Commentary on Sections Summary and Background
91.Part 3 of the Act makes reforms to the UK’s regime for the control of mergers. It will replace the merger control provisions of FTA 1973, other than the special arrangements for the control of newspaper mergers, which will remain. Policy for merger reform has been developed through a programme of consultation that started in 1999. ‘Mergers: A Consultation Document on Proposals for Reform’ (www2.dti.gov.uk/cp/mergercon/) was published in August 1999. ‘Mergers: The Response to the Consultation on Proposals for Reform’ (www2.dti.gov.uk/cp/mergerresp/) was published in October 2000. The main proposals, together with some further refinements, were included in the ‘Productivity and Enterprise: A World Class Competition Regime’ White Paper published in July 2001.
92.The main provisions of this Part of the Act provide for:
	final decisions on most mergers to be taken by the OFT and the CC rather than by the Secretary of State;
	mergers to be considered against a new test of whether they result in a substantial lessening of competition rather than the current, broader, public interest test;
	discretion for the competition authorities to clear a merger or allow it to proceed with less stringent competition remedies in circumstances where, notwithstanding an expected substantial lessening of competition, they expect it to result in defined types of customer benefit;
	the Secretary of State to continue to decide mergers which raise defined public interest considerations. National security is defined in the Act as such a consideration and there are powers for further such considerations to be defined by statutory instrument using the affirmative resolution procedure;
	revisions to the special regime for mergers between water enterprises to align it where possible with the general regime whilst preserving the importance currently attached to the ability of the water regulator to make comparisons between different enterprises;
	the retention of the existing two-stage approach to merger control. The OFT will carry out the first stage investigation to decide whether a reference to the CC is required. The CC will carry out the second stage, in-depth investigation where necessary;
	the retention of the UK’s system of voluntary rather than compulsory pre-notification of mergers;
	statutory maximum timetables for competition authorities to reach final decisions for both first and second stage investigations;
	the replacement of the current worldwide assets-based criteria for determining whether a merger is subject to merger control procedures with a UK-based turnover test.
93.The path of a merger investigation under the new system is summarised at Annex A.