Brexit by topic | Competition |

Brexit: Competition Law

Overview

Leaving the EU could allow the UK to diverge from EU competition law, but in our view this is unlikely to be a priority area for reform. Key issues in the short term will be how far the UK courts can continue to have regard to EU case law after Brexit and whether the CMA will have adequate resources to cope with a likely increase in workload.

Merger Control

Certain transactions will no longer benefit from "one stop shop" merger control review under the EU Merger Regulation ("EUMR") and will therefore potentially face additional scrutiny from the UK Competition and Markets Authority (CMA).   This may have resource implications for the CMA, which will face an increase in notifications.  Leaving the EU would also leave the UK free to widen the circumstances in which the government can intervene in mergers on public interest grounds, although the trend over the past few decades has been towards leaving the majority of decisions to the CMA (and its forerunner, the OFT).

Vertical Agreements

Brexit will potentially allow absolute territorial protection (currently prohibited under EU law) to be granted to distributors in the UK - although depending on the context, such agreements could still be subject to challenge under post-Brexit UK competition law.

UK Competition Law (Abuse of Dominance, Cartels etc)

Brexit will probably lead to more enforcement action by the CMA, as it will have sole jurisdiction in the UK (but will often be enforcing alongside the European Commission in relation to e.g. Europe-wide cartels).  As with mergers, this may have resourcing implications for the CMA.  On Brexit, the UK could potentially choose to diverge from EU competition law, although it seems to us unlikely that this will be a priority area for reform.

UK competition law is also based very heavily on case law and legal concepts developed in EU competition law over many years. It is therefore important in our view that UK courts should be able to continue to at least have regard to such case law where appropriate (even if they will no longer be bound by it after Brexit).  If they are unable to do so, this may give rise to considerable uncertainty over how UK competition law should be applied in future.