UK CMA refers ICE-Trayport merger to phase 2 investigation


The UK Competition and Markets Authority (CMA) today announces its decision that the merger of Intercontinental Exchange Inc (NYSE:ICE) and Trayport has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

As a result, the merger will be referred for a phase 2 investigation unless the parties offer acceptable undertakings to address these competition concerns.

The CMA is concerned that ICE could use its ownership of Trayport’s software to raise prices and/or reduce the quality of its service to rival exchanges, brokers and clearinghouses in order to divert its rivals’ trades to ICE’s exchange and clearinghouse and/or to protect its market position from increased competition.

Andrea Coscelli, CMA Executive Director of Markets and Mergers, and decision-maker in the phase 1 investigation, said:

ICE is the leading exchange for energy trading in the UK, and in Europe, and based on the evidence we’ve gathered, it may have the ability and incentive to increase prices and/or reduce the quality of Trayport’s software products and services – on which its rivals are dependent – in order to divert trading from rival exchanges, OTC brokers and clearinghouses to its own exchange and clearinghouse, and/or in order to protect its market position from increased competition.

Given these concerns and their potential effect on those providers that currently compete with ICE, along with extensive third party concerns, we think the merger warrants an in-depth investigation unless ICE can offer suitable undertakings.

For details on the case, click here.

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UK CMA refers ICE-Trayport merger to phase 2 investigation

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