New U.S. merger control filing forms to take effect in February 2025
Following publication in the Federal Register, the new Hart-Scott-Rodino (HSR) premerger notification forms will become effective on February 10, 2025. This is unless the new Trump administration issues a “regulatory freeze” postponing the effective date of the new rules. Such freezes have been commonplace at the outset of previous administrations and it is therefore possible that we won’t see the revised forms kicking in until a later date.
In the meantime, transacting parties should plan to submit a filing using the new HSR form if a deal is to be notified on or after that date. They will need to factor in the significant additional burden and time required to prepare the new HSR form—the U.S. antitrust agencies estimate that it will require an average of 68 additional hours per filing, but this likely underestimates the additional burden on merging parties, especially for transactions involving overlapping products or services.
Provisions in transaction agreements may also need to be adjusted to allow for HSR notifications to be made “as soon as reasonably practicable” (rather than a set period of business days) and/or extend the long stop date.
Our alert on the changes to the HSR rules details the most notable differences between the current and new HSR forms. Filers are strongly recommended to seek specialist antitrust assistance for guidance through the revised notification process.
Where a deal is likely to garner public interest, transacting parties should also take account of a new M&A portal on the U.S. Federal Trade Commission (FTC)’s website. It allows the public to comment on specific proposed transactions that may be before the FTC for review, and how they may affect competition—submissions are likely to influence the FTC’s approach to reviewing transactions.
U.K. CMA to review approach to behavioral merger control remedies
Chief executive of the U.K. Competition and Markets Authority (CMA), Sarah Cardell, has announced that the authority will launch a review of its approach to merger remedies in the new year.
This is big news, most notably because the CMA will consider when behavioral merger control remedies may be appropriate. It indicates a potential shift in the authority’s stated policy, which is to strongly favor structural divestments over behavioral commitments when remedying antitrust concerns.
The CMA will also look at the scope for remedies that lock in rivalry-enhancing efficiencies and assess how remedies can preserve relevant customer benefits which may offset anticompetitive effects. It wants to initiate discussions on remedies with merging parties as quickly as possible and is more generally committed to enhancing the CMA’s engagement with business, investment and start-up communities.
Depending on where the CMA lands after its review, the dynamics for obtaining U.K. merger control approval could change for future deals.
Our alert comments on the CMA’s likely direction of travel and how this fits with the U.K. government’s wider policy agenda (including its focus on growth).
The Financial Times referenced our global trends in merger control enforcement report in its coverage of the CMA’s remedies review.
New U.K. merger control thresholds, digital markets regime, and antitrust reforms to take effect on January 1, 2025
Many of the landmark changes introduced by the Digital Markets, Competition and Consumers Act 2024 will come into force on January 1, 2025. These include:
- Merger control: updated merger control thresholds include a new test enabling the CMA to more easily review non-horizontal transactions, including purchases by large players of start-ups or small innovative firms. There will also be procedural improvements to in-depth reviews.
- Digital markets: a new digital markets regime will impose conduct requirements on digital firms designated as having “strategic market status”. The CMA will also be able to intervene in digital markets to address the root causes of barriers to competition and will have tough powers of enforcement.
- Antitrust: the prohibition on anticompetitive agreements will be expanded to cover agreements implemented outside the U.K. that have effects within the U.K., and the CMA will gain more robust powers to investigate and enforce the rules.
You can read more about the reforms in each of these areas in our key takeaways.
The U.K. government has published detailed transitional provisions. Broadly, these mean that the new rules will not apply to cases or procedures already underway as at January 1, 2025. But there are nuances and particularities for different provisions, and businesses already subject to CMA proceedings should look carefully at how the changes might impact their case.
From a merger control perspective, the new thresholds will not apply to deals that are completed before January 1, 2025, or to anticipated deals where the CMA’s phase 1 review has started before that date.
Significantly, the ground-breaking reforms to the consumer protection regime are excluded from the January 1, 2025 commencement date. These changes will dramatically strengthen the CMA’s powers, enabling it to directly enforce U.K. consumer protection rules and impose fines of up to 10% of annual global turnover for infringements. There will be new rules on fake reviews, hidden fees and drip pricing, and subscription traps.
Due to the scale of the reforms, these provisions will kick in later. The government previously announced that it expects to implement the CMA’s new enforcement powers, as well as the provisions which replace the current unfair trading regulations, in April 2025. It is still working on other areas—for example, earlier this month it published a consultation to gather views on how the new rules on subscription contracts should work. The government has indicated that these rules will not take effect before Spring 2026. We will update you when we know more.
