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The Competitions and Market Authority (CMA) announced that having received no undertakings from the parties, it would commence

As previously reported, the CMA decided to investigate the transaction after it was completed on the grounds that it was concerned about the tie up between the two rivals in sports fashion lessening competition and adversely affecting competition. In the past, it has been willing to issue decisions which would see mergers being undone because they were in breach of competition law.

The CMA have been active in investigating transactions, a number of which have led to enforcement orders. In particular, the CMA has used Initial Enforcement Orders (IEO), which, under Section 72 of the Enterprise Act 2002, prevent merging parties from integrating further once imposed.

Penalty notices in relation to enforcement actions have increased in 2019. The CMA issued 6 penalty notices in 2019, in comparison to two in 2018 and one in 2017. In relation to IEOs, the CMA has so far issued three penalty notices for breaches in 2019 as opposed to one in 2018 and none in 2017.

It would appear that the CMA intends to send a strong message to all companies that the regulator is more than willing to investigate and enforce orders strictly no matter which stage an acquisition has reached. Recently, the CMA imposed a £250,000 fine on Paypal for breaching an IEO during its acquisition of iZEttle AB. It also fined JLA New Equityco Limited £120,000 over its breach of an IEO for acquiring Vanilla Group Limited during the CMA’s Phase 2 investigation of the transaction.

Market Tracker will continue to monitor this transaction as it develops.