UK government consults on major reforms to competition processes

On 20 January 2026, the Department for Business and Trade (DBT) announced a set of proposed reforms to the Competition and Markets Authority (CMA)'s processes. These are likely to increase the role of government policy and reduce the regulator's discretion in merger investigations as well as affecting market reviews. The consultation is open until 31 March 2026.

Market reviews and remedies

In order to increase the speed and flexibility of the market review process, DBT proposes to replace the current two-phase model of market study followed by in-depth investigation with a single-phase market review "tool", with a 24-month statutory time limit.

The CMA would no longer be required to conduct reviews of markets referred to it by sector regulators (such as Ofcom, the FCA or the ICO). The proposal suggests that where the referral falls outside the government's strategic steer, it should not be prioritised by the CMA. The DBT also proposes that sector regulators should be responsible for the monitoring and enforcement of remedies set by the CMA in their sectors.

The consultation considers requiring the CMA to include a "sunset clause" when designing market remedies (as it has already committed to doing). This would mean that remedies would be finite unless renewed by the CMA. The consultation also suggests a statutory requirement on the CMA to review market remedies at least every ten years to check whether they remain proportionate. In a move welcomed by the DBT, the day before this consultation was published, the CMA launched a strategic review of 33 market remedies. 

Tests for merger investigations

The proposal seeks to clarify two controversial tests that determine whether the CMA has jurisdiction to investigate a merger: the share of supply test and the material influence test. Both have been criticised for being ambiguous, lacking legal certainty and giving the regulator overly wide jurisdiction.

By reducing the CMA's flexibility in how these two tests are applied, DBT aims to create more certainty for businesses:

• Share of supply test: DBT proposes to remove the current catch-all phrase allowing the CMA to consider factors "of whatever nature" when assessing whether parties together supply at least 25% of goods or services (or 33% under the hybrid test), replacing it with a fixed list of factors such as price, cost and capacity.
• Material influence test: DBT proposes to replace case-by-case assessment (currently spanning 15 paragraphs of guidance) with defined factors including a minimum 15% shareholding or voting rights and access to confidential information.

Algorithms 

Under the DBT's proposals, the CMA will gain sweeping new algorithm investigation powers, particularly concerning price-setting algorithms.

Businesses could be required to simulate algorithm outputs, provide demonstrations, or even alter how services and digital content appear to consumers. This could potentially create significant compliance burdens on affected businesses when responding to information requests

Merger remedies

The DBT proposes to extend the timeframe for the CMA to consider merger remedies following a Phase I investigation, with the aim of reducing the number of Phase II referrals.

It is possible that such a change may have enabled the Getty/Shutterstock merger to have been cleared at Phase I (in that case, the CMA commented that receiving a complex set of remedies on the deadline had left it with insufficient time to determine whether they would adequately address its concerns).

Abolition of Phase II merger panels

Phase II merger investigations are currently directed and determined by members of an independent panel of experts. Controversially, the DBT proposes to replace the role of the independent panel with CMA board sub-committees. These would consist of members of the CMA's board and other senior CMA staff, supported by non-CMA staff experts. The CMA board would also be entitled to make Phase II merger decisions itself.

Whilst DBT argues that this will improve predictability, consistency and accountability (as senior CMA staff answer to Parliament), critics fear the return of politicised decision-making, increased lobbying opportunities and a perceived reduction in decision-making independence (without an independent decision-making panel, the CMA effectively becomes judge, jury and executioner).

If this proposal is adopted, it is unclear whether this will improve merger control predictability or will encourage more merging parties to appeal to the CAT on the basis that Phase II decision-makers are insufficiently independent from Phase I decision-making.

Osborne Clarke comment

These proposals are surprisingly far-reaching, and not without controversy. Several of the proposed changes, particularly the proposal to move away from independent panels in Phase II reviews, marks a major change in the perceived independence of the UK merger control process.

While greater predictability and proportionality may support the government's growth agenda, concerns about increasing political interference in UK merger control may outweigh any benefits. The independence of the CMA and its expert-led merger panel system have long been admired as setting the international gold standard for merger control; these reforms risk undermining this standard.

Laura Henderson, trainee at Osborne Clarke LLP, assisted in writing this Insight