EU and U.K. edge closer to competition cooperation agreement
The EU and the U.K. government have announced the conclusion of technical negotiations on a much-anticipated agreement to cooperate on antitrust matters. Once finalized, the agreement will allow greater dialogue between the European Commission (EC), EU member state antitrust authorities and the CMA.
While we do not yet have sight of the proposed text, the EC and the U.K. government press releases outline the main elements of the agreement. These include:
- Allowing the EC, member state antitrust authorities and the CMA to cooperate directly in investigations.
- Requiring important antitrust and merger control investigations to be brought to each other’s attention.
- Enabling the exchange of confidential information subject to a waiver being provided by the relevant company/party.
- Providing clear principles of cooperation aimed at avoiding conflicts between jurisdictions.
This goes some way to restoring the level of cooperation that the CMA enjoyed pre-Brexit. Significantly, the EC notes that the agreement is the first to enable EU national antitrust authorities to cooperate directly with a third country antitrust authority.
However, there are limitations—the agreement will only enable the exchange of confidential information between authorities to the extent that parties consent (although this is clearly good news for the parties involved). Plus, it doesn’t appear to cover some key areas, such as foreign subsidy control, or apply to other U.K. regulators which have powers to apply and enforce antitrust rules.
For businesses with activities in both the EU and U.K., improved cooperation between the EC and CMA will hopefully result in some benefits. It could, for example, streamline the timelines for antitrust investigations and even reduce the likelihood of diverging outcomes in parallel probes/reviews.
But there are also potential downsides. It might increase the chance that an investigation by one authority spawns a similar probe in another. And diverging outcomes cannot be ruled out, given possible differences in market conditions between the EU, EU member states and the U.K., and variations in enforcement priority.
Both the EU and U.K. must now move forward with their processes for ratification. In the EU, this means preparing the proposals for review and approval by the Council and Parliament. From a U.K. perspective, the draft will need to be considered and signed off by Parliament. Signature in the coming year seems likely.
Below-threshold deal under EC merger control scrutiny following referral by Italy
As we have previously commented, the European Court of Justice (ECJ) ruling in Illumina/GRAIL was groundbreaking. The court held that member states cannot refer a transaction to the EC for review under Article 22 of the EU Merger Regulation where they have no competence to review the deal under national merger control rules.
The case gave rise to a crucial question: what, now, is the path forward for the EC in its quest to assess potentially anticompetitive deals that do not trigger merger control filing obligations?
In our September edition of Antitrust in focus we discussed the various options open to the EC. These include amending the EU merger control thresholds (by lowering them or introducing a deal value test) and/or granting the EC the power to call in transactions it considers may raise antitrust concerns.
However, such amendments would require EU-level legislative change—something that would take time and is by no means certain to receive approval.
On this basis, we considered that the most likely outcome—at least in the short term—would be for the EC to rely on member states to expand their own powers to review transactions. This would in turn give member states more opportunities to make referral requests to the EC.
This route is starting to prove fruitful for the EC. In October, the EC announced that it had accepted a request by Italy to assess the acquisition of Run:ai Labs by NVIDIA. The deal met neither EU nor standard Italian merger control thresholds. However, the Italian Competition Authority (ICA) was able to use its call-in powers (obtained in 2022) to require the parties to notify the transaction, and then submitted a referral request to the EC. The deal is currently undergoing a phase 1 EC review with a decision expected just before Christmas.
Italy is one of eight member state antitrust authorities with the ability to call-in/review deals that do not meet their national merger control thresholds. Several more are pushing for similar powers, including most recently in Finland and Slovakia (with the latter set to launch a consultation on merger control reforms that would include seeking views on a new call-in power).
So, while it is fair to say that floodgates have not opened for this type of merger control referral request, as the dust settles on the Illumina/GRAIL ruling we could see an uptick in referrals. However, challenges to the EC’s jurisdiction to accept such referrals may follow and it remains to be seen whether the approach will stand up to scrutiny by the EU courts. Merging parties may seek to argue that using a national call-in power in conjunction with Article 22 is prejudicial to legal certainty, a principle that was at the heart of the ECJ’s ruling in Illumina/GRAIL.
Ultimately, the way forward for the EC will be a decision for the next EU Competition Commissioner, Teresa Ribera, who took office on December 1, 2024.
Ribera has pledged to “swiftly find the best way to ensure that ‘killer acquisitions’ of target companies with low or no turnover but with high competitive and innovative potential do not escape scrutiny under EU merger rules, just because they do not meet the turnover-based notification thresholds”. She has committed to looking into all options “without creating any unnecessary additional administrative burden or legal uncertainty for companies”.
We expect that this will be a high priority for the EC’s agenda in 2025.
