Wide-ranging changes proposed to the UK mergers and markets regimes

On 20 January 2026, the UK Government launched a consultation on major changes to the UK’s merger control and markets regimes that are intended to drive economic growth and ensure the UK operates a “best-in-class” competition regime. Many of the proposed reforms are likely to be welcomed as increasing predictability and transparency, but there are also a number of more controversial proposals, in particular the abolition of the Competition and Market Authority’s (CMA’s) “panel” decision-making process.

What is the background to the reform proposals?

The Government has made very clear that the CMA has an important role to play in supporting its “primary mission” of boosting UK economic growth. Following the ousting of the then-CMA Chair Marcus Bokkerink in January 2025 amidst concerns that the CMA was overly interventionist and not sufficiently focussed on growth, the Government published a draft growth-focussed “Strategic Steer” to the CMA in February 2025 (finalised in May 2025). At the same time the CMA committed to embedding the principles of pace, proportionality, predictability and process across its work (the so-called “4Ps framework”) and making a number of internal policy and operational changes aimed at supporting growth and investor confidence. The Government subsequently announced in its March 2025 Regulatory Action Plan that it would consult on legislative reform proposals to build on this work, recognising the CMA could only go so far with its internal reforms as it operated within an existing legal framework. An update to the Regulatory Action Plan in October 2025 indicated that this would include replacing the CMA’s panel model for decision-making.

What are the main reform proposals?

1. Changes to the Phase 2 decision-making process – abolishing the independent “Panel”

The most controversial proposal is the abolition of the independent Panel decision-making process for in-depth Phase 2 merger inquiries and market investigations. Phase 2 decisions are currently taken by an Inquiry Group made up of members of the CMA Panel (who are appointed to the Panel by the Department for Business and Trade through open competition and bring a wide variety of skills across competition economics, law, finance and business).  Inquiry Groups take decisions independently of the CMA Board: this express statutory separation  is designed to ensure “a fresh pair of eyes” at Phase 2 and avoid confirmation bias.

The Government is proposing to replace this decision-making structure with new Mergers and Markets Board Committees and sub‑committees exercising delegated authority from the CMA Board, modelled on the relatively new digital markets regime. These would include senior CMA staff (of equivalent seniority or more senior to the Phase 1 decision-maker), including Executive or Senior CMA Directors, CMA Non-Executive Directors and members of a pool of external experts (retaining the diverse and expert views currently provided by the Panel), with at least half of members drawn from outside the CMA executive.

This is intended to increase the accountability of the CMA Board in decision making, enhance consistency across regulatory regimes, improve predictability of decision making and strengthen engagement between the CMA Board and the parties being investigated. However,  it would remove an important “check and balance” on CMA decision-making and seems likely to increase the risk of confirmation bias. These concerns are heightened by the lack of any corresponding amendment to the appeal standard: merger and markets decisions will continue to be limited to appeal on judicial review grounds (i.e. illegality, procedural unfairness, unreasonableness/irrationality, or breach of a right protected by the European Convention of Human Rights), rather than a full merits review  - something which has previously been justified by the Government in part on the basis of the Panel model.

2. Legislative changes to the merger jurisdiction tests to increase predictability

The CMA determines its jurisdiction to review mergers on the basis of statutory thresholds, including the “share of supply” and “material influence” tests. These tests have been interpreted very broadly by the CMA to assert jurisdiction (as seen for example in Roche / Spark Therapeutics and Sabre/Farelogix), which has sometimes made it difficult for businesses to predict whether a transaction falls within the CMA’s jurisdiction. The CMA recently updated its guidance to clarify how it applies these tests, but the Government is now proposing to embed this approach in statute and increase predictability for businesses:

• For the share of supply test, the Government proposes to restrict the criteria that the CMA may consider to the six currently listed as examples in the Enterprise Act 2002 (value, cost, price, quantity, capacity, and number of workers employed) and remove the CMA’s current discretion to consider “some other criterion, of whatever the nature”.
• For the material influence test, the Government is proposing to codify the CMA’s existing approach, limiting the factors to be considered by the CMA in determining whether material influence has been acquired to: (i) shareholding or voting rights thresholds (with 15% proposed as a possible minimum threshold) or any shareholding or voting rights in combination with other factors; (ii) board representation or appointment rights; (iii) special voting rights or veto rights over strategic decisions; (iv) access to confidential strategic information; and (v) commercial, financial or consultancy arrangements. The Government would also have powers to amend these criteria if “new competition challenges” arise.

These proposals are likely to be welcomed insofar as they enhance legal certainty, fixing the relevant factors in statute rather than relying on non-binding guidance and imposing clearer limits on the CMA’s discretion. However, in practical terms they do not materially change the CMA’s current approach.

