The Changing Law and Practice of UK and EEC Merger Control

Abstract

The House of Lords' rejection of an application for judicial review in R v Secretary of State for Trade and Industry, ex parte Lonrho2 provides a valuable insight into the operation of the UK's merger control system and the limited function of judicial supervision. The purpose of this article is to examine the UK system with special reference to the Lonrho case and to explain how the lack of transparency endemic within the system and sanctioned by the House of Lords constitutes a serious flaw in the operation of the control mechanism. The article then explains how the injection of an EEC law element into a disputed merger dramatically alters the legal environment. The UK's approach to merger control is shown to be susceptible to legal challenge both at the substantive and at the procedural level where Community law rights are in issue. The article continues with the submission that, although EEC and UK merger law have recently moved towards congruence through identification of competition as the key criterion for assessment, they nonetheless remain far apart at the institutional and procedural level. It is suggested that both systems are capable of improvement by learning from each other. However, it is submitted that debate at Community level is influenced by elements of institutional immaturity which have distorted the substance of Community law of market regulation. The article concludes by highlighting areas in which reform in the Community is feasible and attempts to explain why such reform is necessary in order to transform the Community into a more democratic entity.