on proposed reforms aimed at improving the “pace, predictability, proportionality and process” of the UK competition regime while promoting effective competition, supporting economic growth and maintaining the CMA’s independence.[9] The proposals should therefore be seen as a proposed refinement of the existing UK merger-control system rather than its drastic dismantling.
The reform agenda contains important changes to who decides the most serious merger cases. Presently, Phase 2 merger investigations are carried out by Panel-led Inquiry Groups.[10] The Government proposes replacing these “with decision-making involving new sub-committees of the CMA Board”.[11] It presents this as a way of improving accountability, consistency and predictability in merger and markets decision-making.[12] Changing the decision-maker affects the structure of merger control, not simply its timing.[13]
There is also the suggestion to improve the predictability of the CMA’s jurisdictional tests. The Government agrees that the flexibility of the jurisdictional tests is one of the advantages of the regime but acknowledges that it can make it difficult for parties to determine whether the regime applies to a particular transaction.[14] This is especially relevant in the UK’s voluntary regime since the parties must determine whether to notify the CMA, submit a briefing paper or proceed without engagement.[15]
Furthermore, the proposed changes relate to the rules governing the share of supply test. The Government suggests removing the right of the CMA to consider “some other criterion, of whatever nature” and limiting the assessment to the certain criteria such as value, cost, price, quantity, capacity and number of workers employed.[16] This would introduce a degree of legal certainty into the regime but may also reduce the degree of flexibility of one of the most flexible aspects of the regime.
The Government further proposes clarifying the material influence test. Relevant factors include shareholding or voting rights, board representation or appointment rights, veto rights over strategic decisions, access to confidential strategic information and commercial, financial or consultancy arrangements.[17] This is relevant because not all transactions that have the commercial significance are full takeovers. Minority investments, strategic partnerships and commercial or financial arrangements may also involve influence of one party on the activities of the other.[18]
Finally, the Government suggests the extension of the Phase 1 remedies period from up to 10 working days to up to 20 working days.[19] This gives the parties “longer runway for Phase 1 remedies” and allows the possibility of resolution of “near misses” without proceeding to Phase 2.[20] On the other hand, it means that potential remedies should be considered and tested during the early stages of the transaction.[21]
Apart from the above-mentioned suggestions, the reform package also involves the proposals on market remedies including possible sunset clauses and review of market remedies at least every 10 years.[22] This is relevant as the part of the wider regulatory context but should not be confused with merger review. Market remedies concern interventions following market work, while merger remedies address specific transactions.
The Legal Function of Merger Control
Merger control serves the legal role of protecting consumers and markets, rather than serving as an administrative procedure that slows down transactions. The CMA’s merger-control guidance states that the process is part of its duty to “promote competition for the benefit of consumers”,[23] while also operating efficiently and respecting parties’ due process rights.[24] The key balance in merger control is therefore between efficiency of the process and the protection of consumers and competition from mergers that threaten them.
A substantial lessening of competition is the central legal issue in merger control. The obligation of the CMA to refer an actual or proposed merger into Phase 2 rests on the existence of relevant merger situation where a particular merger has resulted in, or may be expected to result in, a substantial lessening of competition in UK markets.[25] Thus, the Phase 2 procedure cannot be viewed as a mere administrative process but rather as a more complex legal and economic assessment of whether a particular merger should be cleared, remedied or prohibited.
There are certain limitations to the jurisdiction of the CMA on mergers. The CMA “can only investigate a merger if it meets certain legal criteria”[26] such as cessation of being distinct enterprises and satisfying of the relevant turnover, share of supply or hybrid tests.[27] This jurisdiction can exist where the merging parties together supply at least 25% of a relevant category of goods or services in the UK or part of the UK, the UK turnover of the target exceeds £100 million or the hybrid test applies where one enterprise has UK turnover over £350 million and a share of supply over 33%, while the other one has UK nexus.[28]
The jurisdiction rules, hence, determine the limits of the CMA’s power to investigate mergers. The proposals of introducing changes into the share of supply and material influence tests are the proposals of legally significant changes since they may clarify the boundaries of the jurisdiction for the businesses and their advisors.[29] They should not be viewed just as an extension of the jurisdiction of the CMA. The safer point is that they seek to make the existing jurisdictional framework more predictable.
The legal role of merger control extends far beyond just review of each particular transaction. The Draft Annual Plan of the CMA states that “merger control safeguards consumer interests and ensures UK markets remain dynamic and competitive, spurring innovation and growth”,[30] while noting that “most mergers do not raise competition concerns”.[31] The legal role of the merger control is therefore to differentiate legitimate transactions from those that might be harmful for competitive processes, consumers or innovation.
The proposed reforms should be assessed by means of whether they will improve the effectiveness of merger control without losing its legal role.
