UK: The OFT’s Discretion Not to Refer – Where Do We Stand?

Last Updated: 31 March 2010
Article by Dr. Gordon Christian

INTRODUCTION

The purpose of this article is to analyse the recent history of the de minimis exception under UK merger control rules, including an analysis of the recent 'Mergers – exceptions to the duty to refer and undertakings in lieu' guidance (the Draft Guidance) that the Office of Fair Trading (OFT) is currently finalising.2 By way of background, this article will also set out the relevant general principles of UK merger control, the statutory context of the de minimis exception, the historical development of the relevant OFT guidance as it has progressed since May 2003 and some key recent OFT decisional practice in this area.

RELEVANT GENERAL PRINCIPLES OF UK MERGER CONTROL

Although the idea has recently been floated that the UK could consider moving to a mandatory merger notification regime (primarily to deal with problematic issues around 'unscrambling the eggs' in completed mergers that give rise to substantial lessening of competition (SLC) concerns),3 the UK's merger control regime is currently voluntary. This means that merging parties are under no obligation to notify the transaction to the OFT, although there is a legal basis for making a 'statutory voluntary notification' to the OFT4 and 'informal submissions' are also accepted.

The OFT has a duty to refer both anticipated and completed mergers to the Competition Commission (CC) if the merger gives rise to a realistic prospect of an SLC. There is a more detailed analysis of the relevant provisions below.

It is in relation to this duty of the OFT to refer mergers that give rise to a realistic prospect of an SLC that the de minimis exception becomes relevant, because in the event that the market in question is, in the words of the Enterprise Act 2002 (the EA), 'not of sufficient importance', the OFT's duty to refer falls away.

The voluntary nature of the UK's merger control regime has a significant impact on the point at which the de minimis exception becomes relevant. As the merging parties can choose whether or not to notify their merger to the OFT, the de minimis exception is not relevant to the question of whether or not to notify. Rather, the de minimis exception is a factor for the OFT to consider when deciding whether or not to refer the merger to the CC.

This in contrast to several Continental European jurisdictions, where the local equivalent to the de minimis exception determines whether the merging parties need to notify the merger to the relevant national competition authority at all. As explained above, this is simply the result of the mandatory nature of merger control in most Continental European legal systems.

The merger control regime in Germany is a good example of such a system. According to para 35(1) of the Gesetz gegen Wettbewerbsbeschränkungen (German Act against Restraints of Competition – 'ARC'), the German merger control regime applies to transactions in which the merging parties have (in the last financial year before the transaction) generated worldwide turnover exceeding €500 million (para 35(1)(1) ARC), and at least one of the parties involved in the transaction (usually the acquirer or the target) has generated turnover in Germany that exceeds €25 million (para 35(1)(2) ARC). A second domestic turnover threshold was added on 25 March 2009, so that now a further party involved in the transaction must generate turnover in Germany exceeding €5 million.5 Therefore, in future it will generally be necessary for the target to generate turnover in Germany in excess of €5 million before a transaction must be notified to the Bundeskartellamt (the German Federal Cartel Office – 'BKartA').

If, however, a transaction prima facie triggers an obligation to file a notification with the BKartA because the relevant turnover thresholds are met, the transaction need not be notified if the German de minimis exception (known as the Bagatellmarktklausel and found in para 35(2)(2) ARC) applies. This de minimis exception will apply if the market under consideration has existed for at least 5 years (in terms of goods or services being sold on a commercial scale) and the turnover generated in that market did not exceed €15 million in the last calendar year.

The Bagatellmarktklausel is intended to exclude the application of the German merger control regime to markets of insufficient economic importance.6 One of the main reasons for this is to ensure that the principle of proportionality is respected.7 The turnover thresholds contained in para 35(1) ARC, which only refer to turnover generated by the parties to the merger, did result (prior to the reform in March 2009) in the BKartA needing to review a large number of benign mergers.8

The second major reason for the Bagatellmarktklausel is to relieve pressure on the BKartA.9 It is intended that the BKartA should both have the capacity to review a large number of straightforward merger filings within the reasonably tight one month deadline from receipt of a complete filing (Phase I – para 40(1) ARC) as well as to have sufficient resources at its disposal to deal with the much more complex Phase II cases.

