Make sure they don't get Banksy-ed in a no-deal Brexit scenario…
The UK Competition and Markets Authority (CMA) has published this week a number of technical notices setting out the status of antitrust cases and mergers in a "no deal" scenario.
These are particularly helpful and relatively clear for antitrust cases and mergers that have already been notified to the European Commission (EC) but where the EC is yet to take a formal decision. It is, of course, possible that the interpretation of the notices will be the subject of litigation but the attempt to give certainty is to be welcomed.
Key highlights include:
If the EC has opened an investigation in relation to Art. 101/102 TFEU but not published a decision before the UK exits the EU:
- TheThe CMA is prevented from opening investigations into infringements of UK competition law after exit where, before exit, the EC relieved the CMA of its competence and has reached an infringement decision.
- The CMA may, however, conduct investigations into breaches occurring before or after exit day, including in cases where the CMA was relieved of its competence by the EC but where the EC did not make a decision before exit. This could potentially cover both the situation where the CMA was relieved of its competence but the EC subsequently decided not to pursue the case on prioritisation grounds, or where the EC is yet to decide whether it will pursue a case.
If the EC has granted a marker and/or accepted applications for leniency before the UK exits the EU, but has not yet formally opened an investigation:
The CMA restates that even before exit, there was no "one-stop shop" principle, so leniency applications to the CMA where necessary are advised.
Note that the CMA does not say anything about whether summary applications ought to be "perfected" / "supplemented" post exit: the CMA merely notes that any existing or potential applicant for leniency to the EC in respect of conduct which is also covered by the CMA's leniency policy should make a separate application for leniency to the CMA "as would have been the case pre-exit".
- Confirm with the CMA if your summary application needs to be "perfected" / "supplemented" before exit.
- Check (again) if the conduct you have just reported to the EC also concerns the UK market and if it does, carry out a risk-based analysis to inform your reporting strategy in the UK.
Block Exemptions: post-exit agreements that met the criteria of the 7 EU block exemption regulations will remain exempt from the UK competition law prohibitions.
- If the EC has issued a decision on or before 29 March 2019 then, unless the decision is annulled, in full or in part, following an appeal, the CMA has no jurisdiction over that same concentration.
- If the EC has not issued a decision on or before 29 March 2019 then the CMA has jurisdiction to review the merger subject to the UK merger control thresholds being met.
- The CMA will continue to monitor non-notified merger cases, including cases falling under the jurisdiction of the EC over which the UK may obtain jurisdiction over the UK aspects of the merger after 29 March 2019.
- Practical tip: where you anticipate this type of scenario, make sure you engage with the CMA at an early stage, particularly where the transaction may raise potential competition concerns in the UK.
How will the two competition regimes work in parallel?
- At a more general level, in a no-deal scenario, Section 60 of the UK Competition Act 1998 will be repealed in its entirety. Section 60 currently requires the Chapter I and Chapter II prohibitions to be interpreted so far as possible consistently with the approach under Art.101/102 TFEU.
- Under the proposed Competition SI, however, Section 60 is repealed and replaced with a new Section 60A which relates exclusively to EU Court judgments and EC decisions that pre-date exit day. There will be no legislative obligation on the UK Courts and decision makers to have regard to EU judgments or decisions that post-date exit day (although of course they may well choose to have regard to them). The obligation under S.60A can, however, be disapplied in certain scenarios, including where the pre-dating court judgment/decision no longer reflects the current state of the EU law. (s.60A(7)).