Australia’s new mandatory merger control regime will mean more reviews and particular scrutiny of certain sectors and types of deal
In last month’s Antitrust in focus we reported that a bill to implement Australia’s shift to a mandatory suspensory merger control regime had been introduced before the Australian Parliament. The bill has since been approved and will come into effect on January 1, 2026, with businesses able to make voluntary notifications from July 1, 2025.
A&O Shearman’s Australian antitrust team has delved into the legislation. They have extracted the key elements merging parties need to know about the new regime and comment on the likely impact on M&A, including more deals facing review, with particular scrutiny of certain sectors (e.g., supermarkets), serial acquisitions and complex deals. You can read about it in their alert or listen to their podcast.
Polish guidelines carve out certain extraterritorial joint ventures from merger control notification obligation
The Polish antitrust authority has issued revised guidelines that clarify the criteria for mandatory merger control notification of extraterritorial transactions involving the creation of joint ventures.
Under the revised guidelines, the creation of a joint venture will not require notification in Poland if the market(s) in which the joint venture will operate, or where there will be vertical (supplier-customer) relationships between the joint venture and its parents, do not cover Poland or a part of Poland.
This assessment will require a detailed review of the joint venture’s business activity in light of the authority’s approach to relevant market definitions.
Our alert provides a reminder of the Polish merger control rules—the turnover thresholds and the de minimis exemption—and details the significant and very welcome narrowing of the effects test for joint ventures.
Length of U.S. court proceedings fatal for luxury fashion merger
Owners of accessible-luxury fashion brands, Tapestry and Capri, have walked away from their USD8.5 billion tie-up. The announcement came just three weeks after a U.S. federal court decision to grant a preliminary injunction which halted the deal.
In April 2024, the FTC sued to block the transaction in its administrative court, alleging it would substantially lessen competition in the market for accessible-luxury handbags in violation of Section 7 of the Clayton Act. The agency separately sought a preliminary injunction and temporary restraining order in federal district court.
In granting the preliminary injunction, the district court concluded that the FTC had successfully showed that it was likely to succeed in its administrative proceedings in proving that the effects of the merger were likely to be anticompetitive. The court looked closely at market definition, market shares and concentration levels, as well as internal documents of the parties that described their brands as being close competitors. Read more on the court’s findings in our Need-to-Know article, including the endorsement of the U.S. antitrust agencies’ new 2023 Merger Guidelines.
Following the court’s decision, Tapestry and Capri filed a joint notice of appeal. Given the deal’s long-stop date of February 10, 2025, the parties sought an emergency motion for an expedited appeal process, which was granted by the Court of Appeals.
However, a week later the parties terminated the merger agreement. Tapestry noted that the “outcome of the legal process is uncertain” and was unlikely to be resolved by the deal deadline.
The case underlines the continued appetite of the U.S. antitrust agencies (and in particular the FTC) to litigate, fuelled by their ongoing hardline approach to accepting merger remedies. And, while some merging parties are willing to fight the challenge, the time it could take to go the distance may ultimately be incompatible with their contractual obligations.
Head of the Antitrust Division of the Department of Justice (DOJ), Jonathan Kanter, has commented that the U.S. agencies have seen “a historic rate of mergers being abandoned”. Watch out for our upcoming global trends in merger control enforcement report, which will analyze deal mortality data and comment on what to expect in 2025.
Intel loyalty rebates ruling refocuses attention on EC’s burden of proof and the “as-efficient-competitor” test
Last month, the ECJ confirmed the annulment of the EC’s landmark decision to fine Intel EUR1.06bn for abusing its dominant position in the x86 microprocessor (CPU) market. The EC had concluded that Intel granted anticompetitive loyalty rebates to computer manufacturers. As part of its assessment, it evaluated whether an equally efficient rival could compete despite the rebates (the so-called “as-efficient-competitor” (AEC) test).
The case has seen multiple court rulings. In the latest judgment, the ECJ has confirmed that, to find an abuse, the EC must demonstrate that the dominant undertaking’s conduct: (i) falls outside “competition on the merits”; and (ii) has the actual or potential effect of restricting competition by excluding or hindering competitors that are as efficient as the dominant undertaking.
The ECJ places the burden of proof on the EC. The authority is required to take account of all the relevant factual circumstances to establish whether the conduct, at the very least, is capable of producing exclusionary effects “on the basis of specific, tangible points of analysis and evidence”.
For loyalty rebates, that analysis should cover, for example, the extent of the undertaking’s dominant position, the share of the market covered by the contested rebates, the conditions and arrangements for granting the rebates, and their amount and duration. The ECJ emphasized that the EC is also required to analyze the possible existence of a strategy aimed at excluding competitors that are at least as efficient as the dominant undertaking from the market.
The ECJ notes that loyalty rebates “must be assessed, as a general rule, using the AEC test”, even though the test is “merely one of the ways” to assess the undertaking’s conduct.