A third major reason for the Bagatellmarktklausel is to ease the burden on merging parties.

After this brief comparative analysis, the article will focus on the de minimis exception as it has been applied by the OFT in recent times. The statutory context of the de minimis exception is set out below.

STATUTORY CONTEXT OF THE DE MINIMIS EXCEPTION

It is important to put the de minimis exception in its statutory context because a market (or markets) being of insufficient importance is only one of a number of reasons that the OFT may use to decide to make an exception to its duty to refer potentially problematic mergers to the CC. This also explains why the Draft Guidance concerning the de minimis exception (analysed in more detail below) is entitled Mergers – exceptions to the duty to refer and undertakings in lieu.10 In relation to completed mergers there is one other reason not to refer, and in relation to anticipated mergers there are two other reasons not to do so.

The relevant provisions of the EA are s 22 (for completed mergers) and s 33 (for anticipated mergers).

As set out briefly above, the OFT has a duty to refer both completed and anticipated mergers to the CC if the merger gives rise to a realistic prospect of an SLC. The legal bases for this are ss 22(1) and 33(1) of the EA, respectively.

However, a completed merger that gives rise to a realistic prospect of an SLC need not be referred by the OFT if (i) the de minimis exception applies (s 22(2)(a) of the EA) or, (ii) any 'relevant customer benefits' outweigh the SLC and any adverse effects connected to the SLC (s 22(2)(b) of the EA).

Sections 33(2)(a) and 33(2)(c) of the EA provide the same exceptions for anticipated mergers as for completed mergers, and s 33(2)(b) adds another exception which, by its very nature, cannot apply to completed mergers. This is that arrangements for the anticipated merger are not sufficiently advanced to justify a reference to the CC.

HISTORICAL DEVELOPMENT OF OFT GUIDANCE CONCERNING THE DE MINIMIS EXCEPTION

OFT Guidance (2003)

For a number of years after the EA came into force, the de minimis exception languished on the statute books without being applied by the OFT in a single case. This was primarily because of the very restrictive substantive merger assessment guidance document that the OFT published in 2003 (the 2003 Guidance).11 In that document, the OFT noted that the exception was likely to apply 'only very rarely'.12 The 2003 Guidance also set out that a CC reference would cost approximately £400,000 (although not specifically mentioned, the assumption was that the cost referred to was the cost to the public purse rather than to the merging parties). The 2003 Guidance explained that the purpose of the de minimis exception was to avoid references to the CC where such a reference would be disproportionate to the size of the market concerned. As the implication was that the de minimis exception could only be applied to markets of less than £400,000 in size, it is unsurprising that the OFT did not use it.

OFT Guidance (2007)

A very narrow application of the de minimis exception was always going to risk leading to mergers being referred to the CC even when, looking dispassionately at the issues, it might have been felt that the CC's resources could be better used elsewhere. This risk increased significantly after the Court of Appeal's 2004 judgment in IBA Healthcare Ltd v Office of Fair Trading that concerned the threshold required for the OFT to refer a merger to the CC.13 The Court of Appeal held that the relevant OFT guidance at that time had set the threshold at too high a level by requiring a 'significant' prospect of an SLC. The OFT therefore amended its guidance to reflect the Court of Appeal's judgment, and from that point on, a 'realistic' prospect of an SLC was sufficient for the OFT to be able to refer a merger to the CC.

As the effect of the Court of Appeal's judgment had clearly been to lower the reference threshold, the OFT became increasingly concerned that more and more mergers would need to be referred to the CC, particularly as the de minimis exception in its (then) narrow form would do little to stop this trend.

