101 UK Brexit Notes

Connemara Programme October 16 2018 pg. 75 Once the UK has left the EU, although the European Commission may investigate mergers or anti-competitive conduct within the EU Single Market, it will no longer begin investigations into the UK aspects of mergers or cases involving anti-competitive conduct in the UK. Instead, the Competition and Markets Authority and regulators with competition enforcement powers (for example, Ofcom and Ofwat) will only investigate anti-competitive conduct that affects UK markets under UK competition law. The Competition and Markets Authority will be the only authority with jurisdiction to review mergers for their effects in the UK. In a ‘no deal’ scenario the UK will not be part of the EU Civil Judicial Cooperation regime, which governs certain aspects of claims for damages for infringements of EU competition law. The government’s technical notice o n Civil Judicial Cooperation explains the general implications of this change. If a decision is made by the European Commission after exit, claimants who wish to pursue private damages claims in UK courts for infringements of EU competition law will no longer be able to rely on that decision as a binding finding of an infringement in follow-on claims. Consumers and businesses will continue to be able to pursue private damages claims before UK courts based on Competition and Markets Authority decisions (or decisions by a competent sectoral regulator) under UK competition law. Implications The main change for businesses will be that, in some cases, mergers that currently meet the relevant EU thresholds will be reviewed by both the Competition and Markets Authority and the European Commission. Th e UK’s voluntary notification regime w ill remain. Similarly, after the UK exits the EU, companies may be investigated by both authorities in parallel for breaches of UK and EU antitrust rules where there are effects in both markets. UK businesses that conduct business in the EU (or that otherwise act in a way that affects competition in the EU) will continue to be subject to EU competition law. EU firms that conduct business in the UK will continue to be subject to UK competition law. Competition infringement decisions of the European Commission that are made before the UK exits the EU will continue to have the same legal status as they have now, meaning that claimants may bring follow-on claims based on those decisions in UK courts. Actions for businesses and other stakeholders Most businesses (those not subject to an ongoing investigation or considering a merger transaction) will not need to take any action except to continue to comply as normal with the prohibitions on anti-competitive agreements and the abuse of a dominant market position that will continue to apply in the EU and the UK. The EU merger regime continues to apply as normal until the point of exit. If businesses are considering a merger transaction in the run up to March 2019 and are in doubt as to whether parallel notification in the UK and the EU is advisable, they may want to consider early engagement with both the Competition and Markets Authority and the European Commission. Businesses that have made a merger notification but have not received clearance prior to March 2019 should approach the European Commission and the Competition and Markets Authority, who will be able to advise whether any further action is necessary to comply with the EU or UK merger control regime in the specific case. Businesses operating in the EU that meet EU turnover thresholds for merger review will still be required to notify the European Commission for clearance as they do now, subject to the fact that the UK will no longer be part of the EU for the purposes of the application of the relevant EU thresholds. After exit, because the EU’s “one-stop shop” for mergers will no longer be in effect in the UK, businesses considering a merger that has an impact in EU and UK markets after exit will need to comply with both EU and UK merger rules. Businesses benefiting from EU Block Exemption Regulations will wish to familiarise themselves with the modifications to the preserved block exemptions but should not be significantly affected by the changes. The European Commission will continue to have the power under EU law to investigate UK firms if they engage in conduct that distorts competition within the EU. EU businesses operating in the UK must comply with UK competition law as they do now. Businesses subject to an ongoing antitrust investigation should take independent legal advice on how to comply with any ongoing investigation of the European Commission and/or the Competition and Markets Authority (or the relevant UK regulator). Claimants who wish to pursue claims in UK courts based on alleged breaches of EU competition law that took place after exit will be able to do so on a standalone basis, as a foreign tort claim (a legal claim in the UK relating to a violation of foreign law). In a ‘no deal’ scenario, if companies or consumers wish to claim damages based on infringement decisions issued by both the European Commission and the UK authorities after exit, it may be necessary to make parallel claims before the UK courts and the courts of an EU member state. Claimants pursuing claims for damages in UK courts, based on decisions of the European Commission or member state competition authorities that are made before exit, may bring those claims in UK courts. Claimants should consider the applicability of damages claims in EU member states in the light of the government’s Technical Notice on Civil Judicial Cooperation.