The document discusses the importance of ex post assessments of merger remedies, highlighting that poorly designed remedies can lead to anti-competitive mergers. Key lessons emphasize the need for careful design and monitoring of remedies, with structural remedies generally being more effective than behavioral ones. It also reflects on the complexities of access deals and the necessity for backup remedies in cases where initial remedies fail.

1. E X P O S T A S S E S S M E N T O F
M E R G E R R E M E D I E S :
A N E X P O S T A S S E S S M E N T !
O E C D R O U N D T A B L E : 8 D E C E M B E R 2 0 2 3
G L O B A L F O R U M O N C O M P E T I T I O N
A M E L I A F L E T C H E R
C E N T R E F O R C O M P E T I T I O N P O L I C Y
U N I V E R S I T Y O F E A S T A N G L I A , U K
N.B. I am a Non-Executive Director at the CMA. Views are personal and do not necessarily reflect the position of the CMA.

2. TO COVER
 Why is the ex post assessment of merger remedies so important?
 What have we learned?
 Some final thoughts
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3. WHY SO IMPORTANT? (1)
 Remedies are critical to the success of merger policy.
 Ineffective remedies = allowing anti-competitive mergers!
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4. WHY SO IMPORTANT? (2)
 Remedies are not easy to design!
 Ex post assessment shows that they are frequently ineffective
or only partially effective. E.g. For those mergers where an
assessment could be made…
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Study Effective Partially Ineffective
FTC 2017 69% 14% 17%
EU 2005 65% 27% 8%

5. WHY SO IMPORTANT? (3)
 Authorities (and parties) need to know how to design them as
effectively as possible.
 Remedy assessments generate important lessons
 (arguably more valuable across jurisdictions than standard ex
post merger assessments – so valuable to share learnings)
 Authorities also need to know when to say no!
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6. KEY LESSONS #1
 Remedies need to be considered and designed carefully
 Problematic to leave remedies to the end of the process!
 Takes time to think through risks. Transparency and market-
testing can be critical.
 Even more important with multi-jurisdictional mergers.
o NB New proposed UK guidance would encourage
engagement on remedies early (without prejudice to
whether a merger is found to raise competition concerns).
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7. KEY LESSONS #2
 Structural tend to be better than behavioural, but….
 Carve outs less straightforward than selling whole businesses.
 Scope is critical (may well need to be larger than the
‘competition overlap’ to create a viable and attractive package).
o Back-office functions may also be needed.
 Non-degradation of assets is critical
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8. KEY LESSONS #2
 Monitoring the sales process is critical. The primary incentives
of party is to choose the least effective rival that the authority
will accept. Also to get a deal done.
 Due diligence of the proposed purchaser critical.
o Has it done proper due diligence?
o Has it got the ability and incentive to compete effectively
(financing important but also skills and experience).?
o Does it face any regulatory barriers?
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9. KEY LESSONS #3
 Access deals can be complex to get right (EU 2005 found success
rate of just 40%)
 Does it rely on FRAND terms? If so, what does this mean?
 Does the deal include all the necessary IP and know-how?
 Will it require ongoing monitoring?
 Is it long enough? And extendable if need be? Does it
sufficiently allow for changes in future conditions?
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10. KEY LESSONS #4
 ‘Back-up’ remedies may be justified.
 These are more intrusive but there if needed.
 NB. By the time it is clear that a remedy is not working as
intended, it is typically too late to unwind the merger. Or would
be disproportionate.
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11. SOME FINAL THOUGHTS (1)
 In digital ecosystem markets, we may expect to see a push for
more behavioural remedies.
 Early evaluation of these will be super-important for learning
how well they are working.
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12. SOME FINAL THOUGHTS (2)
 Are behavioural insights likely to be relevant?
 How much does a remedy’s success depends on consumer
behaviour?
 What about workers (divested as part of the deal)
 Is there a risk that either could be ‘steered’ by the merging
firm?
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13. SOME FINAL THOUGHTS (3)
 Could there be room for outcome-based remedies mergers?
 eg “measures must be enforced in a way that promotes
effective competition”?
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