On 1 January 2021, the United Kingdom completes the process of separating from the European Union. However, the split between the UK and EU regimes will be a gradual process rather than a swift surgical cut, due to the treatment of ongoing cases and various substantive connections. Nevertheless, now is the time for companies to incorporate any (potential) additional merger filing obligations and antitrust implications into their daily routines. It is also advisable to double-check whether current agreements may need to be revised to anticipate the upcoming expiry dates for EU block exemption regulations retained under the new regime. Check our post-Brexit checklist to see what lies ahead. First: get the ground rules straight However, before diving into these checklists, it is important to realise that Brexit does not alter the principles underlying the territorial application of EU competition law. According to EU case law, EU competition rules (Articles 101 and 102 TFEU) apply to companies regardless of their whereabouts, as long as their anti-competitive conduct is implemented or produces effects within the EU. So even though the UK is no longer part of the EU, the European Commission can still apply EU competition rules to UK companies. The difference is that post-Brexit the Commission will no longer be able to conduct dawn raids in the UK, or request the CMA to do so on its behalf. Instead, it will have to make do with requiring UK companies to provide it with all necessary information for the purpose of its investigations. Similarly, Brexit does not alter the UK Competition and Markets Authority’s power to investigate suspected infringements of UK domestic competition law. The difference is that post-Brexit, the UK Competition and Markets Authority (CMA) and concurrent regulators will no longer have the power to apply EU competition rules. Instead, they will be confined to investigating anti-competitive conduct that may affect trade within the UK. This also means that, after 31 December 2020, the CMA will have to drop any EU elements in its ongoing investigations. According to the CMA’s guidance document, all actions taken before 31 December 2020 related to these EU elements will – after that date – be treated as having been carried out for the purpose of the UK elements of the investigation only. Companies may need to (re)consider whether and where to file for leniency after that date, as summary applications in Commission immunity application cases will no longer be available. In short, even in a post-Brexit world, it is still important for companies:
- to comply with the EU competition rules; this is still key, as conduct by UK companies can still be caught under these rules,
- to comply with the UK competition rules; also still key, as conduct may be investigated by the Commission and CMA in parallel.
The checklists below provide pointers for companies at each stage of their antitrust and merger cases, post-Brexit. Second: consult the checklists The following checklists provide a brief overview of the legal implications of Brexit for merger and antitrust cases, and provide practical pointers for companies. More information can be found in the European Commission’s notice to stakeholders and the CMA guidance document.