UK Competition and Market Authority’s consultation on merger remedies confirms greater flexibility

For a period after Brexit, the UK Competition and Markets Authority (CMA) was the world’s most feared competition agency, (in)famous for blocking global deals and stretching a malleable legal framework to claim jurisdiction even in marginal cases, for example, acqui-hires (Microsoft/Inflection AI) and transactions with limited UK nexus (Sabre/Farelogix). The high-water mark came in 2023, when the CMA blocked Microsoft’s USD 70 billion acquisition of Activision before reversing course a few months later after an excoriating backlash. One might argue that this one case effectively “broke” the UK’s merger control regime. The truth is that the Microsoft/Activision decision was finely balanced but – unfortunately for the CMA – it became emblematic of the authority’s perceived overreach. 

As part of its continuing atonement, the CMA published its draft revised merger remedies guidance (Draft Revised Guidance) and consultation document on 16 October 2025, following a call for evidence earlier in the year. The CMA’s proposals signal a more flexible approach to merger remedies, in particular, behavioural remedies (including at Phase 1) – a trend already evident in the CMA’s recent merger decisions. It is not ideal that the CMA’s current published Guidance on Merger Remedies (Current Guidance) is significantly out of line with current practices, so the updated guidance will be welcome. Assuming the Draft Revised Guidance is adopted, it suggests that merging parties may receive more latitude to resolve competition concerns with remedies, including at an earlier stage in the merger investigation. A consultation on the Draft Revised Guidance is open until 13 November 2025.

The CMA’s review of its merger remedies process is part of the broader overhaul of the UK’s merger control regime – a process that started last year and was given additional impetus by the UK Government’s sacking of the CMA’s Chair in January 2025 and its ‘Strategic Steer’ directing the CMA to prioritise growth, investment, and business confidence in the UK’s competition and consumer regime. It seems to be assumed by the Government that mergers – even mergers in concentrated industries – are good for economic growth.

In response, the CMA has been systematically assessing whether the way it operates and engages with business can be improved by reference to a new “4Ps” framework focused on improving proportionality, pace, predictability, and process. The CMA launched a formal review of its merger remedies process in March 2025 with the 4Ps in mind.

The mood music emanating from the CMA’s reflections on the consultation is harmonious: where mergers raise potential competition concerns, the CMA wants to work constructively with businesses to identify quickly whether there is an effective and proportionate remedy that would allow the parties to get on with implementing the deal and running their business. This openly business-friendly attitude directly aligns with the Government’s ‘Strategic Steer’.

Seven takeaways about the CMA’s evolving approach to merger remedies can be drawn from the Draft Revised Guidance and consultation document. These are:

1. More flexibility in how remedies are assessed;
2. Greater openness to behavioural remedies;
3. Acceptance of complex carve-out remedies;
4. More scope for remedies at Phase 1;
5. A role for monitoring trustees in assessing complex remedies;
6. A role for remedies in securing merger efficiencies and benefits; and
7. A more efficient Phase 1 process.

Taken together, these changes have the potential to inject greater flexibility into the CMA’s merger remedies process, which may in turn pave the way for otherwise pro-competitive transactions that have antitrust concerns to be cleared with remedies (including at Phase 1) rather than be blocked (or referred to Phase 2). The CMA’s greater openness to behavioural remedies, in particular, brings the authority’s approach in line with international best practice. For all the changes proposed, however, the CMA will continue to have significant discretion in how its revised merger remedies guidance is applied in individual cases, so it remains to be seen how UK merger enforcement will evolve in practice. The CMA’s pending review of its approach to merger efficiencies will also have a bearing on future enforcement.

Overall, the CMA seems more likely to find a way to clear mergers that once would have been blocked, but the process will not be simple or cheap for merging parties. It will require a significant level of skill to navigate. 

Further details about the seven takeaways from the CMA’s Draft Revised Guidance and latest approach to remedies in merger enforcement are set out below.