Why the Reforms Matter for M&A Legal Practice
The risks associated with merger control extend beyond the ultimate decision made during the notification procedure. These risks can impact deal structure, deal completion timing, funding, conditions of agreement and the ability of the parties to start business integration.[32] Therefore, corporate and competition lawyers need to consider not only whether a merger will eventually get approved by the regulator but also how legal uncertainties will be addressed in the course of the deal-making.
Since the regime in question is voluntary, “dealmakers can choose how to engage with the CMA”.[33] Parties can notify the merger to receive a formal CMA decision or submit a briefing paper to demonstrate that the deal does not raise any UK competition issues ask the CMA to confirm that it does not intend to call in the transaction for full review. [34] While the former one can bring more certainty into the transaction, it will affect its timing and cost. In the case of the latter, it may be less burdensome, but it will still require proper assessment of the situation and whether the CMA may have concerns.
The voluntary regime does not make the merger control issues irrelevant. Reforms do not affect the existing voluntary notification system, and, thus, deal teams still need to evaluate the risks of approaching the CMA at different stages of the transaction.[35] A decision not to notify the CMA can be costly and disruptive for the business in the case when the regulator decides to refer the deal to itself after completion of the transaction, especially when there are hold-separate obligations imposed.[36] This is not to say that all the deals which were not notified will create problems, but this explains why the merger control advice is always important.
The reform agenda may thus result in the modification of the nature of legal advice rather than the reduction in its significance. Risk assessment for UK merger control has “shifted significantly for dealmakers” and involves considering issues “beyond a purely technical analysis of filing thresholds”.[37] Lawyers may therefore need to assess call-in risk, UK nexus, the possibility of CMA involvement, whether a briefing paper should be submitted, potential remedies and the allocation of regulatory risk in transaction documents.
Despite all these developments, there will still be a need for legal assessment of the case. The clear language of the share of supply test and the material influence test may assist lawyers to assess whether the transaction is within the jurisdiction of the CMA.[38] However, there may be situations which cannot be taken care of by legislation in respect of the minority investments, strategic partnerships or transactions with limited UK nexus in international markets. Hence, the merit of the reform in the eyes of law firms is that it may make legal advice clearer and more evidence-based, rather than simple or unnecessary.
The way of implementing remedies is also important for the legal practice. The extension of the Phase 1 remedies period from 10 up to 20 working days can be helpful for the parties to work out their differences on Phase 1 and avoid additional costs of going to Phase 2, potentially saving up to 24 weeks of further investigations.[39] This can provide parties with “longer runway for Phase 1 remedies” and make it possible to solve “near misses”.[40] This change can be beneficial from a commercial point of view. Nevertheless, it puts extra pressure on the preparatory work before the deal because of a tight time window. The Phase 1 remedies proposal is therefore useful, but businesses should explore and stress-test potential remedies before the Phase 1 decision where concerns are anticipated.[41]
Merger Control and Economic Growth
The Government argues that effective competition in dynamic UK markets can deliver “increased investment, productivity, innovation and, ultimately, growth”.[42] Competition enforcement is therefore part of economic policy. A clearer, more proportionate and predictable merger-control regime may help businesses assess regulatory risk before committing to a transaction.
The CMA’s Draft Annual Plan also links competition, consumer protection, economic growth and household prosperity.[43] It acknowledges the need for the UK to attract investment and the ability of the CMA to contribute to a regulatory landscape that instils business confidence.[44] However, it makes clear that “this does not mean less robust decision-making”.[45] Therefore, the economic rationale for reforms is not weaker but more selective enforcement.
The issue of predictability plays an especially important role since uncertainties can cause economic costs. A proportionate and predictable system may help ensure that the UK is an attractive place to do business and invest.[46] Businesses and investors need greater confidence about the potential necessity of CMA intervention and its duration. They cannot know these matters with certainty, but a more predictable regime may assist planning.
However, not all mergers are economically beneficial. The Government recognises that mergers can promote efficiency, innovation and growth, but may also harm competition through higher prices and reduced innovation.[47] The CMA similarly notes that mergers raising competition concerns can harm consumers and businesses, including through higher prices and reduced incentives to invest.[48] Economic growth is therefore not promoted simply by allowing deals to complete more quickly, but by ensuring that mergers do not harm the competitive conditions that support investment and innovation.
The better question is not whether merger control should prioritise growth or competition. Effective competition is itself part of the growth framework. Although slow and uncertain merger review might deter investment, an ineffective regulatory system might permit harmful concentration of markets. The effectiveness of the reform can thus be determined by how well it addresses issues related to competition.
