How Does a Merger Review Work? Phase I, Phase II, Remedies and Deadlines

The merger review process looks like a black box from the outside, but it follows a predictable grammar in every major jurisdiction: pre-notification, Phase I, Phase II, remedies or prohibition. Understanding that grammar — and where the clocks stop — is what separates deal teams that close on schedule from those that discover an extra six months mid-deal. This guide walks the full sequence with the Microsoft/Activision, JetBlue/Spirit and Booking/eTraveli reviews as case studies, continuing our series on global competition and antitrust practice.

What happens before you even file?

In most sophisticated regimes, formal filing is preceded by pre-notification: confidential contact with the case team, draft notifications, and rounds of information requests before the statutory clock starts. In the EU this routinely takes four weeks to three months; the UK operates similarly through pre-notification discussions; Türkiye accepts and encourages informal pre-filing consultation on jurisdictional questions.

Pre-notification is not bureaucratic foreplay — it is where the review is often decided. The case team forms its first view of markets and theories of harm from your draft; a filing that anticipates concerns with data and internal-document candour buys credibility that pays off later. In the US there is no formal pre-notification for standard deals, but the 2024-expanded HSR form forces equivalent substance into the initial filing itself: deal rationale, overlap narratives, supply relationships and prior-acquisition history.

What does Phase I involve — and how long does it take?

Phase I is a fixed-deadline screen: 25 working days in the EU (extendable to 35 with remedies or a referral request), 40 working days in the UK, 30 calendar days’ initial waiting period in the US, 30 days in Türkiye (in practice extended by information requests restarting the clock), and up to 30 days in China’s Phase I with most simplified cases resolved inside it.

The authority tests whether the deal raises “serious doubts” (EU), a “realistic prospect of a substantial lessening of competition” (UK), or equivalent. It gathers market feedback — customer and competitor questionnaires are standard — and reads the parties’ internal documents. Deals with no or minimal overlaps clear unconditionally; deals with localized problems can settle in Phase I with clean, clear-cut remedies; the rest face the fork: withdraw, restructure or proceed to Phase II. In the US, the fork is the Second Request — a document-and-data subpoena of legendary breadth that resets the clock until substantial compliance.

What triggers a Phase II in-depth investigation?

Phase II opens when the Phase I evidence leaves serious doubts unresolved: high combined shares in concentrated markets, closeness of competition between the parties, complaints from credible customers, internal documents describing the target as a competitive threat, or novel theories — innovation harm, ecosystem leverage, potential-competition loss.

The in-depth stage changes the game procedurally: 90–105 working days in the EU (with stop-the-clock tools), 24 weeks in the UK with an independent inquiry group, six months to a year in the US through Second Request compliance and litigation posture, and up to 180 statutory days in China often stretched by pull-and-refile. Economic evidence dominates — merger simulations, diversion analysis, entry assessment — and the parties’ own documents are read against them. Roughly half of Phase II deals still clear, many with remedies; the process itself, though, is the punishment: management distraction, financing costs and customer uncertainty for half a year or more.

What theories of harm do authorities actually test?

Four families dominate. Horizontal unilateral effects: the merged firm profitably raises prices or degrades quality because the parties were close competitors — the workhorse theory, driven by shares, diversion ratios and margin data. Coordinated effects: the deal makes tacit collusion among remaining players more stable — fewer firms, symmetric structures, transparent markets.

Vertical foreclosure: the merged firm cuts rivals off from a key input or customer channel (input and customer foreclosure), assessed through ability, incentive and effect — the framework that decided Booking/eTraveli and the UK’s Microsoft/Activision analysis. Innovation and potential competition: the deal eliminates a future rival or dampens R&D races — the theory behind pharma pipeline divestitures and the scrutiny of big-tech acquisitions of nascent firms. Deal teams should map their transaction against all four before the authority does it for them.

What remedies can save a problematic deal?

Structural remedies — divesting an overlapping business, plant or brand to an approved purchaser — remain the currency of merger settlements. Authorities prefer them because they fix market structure once, without ongoing monitoring. Strong packages sell a complete, standalone business; weak packages (assets cherry-picked from both parties, no customer relationships) fail market tests.

Behavioural remedies — access commitments, licensing, firewalls, non-discrimination promises — are accepted mainly for vertical concerns, with duration and monitoring conditions. The frontier is the quasi-structural remedy: Microsoft selling Activision’s cloud rights to Ubisoft converted a behavioural promise into a transferred asset, which is precisely why the CMA accepted it. Practical rules: offer remedies early (Phase I remedies must be clear-cut), size them generously (authorities discount optimistic packages), and line up an up-front buyer where credibility is doubted. A failed remedy negotiation usually means prohibition or abandonment — the fate of the blocked deals we profile separately.

What happens when the authority blocks — can you appeal?

Prohibitions can be challenged: before the EU General Court (then the Court of Justice), the UK’s Competition Appeal Tribunal, Turkish administrative courts, and — because the US system is judicial from the start — American agencies must themselves win in court to stop a deal, as the DOJ did against JetBlue/Spirit in 2024 and the FTC did against Kroger/Albertsons the same year.

Appeals face two brutal constraints. Standards of review defer to the authority’s economic assessment — courts overturn process errors and evidentiary gaps more readily than judgment calls. And time kills deals faster than judgments do: EU annulment litigation runs years, long past any long-stop date. The realistic function of appeal rights is prospective — CK Hutchison/O2’s annulment reshaped EU telecoms merger analysis years after that deal died. In the US, by contrast, the trial is the review: merging parties can and do litigate to close, and the agencies’ court record disciplines their case selection. Booking/eTraveli shows the EU pattern: prohibited in 2023, upheld by the General Court in 2025, deal long dead, doctrine very much alive.

How do review timelines compare across the US, EU, UK, Türkiye and China?

Plan on these envelopes from filing (excluding pre-notification): US — 30 days, or 8–14 months with a Second Request and litigation; EU — 25 working days Phase I, plus ~5 months for Phase II; UK — 40 working days Phase 1, 24+ weeks Phase 2; Türkiye — 30 days nominal Phase I that in practice runs 1–4 months, with Phase II adding six months; China — under 30 days simplified, 1–6+ months for normal cases with pull-and-refile risk.

The binding constraint in cross-border deals is the slowest problematic jurisdiction, and the interactions matter: remedies offered in one regime become the floor for others, and authorities increasingly coordinate timing informally. Sequence filings so that the hardest reviews start earliest, and build the long-stop date off the pessimistic branch, not the base case — the full playbook is in our multi-jurisdictional filing guide.

How do you prepare a filing that clears fast?

Fast clearances are engineered before filing. Get the market definition argument right and support it with data the authority can verify. Pre-empt the obvious questions: shares under plausible alternative definitions, entry evidence, customer switching data. Align the narrative with your internal documents — nothing burns credibility like board decks describing a “consolidation play” filed alongside a notification denying overlap significance.

Discipline internal document creation from the deal’s first day: deal rationale memos are discoverable in every major regime, and careless language (“eliminate the competition”, “pricing power”) writes the authority’s theory of harm for it. Brief bankers and executives accordingly. Finally, treat customers as the constituency they are — hostile customer feedback is the strongest single predictor of Phase II. If key customers are nervous, address their concerns commercially before the questionnaires land.

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