The content of UK competition law (the Competition Act provisions on the prohibition of agreements which restrict competition and of the abuse of a dominant position) is not imposed or directed by EU legislation, but nonetheless closely mirrors the framework of the equivalent rules in the EU Treaty. Historically the UK has been at one with the European Commission on competition law policy and enforcement, and there is no suggestion that the substantive provisions of the Competition Act will change following a Brexit. However, a solution or replacement will need to be found for reliance on parallel application of current EU ‘block exemption’ regimes to provide legal certainty for large categories of beneficial or innocuous agreements, particularly in relation to e.g. ‘vertical’ agreements where policy on former ‘single market’ objectives such as the prohibition of absolute territorial protection may change.
The UK has (in the Enterprise Act) already gone farther than the EU by making it possible for individuals to be disqualified from acting as directors where a company of which they are a director commits a breach of competition law, and by making it a criminal offence for an individual to engage in cartel conduct. Again, there is no suggestion that the Enterprise Act provisions will change following a Brexit. Likewise, provisions in the Consumer Rights Act facilitating the bringing of actions for damages for breach of competition law, including ‘opt-out’ class actions, which go beyond anything provided for at EU level will be unaffected.
UK companies doing business in the EU will continue to be subject to EU competition law, and may in certain situations find themselves having to deal with parallel proceedings at both UK and EU levels for the same issue.
In the field of merger control the UK has its own Enterprise Act regime (which differs from the EU ’norm’ by being a voluntary notification system) and once again there is no suggestion of any change following a Brexit, although there could be greater scope than at present for political intervention in merger control on issues such as protection of employment. However, the ‘one-stop’ EU merger control regime will cease to cover the UK and certain transactions may become subject to parallel review by EU and UK competition authorities.
In the field of ‘state aid’ the UK government will have greater flexibility to provide aid to UK businesses or industries following a Brexit if it so chooses, but by the same token the UK government and UK businesses will have less ability to complain about aid granted by EU Member States to their own companies or industries.
Finally, it should be borne in mind that a future trade deal to be negotiated between the UK and the EU may well include specific provisions on competition law, on state aid and on public procurement.
If you have any further questions regarding the impact of Brexit on competition law, please do not hesitate to contact Nick Bromfield, Consultant of Dispute Resolution at Thomson Snell & Passmore LLP on 01322 623717 or at firstname.lastname@example.org.