Legal Considerations: Independence, Accountability and Procedural Safeguards
The primary legal concern is not the number of mergers assessed by the CMA, but whether the reforms preserve a targeted, independent and procedurally fair system. The statistics compiled by the CMA provide evidence that this is the right approach. For example, in 2025, just 0.1 percent of the reviewed mergers were prohibited or abandoned.[49] In 2024, the CMA reviewed 1,037 mergers, of which 38 were scrutinized during Phase 1, 5 were sent to Phase 2 and 0.1 percent were blocked or abandoned.[50] In 2023, 848 mergers were investigated during Phase 1, 56 mergers were scrutinized during Phase 1, 10 were sent to Phase 2 and 0.5 percent were blocked or abandoned.[51]
The current Phase 2 structure is important because Inquiry Groups are legally required to act independently of the CMA Board.[52] The CMA describes them as a “fresh pair of eyes” in the Phase 2 process.[53] This matters because Phase 1 identifies whether there is a realistic prospect of a substantial lessening of competition, while Phase 2 assesses the issue in greater depth. Independent Phase 2 panels therefore separate initial screening from final in-depth decision-making.
The Government’s argument is that the current structure may create accountability concerns because senior CMA officials accountable to Parliament are prevented from taking part in some significant Phase 2 decisions.[54] It therefore proposes replacing Panel-led Phase 2 decision-making with sub-committees of the CMA Board to improve accountability, consistency and predictability while maintaining independence of the CMA from government. [55] This is a legitimate concern, since economically significant decisions should be accountable and consistent.
However, accountability and independence are not identical. The proposed model would give the CMA executive a more “hands-on” role in Phase 2 reviews, while the current model benefits from a “fresh pair of eyes” through independent panel members.[56] Abolishing independent panels would remove a significant constraint on CMA executive decision-making and raise concerns about “checks and balances”.[57] The panel system provides a “fresh pair of eyes” and mitigates “institutional confirmation bias”.[58] Yet practitioner commentary does not prove that political interference will occur, but raises a serious question about whether the perception and structure of independent scrutiny may be weakened.
In case the government goes ahead with the replacement of the independent panels, there would be need for further safeguards. It could be more problematic because the UK system is said to lack certain safeguards that exist in the peer systems like access to file and merits review on appeal.[59] Phase 2 decisions are judged according to judicial review standard and in case of the abolition of the panel, there would have to be compensation of the lack of independence in decision-making through better safeguards like merits review and proper access to file rights.[60] The Government’s argument is that the decisions would be subject to judicial review by the Competition Appeal Tribunal.[61] It is a very important legal instrument, but it is different from a merits review.
The key legal question becomes that of balance between speed, consistency, and accountability against independent oversight. The inclusion of the Board in the process could increase accountability, but if Board involvement lessens the existing separation achieved through independent Phase 2 investigations, further steps might be necessary. Otherwise, there would be a risk that improvements in efficiency could result in decreased confidence in the merger review process. The objective should be targeted enforcement: reduced burden on unproblematic mergers but robust independent oversight of those potentially damaging to competition, consumers, and innovation.
Conclusion
It is clear that the proposed changes in relation to merger control in the UK should be welcomed only in a qualified sense. Speed, certainty and proportionality may all go some way towards assisting law firms to advise clients, reducing risk and encouraging UK investment. However, merger control cannot be treated merely as an administrative burden on dealmaking. It is a legal safeguard designed to protect competition, consumers and market dynamism.
As the CMA statistics reveal, relatively few considered mergers ultimately end up being blocked or abandoned. What needs to be done, then, is to ensure that the proposed reforms provide clearer guidance, faster proceedings and less uncertainty without weakening the legal function of merger control.
In conclusion, it seems that such reforms should be welcomed, provided that they do not impinge on the effectiveness of merger control as a legal safeguard. Greater accountability and efficiency should not come at the expense of independent scrutiny, particularly with regard to complex Phase 2 proceedings. Any reduction in the independent panel system should therefore be accompanied by stronger procedural safeguards to preserve confidence in the fairness of merger review.