1. More flexibility in how remedies are assessed

The CMA retains its sequential framework for assessing merger remedies – looking at effectiveness then proportionality – rather than carrying out a holistic assessment. As before, the CMA will look, first, for remedies that resolve the competition concern arising from the merger (the ‘substantial lessening of competition’ (SLC)) and then for the least costly and intrusive remedy among those found to be effective, while also ensuring that no remedy is disproportionate in relation to the competition concern.

While affirming this two-step framework, the CMA acknowledges that there is more flexibility in the assessment of effectiveness than what is in the Current Guidance and that a wider range of remedies may be acceptable (e.g., behavioural and carve-out remedies). To this end, the Draft Revised Guidance contains more guidance on how the CMA assesses certain types of remedy and how different categories of risk (e.g., composition risks, purchaser risks, assets risks) feed into the effectiveness assessment. The CMA also clarifies the steps involved in the proportionality assessment and confirms its strict approach to ‘mitigations’ – i.e., remedies that do not provide a comprehensive solution to the SLC.

2. Greater openness to behavioural remedies

The Draft Revised Guidance affirms the CMA’s view that structural remedies are likely to be more effective at resolving competition concerns than behavioural remedies, which reflects that structural remedies (e.g., divestiture of an overlapping business) eliminate the source of the SLC, whereas behavioural commitments (e.g., an access remedy) do not. However, the CMA now accepts that behavioural remedies can be effective in “some cases”, i.e., where:

• the remedy has limited duration;
• there is an industry regulator that can monitor and enforce the remedy;
• industry characteristics (e.g., transparency) make it more likely that customers, competitors, and suppliers are better able to report on non-compliance;
• the remedy aligns with existing commercial practice in the industry, which can indicate whether the remedy is workable and understood by stakeholders;
• the industry is mature and stable; and
• the parties appoint and pay for a monitoring trustee to assist the CMA.

The more permissive attitude towards behavioural remedies encoded in the Draft Revised Guidance reflects a trend already apparent in recent CMA merger decisions that were resolved with conduct commitments (e.g., Vodafone/Three, Schlumberger/ChampionX) and brings the CMA’s practice in line with the approach of other international competition authorities, such as the European Commission – also reducing the likelihood for divergent outcomes in parallel merger reviews (such as Microsoft/Activision at the first time of asking).

3. Acceptance of complex carve-out remedies

The CMA has generally been wary of accepting remedies involving the divestiture of something less than an existing standalone business (i.e., a carve-out remedy), given the greater complexity and concerns about viability and effectiveness. The Draft Revied Guidance affirms this position but acknowledges that carve-out remedies “can address the SLC at source”, even though they are “more complex and present additional risks”. The consultation document also notes that, in practice, the CMA commonly considers carve-out remedies, as parties have a commercial incentive to put forward smaller asset packages. However, the Current Guidance says little about when carve-out remedies will be effective.

Under the proposals, the CMA may accept a carve-out solution where the remedy can be adequately specified and does not risk a loss of economies of scale or scope or create risks regarding the transfer of customers to the acquirer (e.g., owing to consent provisions). In addition, the CMA proposes to update its guidance to give merging parties greater clarity on:

• the types of evidence the CMA will use when assessing carve-out remedies (e.g., performance data on comparable divestitures, internal performance data on the assets / business, as well as employee feedback and independent expert evidence); and
• mechanisms to mitigate the risks of complex carve-out remedies (e.g., early engagement with the CMA on a without prejudice basis, use of an upfront buyer or divestiture trustee, use of an independent expert to support the CMA’s remedy assessment, and a requirement for a more extensive fall-back remedy).

The CMA also envisages that the divesting party will warranty that a carve-out remedy includes all assets necessary for the business compete effectively, backed up by a right for the purchaser to acquire additional assets if the initial remedy scope is incomplete.

These innovations are consistent with a more flexible attitude to complex carve-out remedies.

