Frontier Economics has today published a new bulletin, “All change”, exploring how the Competition and Markets Authority (CMA) is approaching the review of long-standing merger remedies. The bulletin focuses on the case of FirstGroup’s acquisition of Scottish Bus Holdings, a bus business based in Glasgow, which was blocked by the Monopolies and Mergers Commission (MMC) in 1997 before being allowed to proceed by the Secretary of State under the imposition of certain behavioural remedies.

The test for the CMA to apply is whether there has been a relevant change of circumstances. The bulletin shows that critical inputs into helping the CMA make its assessment were a clear explanation of the original concerns, and robust empirical evidence to demonstrate that there had been considerable changes in the market that meant these original concerns no longer applied. In this particular case, the critical evidence related to the overlap between bus depots’ catchment areas and the recent experience of entry.

Frontier advised FirstGroup on the remedy review process in this case.

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