Traditionally, the UK has had a two-stage decision making process for merger cases. First, there were two separate organisations, the Office of Fair Trading (OFT) and the Competition Commission (CC). The OFT would carry out the first phase review of a merger (“Phase 1”) and, if there were reasonable prospects that the merger would result in a significant lessening of competition (“SLC”), the OFT would refer the merger to the CC for an in-depth second phase review (“Phase 2”). Importantly, at Phase 2, decisions about whether the merger would result in an SLC and what remedies should be imposed were taken by an independent inquiry group, selected from a panel of independent individuals with experience in law, economics, accounting and business.
In 2014, the OFT and CC merged to form the Competition and Markets Authority (CMA). Following the merger, the CMA retained the independent panel for Phase 2 of merger inquiries. In practice, this meant that Phase 1 decisions were taken by senior CMA officials, whereas Phase 2 decisions were taken by a group of four members selected from the independent panel.
UK merger decisions can be appealed to the Competition Appeal Tribunal (CAT). In such appeals, the law requires that the CAT applies a judicial review (“JR”) standard, rather than a full merits review standard. This means that the CAT will test whether the decision was lawful, procedurally proper, and rational. Because merger control decisions almost always affect property rights, which are protected by Article 1 of Protocol 1 of the European Convention on Human Rights (ECHR), the CAT made clear in the BAA judgment that its JR review should also include a proportionality assessment.
Now, in 2026, the UK Government is consulting on the effective abolition of the independent panel decision-making model. Instead, Phase 2 merger decisions will be taken by a committee of the CMA Board. This has led to some commentators saying that the review standard for appeals to the CAT should change to a full merits review as is the case for Competition Act 1998 (“CA98”) cases, whereas the Government considers that JR should remain the standard.
This blog post seeks to answer the question whether, in law, the abolition of the independent panel, and the resulting removal of a significant degree of independence and impartiality in Phase 2 decisions, in and of itself means that merger reviews should now be subject to a full merits review. It concludes that this is not the case. That does not mean that the new system should not be improved, and the Government’s ambition for the UK to have an international “best in class” and business friendly competition regime would be well-served with further protection of merging parties’ (and third parties’) rights. However, the notion that the abolition of the panel inevitably means that a full merits review is required should be dispelled.
What determines the “right” standard of review?
The fact that merger decisions are subject to JR follows from primary law (the Enterprise Act 2002), and the Government is not intending to change this. The statutory position therefore remains that JR is the standard for merger appeals. Why then would anyone be concerned about the right standard if statute already dictates what it is? The reason is that all public decisions are subject to the rule of law, which includes human rights law. This means that when a government body takes a decision that affects individuals or businesses, that decision should in principle be subject to an appropriate level of review, and the government cannot “legislate away” such a review except in highly exceptional circumstances.
Under the European Convention on Human Rights (ECHR), there is a right to a fair trial (Article 6 of the ECHR). That right applies to both civil proceedings and proceedings involving a “criminal charge”, where a distinction is made between criminal and quasi-criminal proceedings. The case law of the European Human Rights Court (“ECtHR”) and the UK’s highest courts applying Article 6 gives a good framework for determining whether the abolition of the panel means the standard of review must change.
It is first important to dismiss the idea that a full merits review would be required after the abolition of the panel because such a review applies in CA98 cases. The argument goes that the only reason why merger decisions are not subject to a full merits review like CA98 cases is that merger decisions involved an independent panel. That is, however, a false comparison. CA98 cases and merger decisions are subject to a fundamentally different analysis when it comes to their Article 6-compliance.
CA98 cases are “quasi-criminal” in nature due to the significant fines that can be imposed and the considerable stigma associated with involvement in competition infringements such as illegal cartels. In such cases, the European Human Rights Court (“ECtHR”) has held that Article 6 does not prevent that the decision to impose a fine is taken by the same agency that has conducted the investigation, provided that the decision is subject to a review by an independent court or tribunal with “full jurisdiction”. That court or tribunal must have the power to quash in all respects, on questions of fact and law, the decision of the agency that adopted the fine. A CAT full merits appeal in fact likely goes well beyond what the ECtHR requires under Article 6, as it is practically a full rehearing of the case, including the right to call new witnesses and adduce new evidence.
The standard of review in “civil” proceedings
Merger cases are not “quasi-criminal” in nature. The question whether non-criminal proceedings which involve Government decisions are covered by Article 6 at all was effectively answered already in 1971 in the ECtHR judgment in Ringeisen v Austria, a case in which the Austrian Regional Committee refused to approve Mr Ringeisen as the new owner of property he had acquired: Article 6 ECHR applies to all proceedings the result of which is decisive for private rights and obligations. That would certainly include cases in which the CMA can order the divestment of all or part of a business.