Therefore, in June 2007, the OFT launched a consultation on draft changes to the guidance on markets of insufficient importance. The headline point was that the OFT proposed to increase the market size threshold of £400,000 by a factor of 25 to £10 million. The OFT's press release announcing the consultation was quite clear on the reasons behind the proposal:

'The OFT decided to review its guidance in this area because it was concerned that an unduly narrow interpretation of the exception might result in mergers being referred to the [CC] where the risk of consumer harm was low and any adverse effect there might be would be small-scale. In such cases the costs involved potentially outweigh any benefit of intervention.'14

The OFT was, however, wary of allowing too many mergers in small markets to be waved through on de minimis grounds. It is for this reason that the OFT introduced what the author will refer to as 'clawback' options, in other words situations in which the merger could be referred to the CC notwithstanding that the market size is below the £10 million threshold. Although the OFT had hinted at this strategy in its 2003 Guidance,15 the draft guidance published in June 2007, and the revised guidance published in November of that year (the 2007 Guidance),16 for the first time spelled out specifically the situations in which the OFT would consider 'clawing back' a case and referring it to the CC despite the possible applicability of the de minimis exception.

The 2007 Guidance refers to four situations in which the OFT may consider not applying the de minimis exception despite the small size of the market.17 First, where the market in question is highly concentrated and significant barriers to entry and/or expansion exist, the OFT may consider that a merger gives rise to adverse effects which will last longer than usual (resulting in consumer detriment) because of the structure of the market. Secondly, the OFT is more reluctant to use the de minimis exception where there is evidence of coordination. Similarly to the first situation referred to above, the OFT may consider that a market in which coordination exists will be more susceptible to adverse effects created by a merger in that market.

Thirdly, the OFT notes that where a case may have important precedent value for the industry concerned or generally, a decision may be made to refer the merger to the CC to allow the precedent value to be created by an in-depth CC analysis. Finally, and in the only nod by the OFT to the 2003 Guidance (which had set out somewhat different reasons for not using the exception), if vulnerable consumers are likely to bear the brunt of the adverse effects created by the merger, this may also be a reason for the OFT to refer the merger to the CC.

Businesses and their legal advisers have always been keen to understand in as much detail as possible how the OFT will exercise its discretion in de minimis matters. There are a number of reasons for this: first, the language in the relevant sections of the EA (analysed above) does not provide any clues as to which factors the OFT should take into consideration when examining mergers in markets of insufficient importance. Secondly, particularly for completed mergers, the risks of the merger being referred to the CC, and the 'unscrambling of the eggs' that may follow, are significant.18 Therefore, while welcoming the OFT's 2003 and 2007 Guidance, there were calls from some quarters for the OFT to set out in a more practical manner how the OFT would consider possible de minimis issues.

An interesting development in this regard was the presentation given by a senior OFT official (speaking in a personal capacity) at a conference in November 2008. The official referred to a 'graphic equaliser', and explained that one could imagine the OFT's analysis as being equivalent to plotting points on a graph and being led by the outcome. There were, according to the senior OFT official, five key factors that the OFT took into account:

  1. size of the market;
  2. probability of harm;
  3. magnitude of effect;
  4. durability; and
  5. deterrence multiplier.

When merging businesses and their legal advisers wished to predict how the OFT may decide to exercise its de minimis discretion (assuming the market was smaller than £10 million), they should plot on a page, where the left hand side represents low values and the right hand side represents high values of the five criteria, where the transaction at issue would sit. Then, depending on whether the majority of plotted locations are on the left hand side or the right hand side of the page would give an indication as to whether the OFT would use the de minimis exception or not.

This novel way of explaining the OFT's approach in de minimis cases was helpful from the point of view that it gave some practical meaning to what were relatively abstract principles in the 2007 Guidance.

However, it soon became obvious that the OFT was starting to diverge from its 2007 Guidance in practice, and the de minimis-related decisions that the OFT started to make at that time (from December 2007 onwards) became – until recently – the best source of information on how the OFT applied its discretion in de minimis cases. This was also because the OFT's decisional practice introduced a number of new concepts that were not referred to in either the 2003 Guidance or the 2007 Guidance. It is the OFT's decisional practice, which one leading commentator has referred to as 'the most dynamic area of UK merger control',19 to which the author now turns.

