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Competition Appeal Tribunal rules on time limits for public interest interventions in mergers

19/08/19

In its judgment in Lebedev Holdings Limited & Anor v Secretary of State for Digital, Culture, Media and Sport [2019] CAT 21 dated 16 August 2019 the Competition Appeal Tribunal has ruled for the first time on the time limits which apply under the Enterprise Act 2002 (“the Act”) for intervention by the Secretary of State in mergers on public interest grounds.

The case concerned acquisitions in Lebedev Holdings Limited, the parent company of the Evening Standard newspaper, and Independent Digital News and Media Limited, publisher of the digital successor to The Independent. On 27 June 2019 the Secretary of State issued a Public Interest Intervention Notice (“PIIN”) in respect of the acquisitions under s.42 of the Act.

The Tribunal first considered whether the PIIN had been issued in time. In the absence of formal notification of the merger, the four-month time limit for issuing a PIIN begins to run under s.24(2)(b) of the Act when “material facts” are made public. As to the meaning of “material facts”, which is not defined in the statute, the Tribunal stated that save in exceptional circumstances, the information should include facts which provide a reasonable basis for considering that there is or may be a ‘merger’ for the purpose of the Act, i.e. a situation where two enterprises cease to be distinct within the meaning of s.26.

On that basis, the Tribunal concluded that newspaper coverage of the acquisitions had not made public sufficient material facts to engage the provisions of s.24 since they did not disclose the basic factual foundation for considering that, in the relevant transactions, two enterprises might cease to be distinct. Accordingly, the PIIN was issued in time.

The Tribunal then proceeded to consider whether time had expired for a reference to be made on public interest grounds under s.45 of the Act. It held that a reference under s.45 could be made only when a relevant merger situation subsisted at the date of the reference, and that the four-month time-limit under s.24 of the Act applied to a reference by the Secretary of State in a public interest case as well as to a PIIN. Accordingly, the Tribunal held that the time limit to make a reference had expired on 1 July 2019.

The judgment is here.

 

Sarah Ford QC (instructed by Bristows LLP) appeared on behalf of the Applicants.

David Scannell and Emily MacKenzie (instructed by the Government Legal Department) appeared on behalf of the Respondent.