4. More scope for remedies at Phase 1

The CMA’s long-standing practice  reflected in the Current Guidance is that remedies offered at Phase 1 (i.e., undertakings in lieu of a Phase 2 reference (UILs)) must be (i) ‘clear cut’ in terms of addressing any competition concerns raised by the merger and (ii) ‘capable of remedy implementation’. The ‘clear-cut’ standard has often translated into the CMA taking an inflexible approach to Phase 1 remedies – in practice, typically accepting only the simple divestment of a pre-existing business as an effective UIL. Conversely, the CMA has had a presumption against behavioural remedies at Phase 1 on the basis that they are “generally less likely to be considered sufficiently clear-cut”. The view on complex carve-outs is similar.

As a result, transactions with antitrust concerns that could feasibly be remedied at Phase 1 with a behavioural commitment or carve-out remedy may not have left the boardroom or, if they went ahead, were subject to a high-cost Phase 1 remedy that risked undermining the commercial rationale of the deal or had to go through a long, expensive Phase 2 process.

In the changed regulatory environment post-Microsoft/Activision, the policy froideur towards behavioural remedies has already started to thaw, meaning that the Current Guidance does not give a true reflection of the CMA’s current practices. The CMA’s Phase 1 clearance of Schlumberger/ChampionX earlier this year based on a novel licensing remedy (amongst other remedies) is the key example of the current approach, which will now effectively be formalised in the updated guidance [Disclosure: Geradin Partners was involved in this case].

The CMA’s proposals confirm that a wider range of remedies may be accepted as UILs to avoid a Phase 2 reference. While the CMA has not lowered the ‘clear-cut’ standard for Phase 1 remedies, the Draft Revised Guidance includes two relevant updates:

• The presumption against behavioural remedies at Phase 1 has been removed – albeit the evidentiary bar remains high: parties must “fully substantiate, with appropriate evidence, the proposed remedy’s effectiveness to the clear-cut standard”.
• There is a clear statement that parties will need to engage with the CMA early (including in pre-notification) to give the case team sufficient time and information to fully assess the remedy proposal – this can be done on a without-prejudice basis.

In retail mergers involving local markets (e.g., supermarkets, veterinary clinics), the CMA is revisiting its position that only a restoration of the pre-merger market structure will be an effective remedy in Phase 1. This recalibration opens the door for UILs that reduce the overlap below the threshold of concern (invariably, by reference to a “filter” or decision-rule used by the CMA to identify local areas needing further assessment) but do not remove it entirely. This brings symmetry of assessment between a buyer that acquires all target sites in a local area and remedies the SLC by divesting sites to the level of the threshold and a buyer that acquires target sites only up to the threshold thus avoiding an SLC in the first place.

5. A role for monitoring trustees in assessing remedy proposals

The CMA is proposing to involve third-party experts at an earlier stage in the merger review process (at Phase 1 or Phase 2) to provide support with the assessment of remedy proposals. The Draft Revised Guidance acknowledges that there may be a particular benefit from involving a monitoring trustee or industry expert at the assessment stage when the remedy proposal is complex, highly technical in nature, or requires the input of an industry sector expert (e.g., on the remedy’s design or market effects). Involving an independent expert at an earlier stage may give the CMA more comfort that complex remedies will be effective.

While the CMA recognises that it cannot require merging parties to appoint a monitoring trustee or independent expert to assist with the assessment of remedy proposals (as opposed to implementation of the final remedies), its proposals envisage that parties seeking to offer complex remedies may voluntarily appoint an independent expert (or extend the role of the monitoring trustee) to perform this role. Engaging early with a third-party expert may help to mitigate the timing constraints of the CMA’s Phase 1 process.

