Judges attack watchdog over Sainsbury deal
CMA slammed for ‘unfair’ conduct
JUDGES have slammed the competition watchdog’s handling of the merger between Sainsbury’s and Asda.
Lord Justice Roth, supported by two other judges, said the Competition and Markets Authority had made ‘unreasonable and unfair’ demands of the supermarket groups during its consultations over the deal.
The CMA expected teams from the two grocery chains to prepare responses to 400 pages of complex market analysis in a matter of days.
In a judgment that will embarrass the CMA’s boss, former Tory MP Lord Tyrie (pictured), the judges even raised the question of whether the case showed the watchdog’s methods will not be fit for purpose after Brexit.
The judges said that the regulator will have to deal with more large-scale mergers post-Brexit when the European competition authorities will no longer hold sway. This could ‘multiply’ the problem caused by the authority’s tight timetables. The row started after the CMA shared a large number of complex documents with both supermarkets just seven working days before the deadline for responses. Sainsbury’s and Asda said they needed up to five more weeks to review the information, which was accompanied by a large volume of industry data. When the CMA granted only a one-week extension the firms launched a judicial review, the process where government bodies’ decisions are reviewed by judges. And the three judges ruled the watchdog had been too wedded to its timetable considering the deal was such a ‘large and complex’ merger, five times the size of the average tie-up. The judges told the Competition Appeal Tribunal: ‘We have no doubt that imposing that timetable was unreasonable and unfair.’ They added: ‘If the departure of the UK from the EU will lead to all large-scale, international mergers affecting the UK which currently fall within the exclusive jurisdiction of the EU Commission, being in future also subject to the UK merger regime, this problem is likely to be multiplied.’
Between November 27 and 28, nine different sets of Working Papers were sent. One batch was dispatched at 1 am. All in all, there were 400 pages.
The companies were given just seven working days to analyse the data and send responses before the December 7 deadline.
The three judges said the CMA’s timetable should be quashed, but made clear the watchdog retained the power to set a new schedule.
Sainsbury’s and Asda said: ‘We took the decision to apply for a Judicial Review of the CMA’s phase two timetable and process reluctantly but were pleased that the Tribunal ruled in our favour.’
A CMA spokesman said it is ‘not unusual for companies to be required to respond in the timelines we were working to with Sainsbury’s and Asda’.
He added: ‘The court confirmed that it is for the CMA to set its own administrative timetable, in order to meet the legally binding deadline, and that we did not need to give them as much time as they were asking for.’