CAT supports Competition Commission interim measures

Lawyers have described the Competition Appeal Tribunal’s (CAT) judgment in a case where a merged company felt that the Competition Commission had asked for unreasonable measures to be undertaken while it approved the merger as “significant”.

This is the first time the commission’s powers to impose interim measures have been tested in court. In particular, the CAT slammed the Office of Fair Trading (OFT) for its handling of events.

The case arose when Stericycle, a clinical waste company with 65 per cent market share, failed to notify the OFT of its acquisition of Sterile Technologies in February. Although the OFT requested information a day after the merger completed, it did not put interim measures in place until mid-May, by which point the companies were already being integrated.

“We’ll see tighter undertakings by the OFT, and parties will be less relaxed about integrating if there are competition issues,” said Baker & McKenzie professional support lawyer Grant Murray.

The OFT had to refer the case to the commission because market share of the companies was over the 25 per cent threshold. The commission had concerns that the companies would be run by one manager before it fully approved the merger, saying that it would be hard to “de-scramble the eggs” should it not approve, and asked that two separate chief executive officers be installed. Stericycle found this meaure unreasonable, but CAT upheld it as legitimate.

Unlike in EU law, UK companies do not have to notify the OFT of their intent prior to merging. Ronit Kreisberger of Monckton Chambers said: “There’s no mandatory notification regime in this country, but this case highlights the risk of pressing ahead with integration without notifying the OFT first.”