Report on Brexit and competition law

Posted on 31 Jul 2017 by Brick Court

Maya Lester QC

The Brexit Competition Law Working Group has just published its conclusions and recommendations, link here. In summary, the report states that:

1. The interests of the UK economy, and those of businesses and consumers within it, will be best served by continuity of UK competition law and policy, so far as is possible following Brexit.

2. Brexit does not give cause for radical reform of the principal UK competition statutes, nor of the role of the competition authorities. But primary legislation will require amendment. In particular, the report recommends that the duty in section 60 of the Competition Act for the UK authorities and courts to act consistently with EU becomes simply a duty to ‘have regard to’ that jurisprudence. It recommends repeal of section 10 the the Competition Act so that future EU block exemptions from the competition rules are not automatically imported into the UK; they would instead become a matter for the UK to decide. To preserve continuity of the ability of private parties to bring actions for damages in the UK for breaches of EU (as well as UK) competition law, the report recommends retaining sections 47 and 58 of the Act.

3. For mergers and market investigations it recommends retaining the existing statutory criteria, notably the ‘substantial lessening of competition’ test for mergers, and not to vary the existing public interest criteria. For market investigation references, while the CMA should not have an unfettered discretion in its choice of legal instrument when investigating agreements that might be harmful to competition, the Working Group recommends against retaining a domestic analogue of the current EU provision that precludes remedies relating to agreements between firms that go further than the antitrust rules.

4. The report includes recommendations on the carrying forward of commitments from past antitrust and merger cases, and of leniency arrangements, and for mergers that ‘straddle’ the date of Brexit, and (in the longer run) parallel UK/EC investigations, both of mergers and antitrust issues. It also addresses the need for more resources for the CMA.