No-deal Brexit impact on mergers and anti-competition activity
9 Aug 2019
The Department for Business, Energy and Industrial Strategy (BEIS) has published guidance on how merger reviews and investigations into anti-competitive activity would be affected in the event of a no deal Brexit later this year
9 Aug 2019
After the UK leaves the EU it will no longer be part of the EU competition system, meaning the European Commission will no longer begin investigations into the UK elements of mergers or cases involving anti-competitive conduct in the UK.
Instead, the Competition and Markets Authority (CMA) will be responsible for investigating mergers and cases of anti-competitive conduct which affect the UK market.
The CMA will also take jurisdiction of the UK aspects of live EU antitrust and merger cases that the European Commission was investigating before Brexit, but which have not yet been decided.
BEIS notes that businesses should be aware that it is possible that there will be no agreement on jurisdiction over these cases.
Businesses operating in the UK must continue to comply with UK competition law as they do now and those operating in the EU must comply with EU competition law.
The EU merger system will continue to apply to the UK until the point of Brexit. Businesses considering a merger which will have an impact in both the UK and EU single market will need to comply with both EU and UK merger rules. Businesses should contact both the CMA and the European Commission where they meet the relevant thresholds.
For live EU merger cases with UK aspects, where businesses do not expect to receive an EU decision before exit, they should contact the CMA and the European Commission to find out if they need to make parallel notifications.
Businesses subject to an ongoing antitrust investigation at the point of exit are advised to take independent legal advice on how to comply with any ongoing investigation by the European Commission and/or the CMA.
Businesses operating in the UK and the EU will need to comply with the UK and the EU antitrust rules. Breaches of these rules may be investigated by both the CMA and the European Commission in parallel where there are effects in both markets.
The EU block exemption regulations that currently exempt certain types of agreements from competition rules where there are benefits for consumers will be preserved in the UK.
BEIS notes that businesses will want to satisfy themselves that they continue to fall within the terms of the preserved exemptions, but says the intention is that agreements that benefit from these exemptions should continue to do so.
Businesses or consumers who wish to claim damages based on competition infringement decisions will not be able to rely on decisions made by the European Commission after Brexit day in the UK courts. They are advised to take independent legal advice about pursuing any claim.
Pat Sweet | 09-08-2019