Getty and Shutterstock proposed both structural and behavioural remedies to the UK Competition and Markets Authority (CMA) for their planned combination, according to sources familiar with the matter.

The CMA rejected the remedies today after finding that the deal may result in a “substantial lessening of competition” and the transaction will now move to a Phase II investigation.

The sources said that no market testing was carried out following submission of the initial remedy package. They added that discussions around additional remedies for Phase II are not taking place “at this stage” but noted that the CMA now has extra time for further assessment of the market.

The CMA said that a complex package of remedies was submitted “at a late stage” of its Phase I review and did not sufficiently address its concerns. However, the sources said there was no perception on the parties’ side that the remedies were submitted late.

The proposed remedy package included potential structural remedies, as reported by this news service last week (27 October).

In relation to UK editorial content, this could have included the sale of Rex Features, the UK-based photo agency acquired by Shutterstock for USD 33m in 2015. Addressing concerns in the wider global stock image market may require broader structural measures.

The sources said it is “impossible to say” whether the deal will close this year, as expected, as it will depend on the CMA’s timing.

Getty Images and Shutterstock said in statements this morning that they were “disappointed” by the CMA’s decision but remain committed to the transaction and intend to continue engaging with the regulator to secure approval.

When reached out for a comment, CMA pointed to their statement from this morning.