RECENT OFT DECISIONAL PRACTICE CONCERNING THE DE MINIMIS EXCEPTION

Barely a month after the 2007 Guidance was published in November 2007, the OFT used the de minimis exception for the first time in two cases in the passenger transport sector.20 The OFT's decisions in these two cases were not controversial as the two markets affected were genuinely de minimis (less than £1 million and just over £1 million, respectively). The passenger transport sector has been a productive area for the OFT's decisional practice in de minimis cases, as a further two cases were decided on that basis in 200821 and another one in 2009.22 Part of the reason for this may be that the relevant markets in such cases are generally very small, and the parameters of competition in such markets are somewhat different from other markets and so the OFT may therefore feel more comfortable in applying the de minimis exception. In the other approximately half a dozen cases in which the OFT has exercised its de minimis discretion, the markets have been very narrowly defined with the result that the market size was small enough to give the OFT no concern in applying the exception.23

However, it is also interesting to note that there have been nearly 10 cases in which, although the OFT has considered applying the de minimis exception, it has not done so for a variety of reasons. This article will analyse three categories of reasons that the OFT has recently used:

  1. 'clawback';
  2. undertakings in lieu; and
  3. other reasons.

'Clawback'

As set out above, where the OFT is concerned that despite a small market size a merger may nevertheless give rise to adverse effects of a nature sufficiently serious to warrant a reference to the CC, the OFT can refuse to apply the de minimis exception. Two recent cases illustrating the OFT's approach are dealt with below.

BOC/Ineos Chlor

In this case, Ineos Chlor wished to acquire BOC's packaged chlorine business. The UK market for packaged chlorine had a value of £5.5 million, and the transaction was therefore clearly eligible for the OFT to apply the de minimis exception. However, the transaction attracted significant critical third party comments, primarily from customers who were concerned about an already highly concentrated market becoming even more so by removal of BOC. This was of particular concern to many third parties because BOC was a relatively new entrant which had entered as a 'maverick', and competition between the merging parties was said to be one of the key features of the market's competitive dynamic. Therefore, many third parties feared that higher prices and reduced service levels could result from the merger, and due to the market structure it would take a longer time than normal for the market to correct itself through the ordinary competitive process. Against that background, the OFT decided that a reference to the CC was justified in the circumstances of the case.24

Nufarm/AH Marks

The reason why this case is interesting is because the OFT's decision clearly sets out the process of analysis that the OFT went through while considering the de minimis issues.

In this case Nufarm, an Australian farm chemicals group, acquired AH Marks, a UK-based competitor. The relevant markets consisted of various types of manufacturing concentrate, and were worth between £3 million and £8 million in total.

The OFT considers that the 'pivotal issue' in determining whether to use the de minimis exception depends on 'whether the impact of the merger is likely to be particularly significant'.25 The Nufarm/AH Marks case is also one of the sources of the factors referred to in the description of the 'graphic equaliser' above. The OFT analysed the market size, the strength of its competition concerns (based on its investigation, including third party views), the magnitude of competition lost through the merger, the durability of the merger's impact and the value of deterrence that would be achieved by both:

  1. use of the de minimis exception; and
  2. a reference to the CC.

As in the BOC/Ineos Chlor case, although the de minimis exception was available in principle, the OFT concluded that using the de minimis exception would not be appropriate in this case because the transaction would lead to a monopoly in some affected markets.

Undertakings in Lieu

In a line of cases starting in February 2008, the first of which was Dunfermline Press/Trinity Mirror,26 the OFT established the principle that the de minimis exception is not available where the parties are able to offer clear-cut undertakings in lieu to deal with the competition issues identified. As the reasons behind this policy may not be immediately obvious, it is worth analysing this in more detail.

