Wealth platform FNZ has submitted an application to overturn a final decision by the Competition and Markets Authority (CMA) that halted its merger with competitor GBST.
In its final report, the regulator said that the deal would lessen competition in the UK market and ordered FNZ to sell GBST.
In its application, the wealth platform alleged that:
- The watchdog “erred in law by reaching an unreasonable decision”;
- It failed to “properly define the relevant market” and to “carry out an appropriate market definition exercise”; and,
- It “acted irrationally by finding an actual of expected lessening of the competition without investigating the magnitude of the subset of the market affected by the alleged weakening of competition”.
The CMA was notified on 2 December that FNZ had lodged an appeal, but on 24 December the watchdog revealed that the “potential errors” it identified in its market share calculations were “as a result of the provision of inconsistent information during the course of the CMA’s investigation”.
The regulator will ask the competition appeal tribunal to refer the case back to the CMA to reconsider.
International Adviser contacted FNZ but the firm declined to comment.
Timeline of events
The M&A deal between the two platforms was agreed in July 2019, which saw FNZ buy 100% of the shares of its rival.
But the CMA stepped in in March 2020 as it was concerned with the effect the merger would have on the market.
Eventually, the fusion of the two firms was blocked by the competition watchdog in August 2020.
Shortly after, FNZ criticised the CMA as it claimed the regulator’s decision on the basis of a lack of competition came from a “narrow” view of the retail market, which is “at odds” with the evidence.