CMA made to rethink veto of platform tech merger

The competition watchdog’s decision to order FNZ to sell off fellow platform technology provider GBST has been quashed by the Competition Appeal Tribunal.

The case has been referred back to the Competition and Markets Authority so it can reconsider its view and “make a new decision”.

In December last year, FNZ submitted a notice of application to the CAT to challenge the watchdog’s ruling.

Later that month the CMA admitted it had “identified certain potential errors” in its market share calculations and asked the tribunal for the decision to be quashed so it could relook at the matter.

FNZ appeals merger block as CMA admits ‘errors’

After carrying out an in-depth investigation into the platform tech deal, the CMA deemed FNZ’s purchase of GBST and the relative market share it would result in was likely to lead to a “significant lessening of competition” in the supply of “retail platform solutions” in the UK.

It concluded that a “full divestiture” of GBST would be an “effective and proportionate remedy” to address the concerns around a smaller competitive playing field.

The CMA has now appointed a remittal group for the case. This is made up of former partner of law firm Norton Rose Fulbright, Martin Coleman as chair, along with Colleen Keck, John Thanassoulis and Jeremy Newman.

Money Marketing understands the potential errors in the CMA’s final report were in relation to “inconsistent sources of evidence” about which customers were supplied by which supplier.

High Court, Queen’s Bench Division Judge and chair of the CAT, the Honourable Mr Justice Morris has ordered that the finding of a substantial lessening of competition and the decision as to remedy in the CMA’s final report from November 2020 should be quashed.

It has referred the case back to the competition watchdog to “reconsider and make a new decision”.

The update from the tribunal also orders that: “The CMA shall pay FNZ 50 per cent of its reasonable recoverable costs of and occasioned by the application, such reasonable costs to be assessed on the standard basis if not agreed.”

Competition watchdog orders platform tech companies to split

FNZ acquired GBST in a deal worth around £150m in November 2019 after it received the go ahead from the Australian supreme court of New South Wales.

But in the UK the purchase raised an eyebrow with the CMA, which launched an investigation just days later.

The watchdog suggested the acquisition could lead to “higher prices, fewer options and less innovation” in the UK platform tech space.

Having felt its fears had not been allayed by FNZ, the CMA decided to move forward with a more in-depth probe.

After going back and forth for a year, in November 2020 FNZ was ordered to sell GBST.

FNZ had previously outlined that the CMA had misunderstood the market by defining it “too narrowly”.