Essentially, this is one of a number of situations in competition law where the well-intentioned aim of one policy may cut across another policy. One of the most well-known of these dilemmas in competition law (in a non-merger context) is how to balance a desire for more private enforcement (damages actions) with a well-functioning leniency policy. In the merger context, the OFT was concerned that excessive use of the de minimis exception, particularly once the threshold had been raised under the 2007 Guidelines, would undermine the benefits flowing from the OFT's undertakings in lieu policy. Undertakings in lieu allow the OFT to clear a merger that in principle gives rise to competition concerns (in lieu of referring such a merger to the CC) where the merging parties agree to undertakings that will deal with the competition concerns in an appropriate manner. This is equivalent to the Phase I commitments procedure under the Merger Regulation.27 The OFT believes that a case that is concluded by undertakings in lieu results in customer benefits both in relation to the merger being reviewed as well as in other similar cases (ie deterrence). Therefore, the OFT concluded in Dunfermline Press/Trinity Mirror that it was justified to adopt a policy whereby it will not use the de minimis exception if clear cut undertakings in lieu are, in principle, available. The OFT emphasised that this was particularly because the facts of the case very much supported undertakings in lieu:

'[...] this case appears to fit the classical profile of the OFT's undertakings in lieu cases: a small proportion of a larger benign or even beneficial transaction raises concerns, and those concerns can be addressed structurally by means of a divestiture package.'28

Other Reasons

The OFT has refused to use the de minimis exception in a number of other cases for a variety of other reasons. For example, in the Stagecoach/Preston Bus merger, the merging parties attempted to persuade the OFT that a particular market definition was the correct one. If that market definition had been accepted, the market size would have been below the £10 million threshold. However, the OFT disagreed with the merging parties' submissions on this point, and on the basis of the market definition preferred by the OFT, the de minimis exception could not apply as the market size considerably exceeded the threshold.29

OFT 'EXCEPTION TO THE DUTY TO REFER' CONSULTATION

The latest development in the area of de minimis in UK merger control is that the OFT has consulted on the Draft Guidance that aims to consolidate the OFT's current practice into a single document and to further explain the manner and circumstances in which the OFT may (or indeed may not) apply the de minimis exception.30 The OFT launched the consultation on the Draft Guidance on 1 October 2009 and the consultation ran until the middle of January 2010. The consultation in fact deals with all exceptions to the duty to refer and therefore also covers, for example, undertakings in lieu. As far as the author is aware, the Draft Guidance has generally been welcomed as a helpful statement of the OFT's intent in de minimis matters going forward, although some concerns have been raised about the detail of some of the proposals. The OFT intends to publish the final version of the guidance this spring after having reviewed and considered the responses received.

The Draft Guidance sets out one of the key messages, namely the description of the OFT's overall approach, in para 2.6 as follows:

'[...] the OFT [takes] the view that it is proportionate – and therefore justifiable – to refer a merger where the benefits of that reference, in terms of preventing or remedying the consumer harm that would otherwise result from the merger if the CC found a substantial lessening of competition, exceed the costs to the public purse of the reference.'

The key features of the Draft Guidance include the following:

  • the OFT intends to continue to adopt (as it has done in the past) a broad cost/benefit analysis when considering whether or not it should apply the de minimis exception;31
  • the OFT has resisted calls from the business community for a firm 'safe harbour' to be established. In other words, the OFT is not willing to commit to always exercising its de minimis discretion when a merger concerns a market below a certain specified size;32
  • nevertheless, the Draft Guidance confirms that the OFT will 'generally' apply the de minimis exception where the size of the affected market is smaller than £3 million.33 This is largely consistent with its decisional practice in de minimis cases so far;
  • the Draft Guidance states that it is unlikely that the de minimis exception will be applied in cases where the size of the affected market is larger than £6 million;34
  • in terms of defining which market(s) or parts of it (them) are relevant for the market size calculation, the Draft Guidance re-affirms what has been OFT practice thus far, namely that it is only the turnover associated with market(s) or parts of it (them) where there is a realistic prospect of an SLC.35 Although consistent with OFT practice, there is nothing in the EA that supports this approach;
  • the Draft Guidance for the first time specifically incorporates the Dunfermline Press line of cases on undertakings in lieu policy;36 and
  • the Draft Guidance confirms that, in cases of genuine uncertainty, the OFT is open to receiving requests for informal advice.37

In paras. 2.50–2.10 of the Draft Guidance, the OFT then sets out the factors that it will take into account in its broad cost/benefit analysis.

