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The First Year of the CMA

Andrea CoscelliExecutive Director, Markets and Mergers

In-house Counsel Association Meeting26th February 2015

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Organisational Structure

Andrea Coscelli,Executive Director,

Markets and Mergers

Sonya BranchExecutive Director,

Enforcement

Sector Regulation

Unit

Mergers Phase I

Cartels & Criminal Group

Competition, Consumer and Markets Group (CCMG)Market Studies

Market InvestigationsPhase II Mergers

CA98 CasesConsumer Cases

Regulatory Appeals

Alex ChisholmCMA Chief Executive

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Current Mergers

● Main Phase I Mergers:

- East Coast Mainline (rail)

- 99p/Poundland

- Green King/Spirit (pubs)

- Ashford/St Peter’s (hospitals)

- BT/EE

- Dairy Crest/Muller (dairy)

● Phase II Mergers:

- Pork Farms/Kerry CSP Assets (Pork Pies)

- Reckitt Benckiser/KY (Lubricants)

- Xchanging/Agencyport (Software)

- Sonoco/Weidenhammer (Packaging)

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Financial year 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 13/14 14/20 Feb 2015

Referred 18 17 13 10 8 7 8 9 14 8 6UIL accepted 5 6 7 5 6 5 4 5 10 0 4

Unconditional clearances  - 'de minimis' exception

1030

1180

860

783

534

437

434

623

494

423

496

Found not to qualify

45 69 22 15 9 10 14 21 23 12 10

Total decisions 171 210 128 111 80 72 73 100 100 65 75

Cases to CRM 35 36 30 22 29 22 21 30 32 19 21

IU – IEO 6 10 10 10 11 10 9 25 23 26 29

Phase 1 statistics

Name Sector Date of decision Date referred

Diageo/United Spirits Food manufacturing 25 November 2013 UILs accepted 31 October 2014

Pure Gym/The Gym Recreation and Leisure

26 June 2014 26 June 2014 – merger abandoned

Xchanging/Agencyport

Electronics/software

2 December 2014 8 December 2014

Pork farms/Kerry Foods

Food manufacturing 17 December 2014 5 January 2015

Reckitt Benckiser/K-Y Brand

Healthcare 19 December 2014 7 January 2015

Motor Fuel/Murco Petrol Stations 22 December 2014 UILs accepted 16 February 2015

Sonoco/Weidenhammer

Packaging 13 January 2015 27 January 2015

Immediate Media/ Future Publishing

Magazines 31 October 2014 UILs accepted 6 January 2015

East Coast Rail franchises 6 February 2015 UILs accepted 20 February 2015

Ashford St Peter's/Royal Surrey

Healthcare and medical equipment

18 February 2015 Provisional decision to refer

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SLC decisions (2014/15)

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● We are committed to monitoring all industry sectors● Our Mergers Intelligence Committee (MIC) has undertaken

a systematic review of transactions (over 500 since 1 April)● 18 of 75 decisions since 1 April were a result of the MIC● Nine of these went to CRM and two were referred –

Xchanging/Agencyport and Sonoco/Weidenhammer● The number of MIC decisions found not to qualify (‘FNTQ’)

remains low, with only three since 1 April 2014 (compared to 5 in 2013/14, 14 in 2012/13 and 15 in 2011/12).

Merger enforcement

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Market Investigations

Project Start - Anticipated End Date

Current Stage

Payday Lending June 2013 - June 2015

Published Final Report: February 2015

Energy June 2014 -December 2015

Publication of updated issues statement and working papers: February 2015

Banking November 2014 - May 2016

Publication of working papers and annotated issues statement: March to June 2015

Private Healthcare Remittal

January 2015 - Remittal initiated

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CFIs/Market Studies/Policy Projects/Reg Appeals

Project Instrument Start - Anticipated End Date

Current Stage

Online Reviews and Endorsements

Call for Information and Consumer Enforcement (CPRs)

February 2015 – June 2015

Launch CFI: 26 February 2015

Consumer Data Call For Information

January 2015 – May 2015

Survey ongoing: Feb – March 2015

Rail Services Policy Project January 2015 – October 2015

Bristol Waters v Ofwat

Regulatory Appeal

March 2015 - Appeal by Bristol Waters in relation to Ofwat’s Price Determination

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CA98 Cases OverviewProject Start -

Anticipated End Date

Current Stage

Pay for Delay August 2011 – June 2015

Supplementary Statement of Objections was issued October 2014. CMA to consider parties’ written and oral representations before taking any decision as to whether competition law has in fact been infringed.

Project Stock June 2014 – May 2015

Evidence gathering and work towards Stop/Go in March/April 2015.

Commercial Catering

August 2014 – June 2015

Evidence gathering and carrying out further investigatory steps such as analysis, information requests and stakeholder meetings. Working towards another Stop/Go decision in June 2015

Bathroom Fittings

August 2014 – June 2015

Gathering evidence and earlier this month we took a decision to continue with the case. Over the coming months, we will be engaging in further investigation, including analysis and potential further information requests and stakeholder meetings.

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Project Start - Anticipated End Date

Current Stage

Conduct in the healthcare sector

July 2014 – April 2015

Further evidence gathering analysis and review

Property sales and lettings investigation

December 2013 – June 2015

Opportunity for parties to make written and oral representations on the matters contained in the statement of objections

Supply of galvanised steel tanks for water storage

January 2015 Continuing the investigation into suspected cartel conduct in respect of the supply of galvanised steel tanks for water storage

Supply of pharmaceutical products

May 2013 The CMA has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a Statement of Objections. If the CMA does issue a Statement of Objections, it will provide an opportunity for written and oral representations.

CA98 Cases Overview

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Matrix working: a breakdown

(inc. pipeline, remedies, policy work)

Compliance – a CMA priority

“The more we can promote awareness of competition and consumer law and a culture of compliance amongst firms, the more we can demonstrate that those firms who do not comply merit serious punishments.”

Alex Chisholm, CMA Chief Executive

• The CMA recognises that most businesses wish to comply with competition law… …and is keen to help such businesses to do so

• When compliance is the norm it enables greater enforcement targeting• Compliance and deterrence are complementary• Compliance generates intelligence about others’ anti-competitive behaviours

Why is compliance a priority?

A virtuous circle

Compliance – our approach

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1. Pushing compliance up the corporate agenda: reaching boards via partners

• Organisations representing businesses

• Professional representative bodies

2. Taking lessons learned, from cases and markets work, to change business behaviour

• Mercedes cartel case – taking lessons learned to the franchised motor dealer sector

3. Strengthening tools & techniques to communicate our messages effectively

• Targeted, accessible, relevant information (e.g. case studies, 60 second summaries, open letters)

4. Using research to target companies and activity for greater impact

• SME’s, specific anti-competitive behaviours (e.g. bid-rigging, unlawful sharing of market information)

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Strategic Assessment

● Factors that may inhibit consumers’ ability to access markets, or derive the benefits that should be available to them in doing so, and issues that may affect consumers’ decision-making

● Online markets and the digital economy

● Emerging sectors and business models, and in particular the effects of technological development

● Regulated sectors and infrastructure markets

● Markets for public services

● Markets with significant potential to affect overall economic growth