The Scenario
In 2018, prompted most probably by a “complaint”, the UK’s Competition and Markets Authority (CMA) decided to scrutinise a merger between Tobii Dynavox, a relatively small Swedish tech firm, and Smartbox, an even smaller family-owned competitor from Scotland. Both companies were in the business of creating life-changing communication technologies for severely handicapped individuals, using eye-tracking tech and computer screens. The total deal value was under £4 million.
The companies hadn’t reported the deal to the CMA voluntarily (as permitted under the UK’s regime), figuring that, given the scale of competition from tech giants like Apple and Microsoft, the CMA wouldn’t be too concerned about a merger between two niche players focused on such a specialised mission. The CMA’s sudden interest caught them off guard - unbeknownst to them, the CMA had just moved technology acquisitions to the top of its policy agenda and this deal just happened to be one of the first to hit its radar post-change.
Our Role
The CMA didn’t hold back, deploying its full arsenal of powers and investigative tools—from detailed information requests to implementing an Initial Enforcement Order and appointing a Monitoring Trustee. Over three intense months, we supported our clients by managing a barrage of complex queries and regulatory demands.
A key point in our argument was based on the CMA’s own guidelines regarding smaller transactions. We argued that the specific segment of technology both companies specialized in—a niche at the very high end of assistive tech—should be considered a minor market with limited turnover, falling below the CMA’s usual threshold for intervention. Surprisingly, while the CMA acknowledged this market segmentation, they chose to overlook it when applying their usual rules for small-scale mergers.
The Outcome
The merger proceeded to a detailed Phase II investigation and eventually faced a tribunal challenge before the Competition Appeal Tribunal. In a somewhat frustrating conclusion for everyone involved, the CMA used its broad discretion to block the deal, reaffirming its expansive influence over all merger activity in the UK, regardless of the market size or impact.