First, the OFT will consider the question of undertakings in lieu or, in other words, whether a suitable and clear cut remedy is available.38 The OFT goes into some detail about the factors it will take into account in this regard, and this is also necessary as it has not been entirely clear from previous OFT cases how the analysis works. This is because the OFT does not consider remedies that would amount to prohibitions to be suitable undertakings in lieu for these purposes. It is easy to see each side of the spectrum, ie ranging from the divestment of a small, structurally separate business that is the sole source of the overlap (and hence the competition concern) to the divestment of the entire business due to be acquired. However, there are a large number of shades of grey between these two extremes, and the OFT has attempted to shed some light on how it will deal with these situations. Whether the Draft Guidance is sufficient in this regard in its present state is a matter of debate.

Secondly, the OFT will consider whether the consumer harm that may result from the merger materially exceeds the costs of a CC reference.39 The 'graphic equaliser' factors referred to above will be relevant in this regard.

Finally, the OFT will undertake a proportionality analysis,40 something that it would previously have considered under the 'deterrent effect' heading.

To the author's mind, there are three major issues around which there are some concerns.

The first relates to the OFT's refusal to consider a firm 'safe harbour', a concept that the business community would very much welcome because it would remove what is alleged to give rise to a chilling effect on small deals at the present time. In the Draft Guidance, the OFT puts forward several arguments as to why it is opposed to a firm 'safe harbour', including the fact that such a safe harbour would be contrary to its discretion (guaranteed by statute) in de minimis matters and the fact that small mergers can also give rise to significant adverse effects for consumers over long periods of time.41 While there is nothing inherently wrong in the OFT's arguments, the author submits that the OFT's position is inconsistent with the positions taken by a number of other competition authorities in the EU on the same question. For example, as explained in above, the Bagatellmarktklausel in German law results in the fact that if its conditions are satisfied, the merger simply need not be notified to the BKartA – in other words, that is a firm 'safe harbour', and it is not entirely clear why the OFT cannot take the same approach. Secondly, some commentators have questioned how realistic the OFT's fears that a merger in a small market can give rise to significant adverse effects really are. Essentially, it comes down to the question of whether the possible effects of the merger are such that the OFT should refer the merger to the CC, with all the costs (both to the public purse and to the parties) that result from such a referral.

The second major issue relates to the OFT's creation of arguably unnecessary complexity in the market size thresholds. Whereas the 2007 Guidance simply noted, in para 7.6, that: 'Below the £10 million market size threshold, the OFT would generally consider the market to be of insufficient importance to justify a reference, subject to the caveats [referred to below]', the Draft Guidance has created a more complex regime. As noted above, the Draft Guidance in effect creates three thresholds:

  • under £3 million: the OFT will generally exercise its de minimis discretion;42
  • over £6 million: the OFT is unlikely to exercise its de minimis discretion;43
  • over £10 million: the OFT is very unlikely to exercise its de minimis discretion except in very narrowly defined exceptions44 (which, in the author's opinion, are in any event inconsistent with previous OFT practice on this point).

The author would argue that, if the OFT is concerned about unduly limiting its discretion by setting a firm 'safe harbour', it is not much better to set seemingly rather random interim thresholds while continuing to have a broad discretion in any event. In that case, it seems to the author to be much better to revert to the situation as it was under the 2007 Guidance. This would simply allow the OFT to take a view on a broad cost/benefit analysis whether it should apply the de minimis exception to a market smaller than £10 million – there does not seem to be much to be gained from interim thresholds that are subject to the OFT's broad discretion.

The third major issue relates to whether the interaction between the de minimis exception and the policy on undertakings in lieu is sufficiently clear. There is certainly a sensible rationale behind the OFT's 'Dunfermline Press' policy on undertakings in lieu. However, the question of when the OFT will consider that suitable undertakings in lieu (that do not go to the heart of the transaction) are available is a matter which, despite further explanation in the Draft Guidance,45 could do with some more explanation. The OFT has noted in the Draft Guidance that it will take a 'conservative approach' to these questions.46 However, to illustrate the kind of issues that could arise (and on which the Draft Guidance is currently not sufficiently clear), for example, what happens in cases where the undertakings in lieu may be clear cut only if they straddle problematic and unproblematic aspects of the deal?

