Competition briefing note
Finding that there were high barriers to entry and expansion for private hospitals, and weak competitive constraints on private hospitals in many local markets in the provision of privately-funded health care by private hospital operators, including in PPU, the Competition and Markets Authority (CMA) has introduced a new regime for the review of PPU arrangements.
From 1 October 2014 two competition regimes will apply to the setting up of PPUs in the UK.
- The existing merger control rules provided for in the Enterprise Act 2002.
- The new competition test recommended by the CMA.
While it is not entirely unique, this new test is a departure from the norm in competition and mergers analysis and it creates an additional burden on the parties to PPU arrangements. It means that the competition assessment will be less certain in many cases, and that it will likely require more management time and resources resulting in increased costs for the parties.
Consequently, competition law review is going to get more complicated for PPU arrangements. Early assessment of any potential competition issues, as well as which regime is likely to apply is advisable.
This Briefing Note provides some background on the two regimes.
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