This briefing was updated in February 2021.
What difference does the end of the Brexit transition period on 31 December 2020 make to UK and EU competition law? And how likely is it that the UK will increasingly diverge from the EU in its approach to competition law?
EU competition law will cease to apply in the UK
After the Brexit transition period has ended, the general competition law provisions of Article 101 (prohibiting anti-competitive agreements) and Article 102 (prohibiting abuse of dominance) of the TFEU will cease to apply in the UK (although see the discussion of ongoing investigations below). However, UK businesses could continue to be investigated and potentially fined by the European Commission for infringements which relate to the remainder of the EU, in the same way as many companies based in third countries have been to date.
UK national competition law - in the form of the Chapter 1 and Chapter 2 prohibitions of the Competition Act 1998 - will also continue to apply. The main impact for businesses is likely to be procedural: for example, after the end of the transition period, the European Commission will not be able to carry out "dawn raids" in the UK in order to gather information on possible infringements (although see textbox below headed "Ongoing Investigations"). However, UK firms may find that the UK Competition and Markets Authority (CMA) will decide to open its own investigations in parallel to those of the European Commission (and the CMA can also conduct "dawn raids" - although only in the UK, not the EU).
The Withdrawal Agreement provides that, where an investigation has formally commenced before the end of the transition period, the European Commission can complete the process and its decision will be binding as regards the UK (even if it is not issued until after the end of the transition period). The Commission will retain all its usual powers in relation to such investigations, including the ability to conduct dawn raids in the UK. As antitrust investigations under Articles 101 or 102 typically take some time to conclude, it could be some years before this "wind down" process is complete.
In the UK, the CMA will cease to have any powers under Articles 101 or 102 after the end of the transition period. This means that, even where it has already started an investigation based on those powers, it will not be able to take a decision as to whether they have been breached. However, any CMA investigation under Articles 101 or 102 is also likely to involve the exercise of its powers under the Competition Act 1998. Since these powers are being retained, the CMA will still be able to pursue ongoing investigations to a conclusion; the sole difference is that it will only be able to make a decision as to whether the Chapter 1 or Chapter 2 prohibitions of the Competition Act 1998 have been infringed. If there has been a breach of those provisions, the CMA will still be able to impose remedies such as significant fines.