Rethinking Behavioural Remedies in Mergers: A New Era of Collaboration and Compliance

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View video highlights from our Expert Forum in London, focused on ‘Frontline Perspectives on Recent Developments in Competition Litigation, AI and Mergers.’

In the complex world of mergers and acquisitions, behavioural remedies have emerged as a pivotal tool for addressing competition concerns. Traditionally, competition agencies have been hesitant to accept these remedies for three main reasons: (1) their perceived inability to comprehensively resolve competition issues, (2) concerns about their potential distortive effects on market outcomes, and (3) the significant resources required for long-term monitoring and enforcement.

However, recent trends indicate a shift in this perspective. These trends were discussed at Cornerstone Research’s Expert Forum in London, held on 20 November 2024.

In this video highlight, Tina Zhou of Slaughter and May, Ricardo Zimbrón of Cleary Gottlieb, and Rich Pepper of Paul Weiss share their thoughts on behavioural remedies in mergers.

Headshot of Tina Zhuo Tina Zhou explained how the European Commission has begun to clear mergers at Phase II with behavioural remedies lasting up to ten years. Similarly, the Competition and Markets Authority (CMA) has accepted behavioural remedies even at Phase I for specific cases. This evolving landscape suggests that agencies are becoming more open to the idea of behavioural remedies as viable solutions.
Ricardo Zimbron Ricardo Zimbrón emphasised the importance of the new Phase II procedure, which fosters a more collaborative environment for parties to engage with the CMA. This framework encourages early discussions about behavioural remedies, allowing for a more streamlined process that can lead to timely resolutions. For cases that can be remedied through behavioural means, this new approach can be particularly beneficial.
Headshot of Rich Pepper Despite these advancements, challenges remain, particularly around monitoring and enforcement. Rich Pepper pointed out that effective behavioural remedies often involve third-party monitoring to alleviate the burden on competition agencies. By empowering third parties—such as regulators or customers—to oversee compliance, the enforcement of these remedies can be more efficient and effective.

As the landscape of mergers continues to evolve, the role of behavioural remedies is becoming increasingly significant. With a focus on collaboration and third-party involvement, these remedies can provide a pathway to address competition concerns while facilitating successful mergers. As stakeholders navigate this complex terrain, understanding the nuances of behavioural remedies will be crucial for achieving favourable outcomes.