Bibliography
Official Materials:
- Department for Business and Trade, Refining Our Competition Regime: Driving growth and enhancing competition for businesses and consumers (Consultation Paper, 20 January 2026)
- Competition and Markets Authority, Mergers: Guidance on the CMA’s jurisdiction and procedure (CMA2, 28 October 2025)
- Competition and Markets Authority, ‘Draft Annual Plan 2026 to 2027’ (uk 23 March 2026) https://www.gov.uk/government/consultations/cma-draft-annual-plan-2026-to-2027/draft-annual-plan-2026-to-2027
- Competition and Markets Authority, ‘Annual Merger Investigation Outcomes’ (gov.uk 9 June 2026) https://www.gov.uk/government/publications/merger-investigation-outcomes/annual-merger-investigation-outcomes
Secondary Sources:
- Aitken J and Raftery C, ‘UK Government Heralds Major Changes to UK Merger Control Regime’ (com 20 January 2026) https://www.freshfields.com/en/our-thinking/blogs/risk-and-compliance/uk-government-heralds-major-changes-to-uk-merger-control-regime-102m2jl
- Osborne Clarke LLP, ‘UK Merger-Control Reform Proposals Raise Concerns for Deal Teams to Watch’ (com 23 April 2026) https://www.osborneclarke.com/insights/uk-merger-control-reform-proposals-raise-concerns-deal-teams-watch
- Cooley, ‘UK Merger Control in 2026 – What to Expect’ (com 19 February 2026) https://www.cooley.com/news/insight/2026/2026-02-19-uk-merger-control-in-2026-what-to-expect
[1] Department for Business & Trade, Refining Our Competition Regime: Driving growth and enhancing competition for businesses and consumers (Consultation Paper, 20 January 2026) 1
[2] Ibid 8
[3] Competition and Markets Authority, Mergers: Guidance on the CMA’s jurisdiction and procedure (CMA2, 28 October 2025) 3, 10
[4] Department for Business and Trade, Refining Our Competition Regime (n 1) 14-15
[5] Department for Business & Trade, Refining Our Competition Regime: Driving growth and enhancing competition for businesses and consumers (Consultation Paper, 20 January 2026)
[6] Department for Business and Trade, Refining Our Competition Regime (n 1) 3
[7] Ibid 3-5
[8] Ibid 9-11
[9] Ibid 5
[10] Ibid 9
[11] Ibid
[12] Ibid 12-18
[13] Ibid 14-15
[14] Ibid 29-32
[15] Cooley, ‘UK Merger Control in 2026 – What to Expect’ (cooley.com 19 February 2026) <https://www.cooley.com/news/insight/2026/2026-02-19-uk-merger-control-in-2026-what-to-expect>.
[16] Department for Business and Trade, Refining Our Competition Regime (n 1) 30-31
[17] Ibid 31-32
[18] Ibid
[19] Ibid 32
[20] James Aitken and Colin Raftery, ‘UK Government Heralds Major Changes to UK Merger Control Regime’ (freshfields.com 20 January 2026) <https://www.freshfields.com/en/our-thinking/blogs/risk-and-compliance/uk-government-heralds-major-changes-to-uk-merger-control-regime-102m2jl>.
[21] Osborne Clarke, ‘UK Merger-Control Reform Proposals Raise Concerns for Deal Teams to Watch’ (osborneclarke.com 23 April 2026) <https://www.osborneclarke.com/insights/uk-merger-control-reform-proposals-raise-concerns-deal-teams-watch>.
[22] Department for Business and Trade, Refining Our Competition Regime (n 1) 25-26
[23] Competition and Markets Authority, Mergers Guidance (n 3) 3
[24] Ibid
[25] Competition and Markets Authority, Mergers Guidance (n 3) 10
[26] Competition and Markets Authority, ‘Annual Merger Investigation Outcomes’ (gov.uk 9 June 2026) <https://www.gov.uk/government/publications/merger-investigation-outcomes/annual-merger-investigation-outcomes> 1
[27] Competition and Markets Authority, Mergers Guidance (n 3) 13-15
[28] Osborne Clarke (n 21)
[29] Department for Business and Trade, Refining Our Competition Regime (n 1) 29-32
[30] Competition and Markets Authority, ‘Draft Annual Plan 2026 to 2027’ (gov.uk 23 March 2026) <https://www.gov.uk/government/consultations/cma-draft-annual-plan-2026-to-2027/draft-annual-plan-2026-to-2027>.
[31] Ibid
[32] Osborne Clarke (n 21)
[33] Cooley (n 15)
[34] Ibid
[35] Osborne Clarke (n 21)
[36] Ibid
[37] Cooley (n 15)
[38] Department for Business and Trade, Refining Our Competition Regime (n 1) 29-32
[39] Ibid 10-11
[40] Aitken and Raftery (n 20)
[41] Osborne Clarke (n 21)
[42] Department for Business and Trade, Refining Our Competition Regime (n 1) 3
[43] Competition and Markets Authority, Draft Annual Plan (n 30) 1
[44] Ibid 2
[45] Ibid
[46] Ibid 3-4
[47] Department for Business and Trade, Refining Our Competition Regime (n 1) 12
[48] Competition and Markets Authority, Draft Annual Plan (n 30) 13
[49] Competition and Markets Authority, Merger Investigation Outcomes (n 26) 1
[50] Ibid
[51] Ibid 2
[52] Competition and Markets Authority, Mergers Guidance (n 3) 105-107
[53] Ibid 107
[54] Department for Business and Trade, Refining Our Competition Regime (n 1) 8-18
[55] Ibid
[56] Aitken and Raftery (n 20)
[57] Ibid
[58] Osborne Clarke (n 21)
[59] Aitken and Raftery (n 20)
[60] Osborne Clarke (n 21)
[61] Department for Business and Trade, Refining Our Competition Regime (n 1) 18-19