6. A role for remedies in securing merger efficiencies and benefits

Mergers that give rise to an SLC can also generate ‘rivalry-enhancing efficiencies’ (e.g., economies of scale) and ‘relevant customer benefits’ (e.g., lower prices). In theory, merger efficiencies may be sufficient to offset an SLC and enable the CMA to clear a transaction without remedies. In practice, the CMA has historically applied a very high bar to efficiency claims, which has often deterred parties from putting forward and evidencing such claims. Significant stakeholder feedback was devoted to efficiencies, with calls for the CMA apply a lower evidentiary threshold, engage earlier with the parties, and provide clearer guidance.

While the CMA’s proposals do not address the assessment of merger efficiencies per se, they do touch on the interface between remedies and both types of merger efficiencies.

Rivalry-enhancing efficiencies. The CMA’s proposals acknowledge that remedies can be used to lock-in a merger’s pro-competitive efficiencies, in particular, by addressing concerns about their likelihood (will they happen?) and timeliness (how soon will they happen?). However, there is a high bar for the CMA to consider such remedies, as parties must also show that:

• the efficiencies claimed will enhance rivalry, are sufficient to prevent an SLC arising, and are merger-specific, presenting “strong evidence” in this regard;
• the remedy irreversibly changes the merged entity’s incentives; and
• the remedy can be “clearly specified, appropriately monitored and enforced, and not easily circumventable”.

These changes mirror the CMA’s approach in Vodafone/Three, which was cleared on the basis of remedies to lock-in pro-competitive efficiencies – namely, an 8-year commitment to invest in the UK’s network infrastructure, a 3-year commitment to cap retail mobile tariffs, and a 3-year commitment to offer pre-set prices and contract terms for wholesale services. The high bar to claiming remedies of this nature mean that such cases are likely to be rare in practice.

Relevant customer benefits (RCBs). RCBs can take the form of lower prices, higher quality, and greater choice or innovation and can arise outside the market(s) in which the merger gives rise to competition concerns, unlike REEs. There are strict rules on which benefits can count as RCBs, including that they must be merger-specific and timely.

The Draft Revised Guidance does not change the high evidentiary bar for parties to claim RCBs. However, the CMA proposes further guidance, including from past cases, on how to identify RCBs and the situations in which the CMA will take RCBs into account in the selection and tailoring of remedies. The CMA will commit to engage constructively with merging parties on RCBs on a without-prejudice basis at an earlier point in the process.

7. A more efficient Phase 1 process

The CMA has proposed incremental changes to its Phase 1 process to encourage parties to engage on remedies at an earlier point in time. These changes supplement recent updates to the CMA’s Phase 1 and Phase 2 procedures and target two barriers highlighted by the public consultation (to the extent not previously addressed): (i) a lack of early insight into the CMA’s competition concerns; and (ii) concerns by parties that early engagement on remedies is not genuinely without prejudice to the CMA’s substantive competitive assessment.

In combination, the earlier updates and additional changes proposed include:

• a teach-in session with the CMA in early pre-notification;
• informal update calls after the start of pre-notification and at the start of Phase 1, as well as additional calls throughout to discuss any material developments;
• a separate meeting to discuss remedies after (rather than during) the Issues Meeting;
• more guidance on how to engage with the CMA on remedies throughout the process;
• a signal that the CMA is willing to discuss remedies early on ‘without prejudice’; and
• guidance on how parties can fast track a case to UILs (i.e., a Phase 1 remedy).

The changes to the CMA’s Phase 1 process will be reflected in the CMA’s Mergers Guidance on Jurisdiction and Procedure rather than the CMA’s Guidance on Merger Remedies.

These changes to the Current Guidance broadly encode recent case practice. Gone are the days when the case team would effectively refuse to discuss remedies until the last couple of days in Phase 1, with the decision-maker not even being told that remedy discussions were taking place. In those times, the merging parties (and the case team) would have to guess at the decision-maker’s competition concerns and what the decision-maker would be likely to accept as a remedy. The parties would really only get one “shot” – if their initial remedy proposal was not up to snuff, the case would go to Phase 2. Those days are now over.

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