Geographic market definition CMA: UK and EU merger control practice
In short: geographic market definition CMA practice asks where customers would switch if a hypothetical monopolist raised price by 5 to 10 per cent. The CMA’s 21 May 2026 Welltower decision found competition concerns in 30 local catchment areas. The CMA reaches the finding through postcode-level overlap mapping and drive-time isochrone analysis, a methodology that translates directly to telecoms, payments and infrastructure M&A.
On 21 May 2026 the Competition and Markets Authority decided that the undertakings in lieu offered by Welltower and Apex, or a modified version of them, might be accepted under section 73 of the Enterprise Act 2002. The Phase 1 investigation into four completed acquisitions of care homes managed by Barchester, HC-One, Aria Care and Danforth Care had found competition concerns in 30 local areas across England and Scotland. The interesting feature for regulated-sector M&A teams is not the deal but the doctrine. The CMA reached the 30-area finding by applying the same catchment-area methodology it uses across grocery, cinema, vet practices, fuel retail and energy. The methodology is portable. This note sets out the geographic market definition framework under UK and EU competition law and translates it to telecoms, payments and digital infrastructure transactions.
The CMA’s catchment-area methodology in Welltower
The CMA’s Welltower / multiple care homes inquiry covered over 600 operational care homes plus a further number with planning permission granted. Phase 1 launched on 9 March 2026 with a statutory deadline of 8 May 2026 and an undertakings in lieu offer deadline of 14 May 2026. The 21 May 2026 decision is the section 73(1) “reasonable grounds for believing acceptable” stage; final acceptance follows consultation under Schedule 10 to the Enterprise Act 2002.
The CMA’s geographic analysis followed standard practice for local services. Care home residents typically choose homes within short drive-time distance of family and familiar social networks. The relevant geographic market is therefore local rather than regional or national, and the appropriate frame is the catchment area of each home. The CMA mapped postcode-level customer origin data against drive-time isochrones to identify pairs of homes where the merger combined a Welltower-acquired home with another Welltower-controlled home within the catchment, and assessed whether the combination materially weakened competition. The result was 30 discrete local areas of concern, each of which would need a remedy if the deal were to clear Phase 1 without a reference.
The CMA has applied the same toolkit in earlier local-market mergers. Sainsbury’s-Asda (2019) produced 629 grocery and 129 fuel local areas of concern. JD Sports-Footasylum (2020) ran the same exercise on clothing retail. The 30-area Welltower finding sits at the lower end of volume but uses the same analytical engine: postcode-level overlap mapping, isochrone analysis, catchment-by-catchment assessment of competitive effect.
The Phase 1 UIL route is the relevant settlement track. The CMA’s revised Merger Remedies guidance (CMA87), published 19 December 2025, incorporates the “4Ps” framework (pace, predictability, proportionality, process) and removes the previous presumption against behavioural remedies at Phase 1. The revised guidance applies to mergers where the formal Phase 1 investigation commences on or after 19 December 2025, which captures Welltower.
UK doctrine: SSNIP, the share of supply gateway and the cases
The hypothetical monopolist test sits at the heart of geographic market definition in UK competition law. The CMA’s Merger Assessment Guidelines (CMA129, March 2021) set the framework. The relevant geographic market is the smallest area within which a hypothetical monopolist could profitably sustain a small but significant non-transitory price increase, having regard to areas to which customers could switch. The “substantial part of the United Kingdom” wording in section 23 of the Enterprise Act 2002 is the jurisdictional gateway: a 25 per cent share of supply within a substantial part of the UK is sufficient to engage CMA jurisdiction even where the national share is lower. The South Yorkshire Transport line of authority confirms that a region, a city or a cluster of postcodes can qualify as a substantial part.
Authority falls into three categories. Court decisions set the legal precedent. Regulator decisions apply that precedent across sectors. Regulator guidance frames the analytical practice.
Chester City Council v Arriva Plc [2007] EWHC 1373 (Ch) is a useful first-instance High Court anchor on the framework. The Chancery Division applied the dual product and geographic structure of the inquiry, treated market definition as a tool for identifying competitive constraints, and held that low entry barriers and contestability can defeat a share-based dominance argument even on a narrow market frame. The court dismissed the claim because the claimants had not proved a market confined to local bus services and Arriva had not been shown to dominate the candidate market. The decision is not Court of Appeal authority and its precedential weight for CMA merger practice is limited, but it remains a useful judicial articulation of the test under Chapter II of the Competition Act 1998.