3. Simplifying the markets regime

The Government is proposing to introduce a  new single-phase market review tool to replace the existing regime of market studies and in-depth market investigations, to improve pace, predictability and proportionality. Under this new regime, the CMA would undertake a 6-12 month review of a market, which would conclude in either (i) a final report setting out the CMA’s recommendations, or (ii) a provisional finding of adverse effect on consumers and a further 6-12 month consultation on potential remedies (depending on the degree of intrusiveness of the remedies under consideration) and publication of a final report. There would be a new statutory time-limit of 24 months to conclude the end-to-end market review process (extendable by up to six months in certain circumstances), with most cases taking 18-14 months and some considerably less (compared to over 3 years in some cases under the current regime). The substantive assessment under the new single phase review would be based on a single test of “adverse effect on consumers” to allow greater flexibility, speed up review times and remove perceived uncertainty that can arise under the current regime (where an “adverse effect on consumers” test is applied for market studies but an “adverse effect on competition” test is applied for market investigations). 

Alongside this major overhaul of the markets regime, the Government is also proposing various other changes:

• reviews of market remedies at least once every ten years (acknowledging the ongoing burden of monitoring);
• a legal requirement for the CMA to consider “sunset clauses” (i.e. whereby remedies fall away after a set period) in all cases;
• clarifying in legislation that sector regulators can be responsible for monitoring market remedies;
• requiring the CMA to consult sector regulators in the design of market remedies; and
• granting the CMA greater discretion to decide whether to initiate a market review when requested to do so by a sector regulator.

4. More time to agree merger remedies at Phase 1

The Government proposes to double the statutory timeframe available to the CMA to consider remedies following a formal finding at the end of Phase 1 that a merger may result in a substantial lessening of competition (SLC), increasing it to 20 working days. This is aimed at avoiding a more intensive Phase 2 investigation wherever possible and reducing the risk of “near miss” cases where the merging parties make a remedy proposal that is close to sufficient but run out of time to make necessary amendments.

Merging parties would still need to submit their remedy proposals within five working days, but the CMA would have discretion to grant an extension of up to five working days to enable additional development of those proposals where there is a reasonable prospect that the issues can be resolved at Phase 1. The CMA would then be able to use the remainder of the extended period up to 20 working days after the Phase 1 SLC finding to assess the remedy proposals further. This additional time and flexibility is intended to enable more meaningful engagement on remedies at Phase 1 and increase the chances of resolving concerns at an early stage, and is likely to be welcomed by businesses.

5. Greater formal role for Secretary of State in approving CMA guidance

The Government proposes to expand the range of CMA guidance documents requiring the formal approval of the Secretary of State (currently limited to guidance on the digital markets regime, civil penalties and international cooperation). The consultation document does not specify a list of documents but indicates that this would include “key guidance documents”, giving the example of the CMA’s  Merger Assessment Guidelines (which set out the CMA’s approach to substantive assessment). The stated aim is to ensure CMA guidance is fit for purpose and delivers increased predictability for businesses, but this proposal may well see some pushback from stakeholders in terms of respecting the independence of the CMA.

6. Stronger investigative powers for algorithms

The Government proposes to grant the CMA enhanced authority to scrutinise algorithms under its competition and consumer protection mandates. These powers would allow the CMA to require businesses to provide access to their algorithms, disclose information about how they function and are used, generate simulated outputs, and carry out designated demonstrations and tests.

7. Excluding the Christmas period from statutory time limits

The Government is proposing to pause statutory time-limits for merger and market reviews over the Christmas and New Year period, acknowledging that many people choose to take extended time off work at this time. This is already a feature of some international merger control regimes (including the EU), and is aimed at ensuring positive relationships between the CMA and parties with a stake in its investigations.

Where do we go from here?

The consultation will run until 31 March 2026, following which the Government will consider feedback received and then publish its response. Whilst many of the proposals are likely to be welcomed and clearly complement the CMA’s “4Ps framework”, others – including the abolition of the Panel and the enhanced role of the Secretary of State in approving CMA guidance – are likely to be more divisive.

Implementation of most of the proposed changes (even if modified following the consultation) will require primary legislation, so a Bill will then need be introduced to Parliament and follow the usual Parliamentary process. The Government acknowledges in the consultation document that prolonged uncertainty around potential legislative change does not help improve predictability for businesses, and it has committed to bring forward legislation that takes into account responses to the consultation “as soon as Parliamentary time allows”. However, even if the Parliamentary process can be completed relatively quickly, major changes are unlikely to take effect before the end of 2026 or early 2027.

For more information, or to discuss how we can assist you with responding to the consultation, please reach out to Neil Baylis, Ruth Allen or your usual CMS contact.