Continuing my look back at 2022….
One of the features of the very low number of cases in 2021 and 2022 is the tiny number of cases considered for application of the ‘de minimis’ (low market size) exception to the CMA’s duty to refer.
In simple terms this exception enables the CMA to decide that it is not worth taking further action against mergers where an investigation has shown that competition problems may arise but where the size of the markets involved and/or the effects of the competition harm are too small to justify a reference to an in-depth Phase 2 investigation
In 2021 and 2022 I am aware of only one case in each year where ‘de minimis’ was considered in a public investigation – and accepted in both cases.
In the CMA’s early years between six and nine were considered in each year, with many being unsuccessful.
It is true that, in 2017, the CMA increased the market size below which it would be likely to exercise the exception.
This inevitably takes some cases out of the CMA’s reach (by my calculation, perhaps about half of them at the original thresholds).
But it also shifted the lower de minimis boundary upwards, meaning that cases that would once not have qualified for de minimis treatment, now do so.
So where are these cases?
Perhaps there simply haven’t been many in recent times and they will reemerge in due course.
Perhaps the CMA’s Merger Intelligence Committee has paid them less attention than before.
Or maybe more are now being dealt with through the CMA’s non-public briefing paper system , under which – since 2016 – merging parties have been able to submit a short paper to the CMA setting out why the CMA should not formally investigate the deal.
If there were, say, 50-100 briefing paper cases during 2022, it would be quite plausible that 5-10 or so might feature de minimis aspects (though less clear why none would make it through to investigation).
In the absence of published data on the CMA’s briefing paper activity how likely is this scenario?
If you have views on this (or any of the above) do let me know, either in the comments box below or by dropping me a line.