Regulator decisions apply the precedent. The OFT in Cardiff Bus (18 November 2008) rejected supply-side substitution as a ground to widen the geographic market where entry required sunk depot investment and local presence. The OFT in Reckitt Benckiser (13 April 2011) defined a UK-wide pharmaceutical market because national marketing authorisation, NHS reimbursement and prescribing practice produced uniform conditions within the UK and different conditions outside it. The CMA in Heineken / Diageo Assets (27 January 2016) proceeded on a GB-wide frame for beer because conditions in Northern Ireland diverged and the precise boundary did not affect the outcome on the narrowest plausible basis. The CMA in Barry Callebaut / Burton’s Foods (8 November 2018) rejected a wider-than-UK market on transport-cost grounds. The CMA in ATG Media / Lot-tissimo (2 August 2018) found a national frame for online auction platforms because foreign platforms did not constrain UK auction houses. The CMA in Interserve / Initial Facilities (30 June 2014) accepted that customers preferred providers with local presence but assessed the merger on a UK basis.
Regulator guidance frames the analytical practice. CMA129 sets the SSNIP methodology, the catchment-area approach and the cellophane fallacy in dominance cases. CMA2 (revised 19 December 2025) sets the jurisdictional and procedural framework. CMA87 (revised 19 December 2025) sets the remedies framework, including the “4Ps” approach and the removal of the Phase 1 presumption against behavioural remedies.
The CMA does not always need to define the market. In Chapter I object infringement cases the CMA may decline to fix exact boundaries where that is unnecessary to determine whether the conduct restricts competition (see Digital pianos and Supply of products to the furniture industry). In merger control the CMA may leave the precise boundary unresolved where the assessment is the same on the narrowest plausible basis (Heineken / Diageo Assets and Interserve are the standard citations).
The EU comparator: 2024 Notice and section 60A
The European Commission’s Notice on the definition of the relevant market for the purposes of EU competition law (Communication C/2024/1645), adopted 8 February 2024 and published in the Official Journal on 22 February 2024, replaced the 1997 Notice. The 2024 Notice preserves the homogeneity-of-conditions test and the SSNIP framework, and adds express guidance on digital markets, multi-sided platforms, ecosystems, innovation-intensive industries and sustainability parameters. The relevant geographic market remains the area in which undertakings face sufficiently homogeneous competitive conditions and which is distinguishable from neighbouring areas in which conditions differ appreciably.
Section 60A of the Competition Act 1998, inserted by the Competition (Amendment etc.) (EU Exit) Regulations 2019 (SI 2019/93), requires UK competition authorities and courts to act with a view to securing no inconsistency between the treatment of UK competition questions and the corresponding EU position, subject to a defined set of exceptions (including where the divergence is justified by a relevant change of circumstances or where the court or the CMA considers departure appropriate). The duty is therefore one of qualified alignment rather than absolute consistency. For market definition the practical effect is that the analytical structure under the 2024 Notice and CMA129 continues to inform UK practice, even as formal jurisdictional and procedural divergence accumulates.
For the electronic communications sector specifically, the EU ex ante regime under Commission Recommendation (EU) 2020/2245 of 18 December 2020 supplies a structured bottom-up geographic methodology. National regulatory authorities identify basic geographic units of suitable size and aggregate them where competitive conditions are sufficiently similar, taking account of network footprint, the number and strength of competing networks, market shares and their trends, localised versus uniform pricing, and demand-side behaviour including switching and churn. The methodology maps closely onto Ofcom’s Area 1, 2 and 3 separation in the Wholesale Fixed Telecoms Market Review 2021-26 and the Telecoms Access Review 2026-31. The Commission’s earlier Notice on access agreements in telecommunications of 11 March 1997 remains in force as a Commission soft-law instrument and continues to bear on Article 102 TFEU analysis in the electronic communications sector.
Cross-sector translation: what telecoms can learn from geographic market definition
Telecoms has historically defined geographic markets at the national wholesale level, anchored on the Openreach footprint. That framing fits the regulated remedies it supports. It does not fit CMA merger analysis. The CityFibre / nexfibre and the local market definition question post on bratby.law sets out the live example: CityFibre asked the CMA to assess the nexfibre / Substantial merger by reference to local fibre footprints, not the national wholesale market, because in selected localities the overlap controlled the economic analysis of competitive constraint. Whether the CMA adopts the local frame turns on the granularity of overlap evidence and the rebuttal on switching at the wholesale layer. The nexfibre / Substantial inquiry post and the Gamma Communications takeover post carry the procedural detail. The wider lesson for telecoms deal teams sits in the observation that the regulator’s established geographic frame and the CMA’s merger geographic frame do not always coincide.
Payments is at the other extreme of the geographic spectrum. Card acquiring and scheme governance operate on national or EEA-wide markets because the regulatory and scheme architecture is national or supranational. The PSR’s market reviews and the CMA’s payments practice typically frame at national level. Where local elements emerge, they tend to be at the acceptance terminal level (small-business acquirer relationships, regional acquirer concentration) and are tested through demand-side substitution analysis. The methodological move is the same as in Welltower: ask whether the candidate national frame breaks down in identifiable sub-areas.