CONCLUSION

The concept of de minimis in UK merger control has developed at great speed in the last couple of years; since late 2007, there have been a significant number of OFT decisions in which the exception has either been used or considered, and from a two-paragraph treatment in the 2003 Guidance, the exception is now described and explained in detail by the Draft Guidance. Clearly, the system will need a bit more time to bed down and it is welcome that the OFT is seeking to keep up by ensuring that it provides timely and detailed guidance on an exception that will likely continue to become more important.

The issues referred to above should not detract from the fact that the Draft Guidance, when finalised in due course, will play a key role in ensuring that businesses and their legal advisers are as clear as they can be in predicting how the OFT is likely to react to encouragement from the merging parties to clear their transaction on de minimis grounds.

Footnotes

1. Associate, EU & Competition Department, SJ Berwin LLP. This article is based on a presentation given at the Fourth Junior UK Competition Practitioners Conference at the Competition Commission, London on 4 December 2009.

2. The consultation is detailed on the OFT's current consultations page, available at: http://www.oft.gov.uk/advice_and_resources/resource_base/consultations/current/exceptions. A copy of the Draft Guidance is available at: http://www.oft.gov.uk/shared_oft/consultations/oft1122con.pdf.

3. See, for example, Peter Freeman's speech 'Merging is such sweet sorrow' to the British Institute of International and Comparative Law (BIICL) Mergers Conference, 13 November 2008, published on the Competition Commission's website at http://www.competition-commission.org.uk/our_role/speeches/pdf/freeman_biicl_131108.pdf.

4. Sections 96–100 of the Enterprise Act 2002.

5. The second domestic turnover threshold was introduced by the Third Mittelstandsentlastungsgesetz (Third Law for the Reduction of Burdens on Medium-sized Enterprises), Federal Law Gazette, Part 1 No 1 dated 24 March 2009, available at http://frei.bundesgesetzblatt.de/index.php?teil=I&jahr=2009&nr=15.

6. Government's reasoning for the de minimis exception, BT-Drucks. VI/2520, p 32; Federal Supreme Court, judgment dated 11.7.2006 – KVR 28/05, WuW/E DE-R 1797, at para 14, Deutsche Bahn/KVS Saarlouis; Burholt, WuW 2005, 889, 892.

7. Federal Supreme Court, judgment dated 19.12.1995 – KVR 6/95, WuW/E BGH 3037, at para 23, Raiffeisen; Bechtold (Kartellgesetz, 5th edn, 2008), at § 35 side number 33; Mestmäcker/Veelken in: Immenga/Mestmäcker, (Wettbewerbsrecht GWB, 4th edn, 2007), at § 35 side number 33.

8. In 2007, a total number of 1,675 notifications were made to the BKartA according to its bi-annual report 2007/2008, available at http://dip21.bundestag.de/dip21/btd/16/135/1613500.pdf. According to Podszun, over 90% of those notifications did not give rise to competition issues, ZRP 2007, 269, 271. See also Podszun, GRUR Int 2008, 204, 205 and further materials cited there.

9. Mestmäcker/Veelken op cit n 7, above, at § 35 side number 36; Fuchs, WuW 2008, 774, 776.

10. See n 2, above.

11. OFT, Mergers – substantive assessment guidance, OFT 516 (May 2003) (the 2003 Guidance), available at: http://www.oft.gov.uk/shared_oft/business_leaflets/enterprise_act/oft516.pdf.

12. Ibid, at para 7.5, p 44.

13. [2004] EWCA Civ 142, [2004] 4 All ER 1103.

14. OFT, OFT consults on revised guidance in merger cases, press release 84/07 (18 June 2007), available at: http://www.oft.gov.uk/news/press/2007/84–07.

15. '[...] in the majority of cases where a substantial lessening of competition is identified, it will be appropriate for the CC to investigate', 2003 Guidance, op cit n 2, above, at para 7.5, p 44.

16. OFT, Revision to mergers – substantive assessment guidance, exception to the duty to refer: markets of insufficient importance, OFT 516b (November 2007), available at: http://www.oft.gov.uk/shared_oft/business_leaflets/enterprise_act/oft516b.pdf.

