GOVERNMENT proposals to create a single competition authority in the UK prompted concern yesterday that new mandatory merger notification rules could increase both costs and regulatory burdens for companies.
The consultation, launched by the Department of Business, details how the existing Office of Fair Trading and Competition Commission will be combined to create a new Competition and Markets Authority.
The move is designed to streamline the competition regime, and avoid duplicated costs for firms.
But the proposals come with additional changes, including a mandatory requirement for companies involved in large M&A deals to notify the Authority, regardless of whether there are competition considerations involved.
The UK currently operates a voluntary code, with companies able to alert the regulators to deals that they think may contain a competition element.
The new regime could drive up costs, and increase regulatory scrutiny on straightforward transactions.
“A mandatory merger regime is likely to result in additional burdens for business and an extra administrative burden for the OFT at a time of fiscal restraint,” said Eamonn Doran, a Linklaters competition partner.
There are also worries over proposals to recover costs from those investigated for antitrust if an infringement is found. “It’s somewhat like a hanged man having to pay for his noose, and would not be welcome to business,” said Michael Grenfell at Norton Rose.