Implications of Brexit for competition

Written on 13 Aug 2018

Is any new EU legislation expected to come into force and effect before the end of the transition period?

The Geoblocking Regulation takes effect from 3 December 2018. The Regulation addresses “unjustified” geo-blocking and other forms of discrimination based on customers’ nationality, place of residence or place of establishment.

Is a new regulator needed, or do additional powers to be given to an existing regulator?

At present, the Competition and Markets Authority has responsibility for enforcing competition law in the UK. This will continue after Brexit, but the CMA will also take on other responsibilities. In March 2018, the UK government announced that the CMA would become the regulator for State aid in the UK, and the CMA has had a budget increase of £20m per year to cover this.

For multi-jurisdictional, non-State aid competition-law issues, the position is currently less clear.

Is there an existing “equivalence” or “recognition” regime for recognising Third Country regulatory regimes?

EU competition law does not have an equivalence regime, but the UK may need to (and has said it intends to) keep its competition and State aid regime close to the EU regimes as part of a future deal.

Does current UK government policy mean that (subject to the terms of a future trade agreement between the UK and the EU) material changes to regulation or enforcement are likely post-Brexit?

The UK government has made it clear on several occasions in recent months that it does not intend to make any substantive changes to UK competition law. It recognises the value in keeping UK competition law closely aligned to EU law.

In terms of enforcement in the UK, following the end of any transition period (if one is agreed), the CMA will become the primary enforcement agency in the UK. The European Commission will no longer have a direct role. This will be the case not only for competition law enforcement, but also for the State aid (anti-subsidy) rules.

What should businesses be doing now to prepare for Brexit?

  • If you are subject to any on-going investigations or enquiries at EU level, find out how these will be managed if they continue post-Brexit.
  • If you are a recipient of State aid (such as government grant funding), verify what the position is for post-Brexit auditing and/or clawback.
  • Continue to prioritise competition law compliance within your business – the CMA has indicated that it will be launching more enforcement action and investigations in the UK post-Brexit.