However, that does not immediately mean that the rules that apply in criminal or quasi-criminal cases must also apply to such civil proceedings. In relation to civil proceedings the ECtHR held in Albert and Le Compte v Belgium and Bryan v United Kingdom (which specifically concerned a UK JR) that for civil proceedings to be compliant with Article 6, they must be decided by an independent and impartial tribunal with full jurisdiction. However, the ECtHR added that (i) this does not mean that the initial decision cannot be taken by a decision-maker that does not meet the conditions for independence and impartiality; and (ii) “full jurisdiction” under Article 6 does not mean that any appeal of that initial decision must involve a rehearing on the merits. What matters is that the appeal court can review whether the decision was lawful, reasoned, and non-arbitrary. When testing the Article 6-compliance in a specific case, the ECtHR will also have regard to the “safeguards attending the procedure before [the administrative decision-maker]”, such as a “quasi-judicial” decision-making process and legal duties to be independent and uphold the principles of openness, fairness and impartiality. Where such safeguards exist, this will assist with meeting the test of Article 6.
It follows that ECHR law does not require “double independence”, nor does it require full merits review if the initial decision is not by an independent and impartial tribunal. However, the assessment of whether the combination of the administrative decision and the subsequent JR together respect the right to a fair trial is a careful and fact-specific one. What matters is how, in individual cases, the administrative decision-maker and the reviewing court ensure that a fair trial is guaranteed.
Application in domestic cases
The ECtHR judgments led to interesting considerations by what was then the highest court at a domestic level, the House of Lords, starting with its ruling in Alconbury, which featured a challenge against the Secretary of State’s power to decide on certain planning related issues, rather than the local planning authority. It had been argued that the case could be distinguished from Bryan because the Secretary of State’s decision-making process was not of a quasi-judicial nature (unlike the situation in Bryan).
The Lords did not follow that line of argument, holding that the test for whether there is sufficient jurisdictional control is not a mechanical one. It depends on all the circumstances. There should be a sufficient review of the legality of the decisions and of the procedures followed and that was the case here. There was no requirement under the case-law of the ECtHR that the court should have “full jurisdiction” to review policy or the overall merits of a planning decision.
The issue came before the House of Lords again in Begum v Tower Hamlets, in which Ms Runa Begum contested the decision of the London Borough of Tower Hamlets’ rehousing manager which concluded that her refusal to accept a particular housing offer was unreasonable. Ms Begum was unsuccessful in her appeal. In his Opinion, Lord Bingham took care to strike a balance between providing sufficient judicial protection and maintaining efficient decision making.
Lord Hoffman added that it is necessary “to consider whether the composite procedure of administrative decision together with a right of appeal to a court is sufficient” (emphasis added). As part of this, the appellate (or reviewing) court must have “full jurisdiction” over the administrative decision, but that does not necessarily mean jurisdiction to re-examine the merits of the case. It means, “jurisdiction to deal with the case as the nature of the decision requires.” If the decision turns upon a question of contested fact, the appellate court must have full jurisdiction to review the facts, or the primary decision-making process must have sufficient safeguards to make it virtually judicial.
It follows from these cases that, when higher courts test compliance of the “composite procedure” consisting of an administrative decision that is then appealed on JR grounds with Article 6, they look at whether the reviewing court used its discretion to deal with the case as the nature of the decision required.
Tsfayo
Reviewing courts can get that balance wrong, and end up in Strasbourg’s crosshairs, as can be seen in Tsfayo v United Kingdom. In that case, the Hammersmith and Fulham Council had refused to grant Ms Tsfayo’s claim for backdated housing and council tax benefits, because she had failed to show “good cause” why she had not claimed the benefits earlier. Ms Tsfayo appealed the decision to the Housing Benefit and Council Tax Benefit Review Board (“the HBRB”), which consisted of three Councillors from the Council. The HBRB rejected the appeal, finding that Ms Tsfayo must have received some correspondence from the local authority during the relevant period concerning the council tax she owed, although no such correspondence was produced to it. Ms Tsfayo then sought leave to apply for JR against the HBRB’s decision, but the High Court dismissed the application.
The ECtHR found that there was an infringement of Article 6 in these proceedings, for three reasons:
- The issues in the case did not require professional knowledge or experience and the exercise of administrative discretion pursuant to wider policy aims. The question at the heart of the proceedings was simple: was there “good cause” for Ms Tsfayo’s delay in making a claim for benefits?