17. Ibid, at paras 7.7 and 7.8.

18. See, eg, the BOC/Ineos Chlor case, in which a CC prohibition was the end result. Competition Commission, BOC and Ineos Chlor – a report on the anticipated acquisition by BOC Limited of the packaged chlorine business and assets of Ineos Chlor Limited (18 December 2008), available at: http://www.competition-commission.org.uk/rep_pub/reports/2008/fulltext/540.pdf.

19. A Lindsay, 'UK merger control: recent developments' [2010] ECLR 116.

20. OFT Decision, National Express Group plc/Intercity East Coast Rail franchise (Case ME/3306/07) 20 December 2007, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/NationalExpress.pdf; and OFT Decision, Arriva plc (through Arriva Trains Cross Country Limited)/Cross Country Passenger Rail Franchise (Case ME/3294/07) 20 December 2007, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/361227/Arriva2.pdf.

21. OFT Decision, Stagecoach Group plc/East Midlands passenger rail franchise (Case ME/3291/07) 4 February 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/stagecoach.pdf; and OFT Decision, Stagecoach Bus Holdings Limited/Cavalier Contracts Limited (Case ME/3703/08) 18 September 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/Stagecoach2.pdf.

22. OFT Decision, Completed acquisition by Govia Limited of South Central Passenger Rail Franchise (Case CR/39/09) 6 August 2009, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2009/Govia.pdf.

23. OFT Decision, FMC corporation/the alginates business of ISP holdings (UK) Limited (Case ME/3688/08) 30 July 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/FMC.pdf; OFT Decision, Chiral Technologies Europe SAS/Chromtech Limited (Case ME/3787/08) 24 September 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/Chiral.pdf; OFT Decision, Orbital Marketing Services Group Ltd/Ocean Park Ltd (Case ME/3863/08) 14 November 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/Orbital-Ocean.pdf; OFT Decision, Anticipated acquisition of Lochard Ltd by Spectris plc (Case ME/3911/08) 29 January 2009, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2009/Spectris.pdf; and OFT Decision, Prince Minerals Limited/Castle Colours Limited (Case CR/019/09) 6 May 2009, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2009/Prince_Minerals.pdf.

24. OFT Decision, BOC Limited/the packaged chlorine business and assets carried on by Ineos Chlor Limited (Case ME/3624–08) 29 May 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/BOC.pdf.

25. OFT Decision, Nufarm Limited/AH Marks Holdings Limited (Case ME/3699/08) 29 August 2008, available at: http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/Nufarm.pdf, at para 93.

26. OFT Decision, Dunfermline Press Limited/the Berkshire regional newspapers business from Trinity Mirror plc (Case ME/3315/07) 4 February 2008, available at http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/dunfermline.pdf.

27. Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (2004) OJ L 24/1 (Merger Regulation).

28. OFT Decision, Dunfermline Press Limited/the Berkshire regional newspapers business from Trinity Mirror plc (Case ME/3315/07) 4 February 2008, available at http://www.oft.gov.uk/shared_oft/mergers_ea02/2008/dunfermline.pdf, at para 115.

29. OFT Decision, Stagecoach Group plc/Preston Bus Limited (Case ME/4032/09) 28 May 2009, available at http://www.oft.gov.uk/shared_oft/mergers_ea02/2009/StagecoachPreston.pdf, at paras 105–111.

30. Op cit n 2, above.

31. Ibid, at paras 2.5–2.10.

32. Ibid, at para 2.2.

33. Ibid, at para 2.14.

34. Ibid, at fn 6.

35. Ibid, at para 2.30.

36. Ibid, at paras 2.18–2.27.

37. Ibid, at para 2.54.

38. Ibid, at paras 5.9–5.13.

39. Ibid, at para 2.6.

40. Ibid, at para 2.21.

41 Ibid, at para 2.13.

42 Ibid, at para. 2.14.

43 Ibid, at fn 6.

44 Ibid, at para 2.30 and fn 13.

45 Ibid, at paras 2.22–2.27.

46 Ibid, at para 2.27.

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