In July 2021, Dye & Durham Limited and its subsidiary Dye & Durham (UK) Limited acquired TM Group (UK) Limited without notifying the Competition and Markets Authority or seeking clearance of the merger. Both Dye & Durham and TM Group provide a one-stop property search service to clients in the property market (conveyancers, estate agents, mortgage brokers, and the like). The companies’ search reports are called Property Search Report Bundles (“PSRB”).
The CMA served an initial enforcement order in August 2021, preventing the companies from proceeding toward integration. Thereafter, the CMA conducted Phase I and Phase 2 investigations, reaching the conclusion in its final report, issued in August 2022, that the merger would result in a substantial lessening of competition in the market for PSRBs.
In October 2022, the parties agreed to a final set of undertakings pursuant to which Dye & Durham would divest ownership of TM Group to a CMA-approved purchaser over a period of six months. Early in 2023, however, the companies submitted a new proposal to bifurcate the divestiture. The CMA rejected this proposal on several grounds: that it would require a variation to the final undertakings, and this was neither justified nor requested; that the proposal would in any event not be consistent with the companies’ obligations under the final undertakings; the CMA was not satisfied that the proposal would achieve the goals of the final undertakings by restoring competition in the relevant marketplace, and; the proposal would not allow the parties to meet the stipulated timetable for implementation of the divestiture.
The companies filed an application for review, contending that (i) the CMA had erred in finding that a variation to the final undertakings was needed in order to allow the proposed transaction; (ii) the CMA had erred in determining that a variation to the undertakings should not be given; (iii) the CMA had erred in finding that the criteria for approval, defined as “purchaser approval criteria” in the final undertakings, had not been met, and; (iv) the CMA had erred in refusing to extend the deadline for the divestiture process.
In an unanimous opinion on July 10, 2023, the Competition Appeals Tribunal rejected all four grounds of appeal. Firstly, the CAT held that the CMA had not erred in its conclusion that the proposed bifurcation diverged significantly from the final undertakings, which contemplated a private sale to a single purchaser. Secondly, the CMA was not unreasonable in its conclusion that circumstances had not changed enough to justify a variation to the final undertakings; the opposite conclusion, could, the CAT noted, result in uncertainty, further litigation, and possibly a rushed, compelled and disadvantageous divestiture. Thirdly, the CMA had not erred in its finding that the proposed method of divestiture did not satisfy the purchaser approval criteria set forth in the final undertakings. The fourth ground of appeal, the CMA’s refusal to grant an extension for the divestiture, was moot, as the CMA had eventually granted an extension.