- The HBRB was not merely lacking in independence from the executive, but was directly connected to one of the parties to the dispute, since it included councillors from the local authority which would be required to pay the benefit if awarded. This might infect the independence of judgment in relation to the finding of primary fact in a manner which could not be adequately scrutinised or rectified by JR.
- Ms Tsfayo’s claim was refused because the HBRB did not find her a credible witness. Whilst the High Court had the power to quash the decision if it considered, inter alia, that no there was no evidence to support the HBRB’s factual findings, it did not have jurisdiction to rehear the evidence or substitute its own views as to the applicant’s credibility. Thus, there was never the possibility that the central issue would be determined by a tribunal that was independent of one of the parties to the dispute.
Compared to Bryan, Alconbury and Begum, the Tsfayo judgment appears less readily applicable to UK merger control decisions which, panel or no panel, involve professional knowledge and experience and the exercise of administrative discretion pursuant to wider policy aims, and do not suffer from the flaws of the HBRB. However, one lesson can be drawn from both Tsfayo and Bryan: if there are flaws in the initial administrative decision-making process, the subsequent review must be capable of remedying those flaws. If not, the overall process would risk failing the Article 6 test.
Application to the “composite procedure” of a panelless CMA with JR to the CAT
The Court of Appeal ruled on the correct approach to JR by the CAT under the “old” regime in its 2024 judgment in Cerélia, which the Government cites with approval in its consultation. That judgment echoes the principles discussed above and additionally highlights the special role of the CAT in the UK which, according to Green LJ, was created by Parliament “as a tribunal comprising specialist lawyers, economists and others with specific relevant expertise, to oversee the decisions of regulators”.
Even though the standard of that review may for some decisions be JR, the CAT can in appropriate cases be expected to examine closely the complaints made about a decision and its evidential underpinning. While it needs to allow a margin of discretion to the CMA, this should not be confused with “[t]he extent to which the forensic sleeves must be rolled up the judicial arm”. That margin of discretion is moreover fact and context specific. Green LJ closes by stressing that semantics should not obscure the nature of the exercise: “[i]f, following a detailed review, the CAT concludes that the decision maker erred because, for example, it misconstrued the evidence or data, or failed properly to inquire into the evidence, then it is a matter of words only to say that the decision is in error because it was not supported by the evidence, or alternatively, that the decision was “irrational” … none of this involves the CAT substituting its own view for that of the decision maker. It is simply holding the CMA to a proper standard”.
It seems unlikely that the removal of the panel would fundamentally change this balance. The approach outlined in Cerélia is in line with the judgments in Bryan, Alconbury and Begum, including the need for the reviewing court to deal with the case as the nature of the decision requires. As Green LJ says, this may well require a “deep dive” into the evidence, and to commit to such a deep dive does not amount to the CAT overstepping its JR jurisdiction, it may indeed be its legal duty.
That being said, within the JR standard, the CAT may well see a need to roll up the “forensic sleeves” to a greater degree to ensure parties are guaranteed a fair trial. There are still aspects of the CMA’s procedure, such as the lack of access to the file in merger cases, which are out of step internationally, and which mean that issues around the robustness of evidence may not be flushed out during the CMA process, leaving it to the CAT to remedy the issue on appeal. The more the question of whether certain evidence should or should not be shared with the parties is left to individuals who also have duties such as protecting the CMA’s budget (which militate towards less, not more access), the more the judgment calls made in this respect will be subject to scrutiny on appeal. The CMA could easily avoid this by giving more substantial access to the file.
Questions for the consultation
The Government’s proposal will lead to a reduction in independence and impartiality at Phase 2. There are two points it may wish to consider when finalising its proposal.
The first is that the reduction in independence and impartiality at Phase 2 is unlikely to be welcomed by local and international businesses. The proposal is lacking in ways to enhance their rights during the procedure. There can be good policy reasons for retaining the JR standard (as my colleagues discussed in relation to adopting JR as the standard for digital markets decisions under the DMCC Act). But other changes could be made and they would enhance the likelihood that the system as a whole will withstand Article 6 challenges. One of these changes is access to file in merger cases, reducing the risk of questions around independence of judgment in relation to determinations on disclosure.
Second, the CMA and CAT are the joint guarantors of the composite procedure that must, as a whole, be Article 6-compliant. Each will now need to adjust to the new system and take their responsibility to ensure that the right to a fair trial is respected. Like communicating vessels in physics, the changes the CMA applies to its processes have consequences for the level of scrutiny the CAT must apply within the flexibility of a JR by a specialised tribunal. The Government’s proposal introduces uncertainty as to how those JRs will play out, and there may be a need to address that uncertainty.
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