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The de minimis exception in merger cases

11 January 2008

In November last year, the OFT raised the financial threshold in relation to markets of insufficient importance in merger cases.

Now, where the OFT finds that the total value of a UK market is below £10 million (rather than the previous £400,000) it will, except in very concentrated markets, not be obliged to refer a merger in that market to the Competition Commission, even where it considers that the merger may lead to a substantial lessening of competition.

The OFT hopes that this new, higher threshold will strike a better balance between the risks to competition posed by a merger and the costs of a full-scale Competition Commission investigation.  Referring to the OFT’s first use of the de minimis exception, Simon Pritchard, Senior Director of Mergers, said:

“While caught by the duty to refer [….] the issues are of very limited potential scale. Overall, this means the relatively remote potential benefits of further inquiry would be disproportionate to the certain costs involved.”

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Peter Andrews

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