Digital infrastructure mergers span both extremes. Subsea cable and tower deals run on national or international markets. Fibre alt-net consolidation raises the local-frame question CityFibre put to the CMA on nexfibre. Data centre M&A is national but with regional concentration concerns. In each case the deal team first identifies the candidate geographic market, then tests it against demand-side and supply-side substitution evidence drawn from internal documents, customer switching data and price correlation analysis.
The Phase 1 settlement route under section 73 of the Enterprise Act 2002 is the same instrument in telecoms, payments and digital infrastructure deals as it is in care homes, although the CMA’s assessment of whether undertakings in lieu adequately resolve a particular competition concern remains case-specific. The CMA accepts undertakings in lieu of a Phase 2 reference where the proposed remedy resolves the competition concern at Phase 1. The revised CMA87 guidance published on 19 December 2025 widens the field: behavioural remedies are no longer disfavoured at Phase 1, which gives operators with discrete local overlaps a route to clearance that does not require a structural divestiture package. Regulatory due diligence on geographic overlap therefore belongs on the deal critical path, not the post-signing workstream.
What telecoms can learn
Three points stand out for regulated-sector M&A teams. First, regulators define markets differently for ex ante regulation and for ex post competition analysis. Ofcom defines wholesale and retail markets to designate significant market power and impose conduct requirements; the CMA defines markets to assess whether a merger gives rise to a substantial lessening of competition. The two definitions can diverge sharply where the regulated regime treats the country uniformly but the economic analysis of the deal points to local competition. Welltower sits on the local side. The WFTMR Area 2 and Area 3 separation acknowledges the local side in fixed access. Mobile typically sits on the national side.
Second, catchment-area economic analysis is portable. The methodology the CMA developed in grocery (Sainsbury’s-Asda), cinema (Cineworld-Empire), vet practices and care homes applies across sectors. Where the deal raises local overlap concerns, the CMA reaches for the same toolkit: postcode-level customer-origin data, drive-time isochrones, store-pair overlap mapping, switching surveys. Telecoms infrastructure deal teams who arrive at pre-notification with that work already done clear Phase 1 faster than those who arrive with a national-frame submission.
Third, the 2024 Commission Notice is part of the UK analytical structure under section 60A. The Notice’s treatment of multi-sided platforms, ecosystems, innovation competition and sustainability parameters informs the analytical practice that UK competition authorities apply. Where a UK deal also engages an EU merger filing, the structural alignment under section 60A matters at filing stage; where it engages only UK process, the 2024 Notice is the closest comparator for the CMA’s expected line on digital and innovation markets.
Viewpoint
The CMA will assess a future deal on a local geographic frame where the economic analysis supports it. The harder problem is what the operator brings into pre-notification. The strongest pre-notification packages start with the deal team’s own local mapping, not the CMA’s.
Frequently asked questions
What is geographic market definition in CMA practice?
Geographic market definition identifies the area within which competition for the relevant product or service takes place. The CMA’s Merger Assessment Guidelines (CMA129, March 2021) apply the SSNIP framework: the geographic market is the smallest area within which a hypothetical monopolist could profitably sustain a small but significant non-transitory price increase, having regard to areas to which customers could switch.
What does the CMA’s 21 May 2026 Welltower decision say about geographic market definition?
The CMA decided that there are reasonable grounds for believing the undertakings in lieu offered by Welltower and Apex (or a modified version) might be accepted under section 73 of the Enterprise Act 2002. The Phase 1 investigation identified competition concerns in 30 local areas across England and Scotland, applying the CMA’s standard catchment-area methodology for local services. Final UIL acceptance follows consultation under Schedule 10 to the Enterprise Act 2002.
Has the EU Commission’s market definition framework changed recently?
Yes. The Commission’s Notice on the definition of the relevant market for the purposes of EU competition law (Communication C/2024/1645) was adopted on 8 February 2024 and replaces the 1997 Notice. The 2024 Notice preserves the homogeneity-of-conditions test and the SSNIP framework, and adds express guidance on digital markets, multi-sided platforms, ecosystems, innovation-intensive industries and sustainability.
Does the 2024 Notice apply in UK proceedings?
The 2024 Notice does not bind UK competition authorities directly, but under section 60A of the Competition Act 1998 UK competition authorities and courts are required to act with a view to securing no inconsistency between the treatment of UK competition questions and the corresponding EU position. The analytical structure under the 2024 Notice and CMA129 is therefore aligned in practice.
Can Phase 1 UIL acceptance still resolve a multi-area local-overlap case?
Yes. The CMA’s revised Merger Remedies guidance (CMA87), effective from 19 December 2025, incorporates the “4Ps” framework (pace, predictability, proportionality, process) and removes the presumption against behavioural remedies at Phase 1. UIL acceptance under section 73 of the Enterprise Act 2002 remains the principal Phase 1 settlement route.
For advice on geographic market definition in CMA merger control, regulatory due diligence on local-overlap M&A, or the EU 2024 Notice as it applies to UK transactions under section 60A, contact Rob Bratby at Bratby Law.
