The Competition Appeal Tribunal (the “CAT”) has given judgment on Intercontinental Exchange, Inc v Competition and Markets Authority [2017] CAT 6.  This landmark case is the first occasion on which the Competition and Markets Authority (“CMA”) has required the unwinding of a completed merger.  The CAT has upheld this aspect of the CMA’s decision.  The case is also particularly significant because the merging parties had a vertical rather than horizontal relationship.

The central question in the case was whether the largest European utilities trading exchange (ICE) should be allowed to own the provider of the leading utilities trading software platform (Trayport), on which ICE’s rivals depend in order to be able to compete with ICE.  The CMA’s view was that there was an obvious danger to competition in the largest exchange being able to control the tool on which its rivals depend in order to be able to distribute their products.  The CMA therefore required the unwinding of the merger (which was not notified to the CMA in advance).

ICE challenged the CMA’s decision to require the unwinding of the merger.  In the Judgment handed down on 6 March 2017, the CAT has rejected that challenge.

In its Report, the CMA also required the termination of an agreement entered into between the parties after the completion of the merger transaction.  The CAT found that the CMA could under certain circumstances have the requisite vires to require the termination of such an agreement.  The Tribunal held, however, that the CMA’s Report did not properly articulate the reasons for which such termination was required and quashed this aspect of the Report.  The question of whether the agreement should be terminated will be remitted to the CMA for reconsideration.

Marie Demetriou QC and Sarah Abram represented the Competition and Markets Authority.

Robert O’Donoghue QC and Zahra Al-Rikabi made written submissions on behalf of an intervener, Nasdaq Stockholm AB, which supported the CMA’s decision in relation to the unwinding of the merger.