Significantly, the ECJ’s judgment comes in the wake of the EC’s draft guidelines on exclusionary abuses which propose the introduction of rebuttable presumptions reversing the EC’s burden of proof for certain categories of conduct. This presumptions-based approach to loyalty rebates seems incompatible with conclusions reached by the ECJ.
Our commentary provides more detail on the ECJ’s approach to the AEC test as well as the ruling’s likely impact on the EC’s guidelines. The EC aims to finalize its guidelines during 2025—we will keep you posted.
European Commission issues EUR462.6 million fine in landmark decision on ‘divisionals game’ and disparagement
The EC has fined Teva EUR462.6m for abusing a dominant position in several EU Member States in relation to a drug for the treatment of multiple sclerosis.
The decision marks the first time that the EC has imposed an antitrust fine on a company for misusing patent procedures through “playing the divisionals game”. It is also the first fine for engaging in a disparagement campaign against a generic competitor (the EC had similar concerns over the marketing of Vifor’s iron deficiency treatment, but settled the case in the summer with commitments, which included a communication campaign to rectify the effects of potentially misleading messages). The case reinforces the EC’s commitment to antitrust enforcement in the pharmaceutical sector, including in relation to novel theories of harm.
According to the EC, after the basic patent protecting the active ingredient in its multiple sclerosis drug Copaxone expired, Teva filed multiple divisional patent applications covering the manufacturing process and the dosing regimen “in a staggered way”. It then enforced the patents by seeking interim injunctions before withdrawing them when they seemed likely to be revoked.
Teva also targeted doctors and national decision-makers with communications that called into question a rival product’s safety, efficacy and therapeutic equivalence with Copaxone, even though relevant health authorities had approved the competitor medicine.
The EC considers that Teva’s practices—lasting between four and nine years—may have prevented list prices from decreasing, with a negative impact on public health budgets. Once the rival product entered the market, list prices decreased by up to 80%.
Our A&O Shearman on life sciences blog post explains the EC’s concerns with Teva’s post-basic patent strategy and the implications of the EC’s decision for pharmaceutical companies.
U.S. antitrust challenge to healthcare deal shows scrutiny of the sector continues
The U.S. antitrust agencies have a keen eye on potential anticompetitive consolidation in the healthcare sector. Most recently, the DOJ Antitrust Division, together with four State Attorneys General, has sued to block UnitedHealth Group’s planned acquisition of Amedisys.
The DOJ alleges that the deal will eliminate competition between two of the largest home health and hospice providers in the U.S. It notes that UnitedHealth’s post-transaction market share makes the transaction presumptively illegal in hundreds of local markets.
UnitedHealth offered to sell off certain facilities to VitalCaring Group to address the DOJ’s concerns. However, the agency rejected the proposal, saying the divestiture would not alleviate harm in over 100 home health, hospice and labor markets.
The case is another example of the U.S. antitrust agencies doubling down on their promise to closely examine healthcare consolidation.
The DOJ notes that it “will not hesitate to check unlawful consolidation and monopolization in the healthcare market that threatens to harm vulnerable patients, their families, and health care workers”. Over the summer, UnitedHealth abandoned its acquisitions of Stewardship Health and a related company following DOJ scrutiny.
On the same day that the suit was announced, DOJ head Jonathan Kanter gave a speech in which he raised concerns over “platformization” of the sector and called for a fundamental redefinition of the approach to antitrust and competition policy for healthcare.
The case also highlights the importance of complying with procedural obligations under the U.S. merger control rules. The DOJ is seeking civil penalties against Amedisys for failing to produce millions of documents and not disclosing the deletion of other materials. Amedisys faces penalties for each day it was in violation of the rules.
UnitedHealth has announced it will vigorously defend the suit.
Need-to-Know: updates on U.S. antitrust litigation
Our Need-to-Know Litigation Weekly publication analyzes notable U.S. litigation decisions, orders, and developments. From an antitrust perspective, we have featured the following cases over the past month:
You can access Need-to-Know Weekly in full here. If you would like to be added to the distribution list, contact us at litigation_weekly@aoshearman.com.
A&O Shearman Antitrust team in publication
Recent publications by members of the team include:
- Kees Schillemans (partner, Amsterdam) and Jochem de Kok (senior associate, Amsterdam): Text & Commentary on Competition Law (in Dutch), 2024, published by Wolters Kluwer
- Marinus Winters (counsel, Amsterdam) and Estelle de Krom (associate, Amsterdam): Langzaam steun voor capaciteitsmechanismen (English translation: Gradual support for capacity mechanisms) (in Dutch, access behind a paywall), Tijdschrift voor staatssteun, 2024/3
