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            Impact of no-deal Brexit on mergers and antitrust cases

            In the event of a no-deal Brexit, the UK will leave the EU and will not be part of the EU competition system. This will affect merger cases and antitrust investigations. The Department for Business, Enterprise, Innovation and Skills (DBEIS) has issued a guidance on what companies and stakeholders need to be aware of and the UK Government has published further competition Brexit legislation. 

            Date: 26/09/2019

            If there is a no-deal Brexit, the European Commission will no longer have jurisdiction to investigate UK elements of a merger or a case which involves companies' anti-competitive behaviour in the UK.  It will be for the Competition and Markets Authority (CMA) to take on these mergers and cases exclusively. This will also include on-going mergers and antitrust cases (opened by the European Commission prior to Brexit) which have a UK element.  

            Companies should be aware that there may be no agreement on jurisdiction for these cases in a no-deal scenario and should continue to be complaint with UK and EU competition rules according to the geographic jurisdictions in which they operate. No further actions will be needed by companies unless they are subject to ongoing investigations. 

             

            Mergers

            Post-Brexit, companies considering a merger transaction which may affect the UK and the EU market, will have to comply with both EU and UK merger control rules and liaise with both competition authorities, the EU Commission and the CMA, if the relevant thresholds in both jurisdictions are met (noting that turnover in the UK would no longer constitute EU turnover for the purposes of the EU rules).  

            For on-going merger cases where a decision will not be taken before Brexit, merging parties need to contact the CMA and the European Commission to query whether additional notifications are needed. It is to be expected the respective enforcement bodies (the European Commission and CMA) will cooperate carefully with each other, but merging parties will still need to satisfy themselves that all relevant jurisdictional rules are observed.

             

            Antitrust

            Companies with operations in both the UK and the EU markets will need to ensure compliance with both sets of competition rules post Brexit. Any potential breach of these rules may lead to parallel investigations by the CMA and the European Commission where there are anti-competitive effects in both markets.

            For on-going antitrust cases, companies should seek legal advice on how best to ensure compliance with EU and/or UK competition rules going forward.  Again, it is to be expected the respective enforcement bodies will cooperate carefully with each other, but merging parties will still need to satisfy themselves that all relevant jurisdictional rules are taken into consideration.

             

            Block Exemptions

            EU block exemption regulations will continue to apply as parallel exemptions under UK law post-Brexit  and the relevant agreements could continue to benefit from them. However, companies will have to self-assess that they continue to fall within the criteria of the relevant exemptions going forward.

             

            Action for damages

            Companies and consumers wishing to bring an action for damages before the UK courts as a result of a competition law infringement, will not be able to rely on decisions by the EuropeanCommission after Brexit and therefore should seek legal advice on how to pursue these claims.  

             

            New Competition regulations 2019

            The Government also published the text of a second Competition Brexit SI – the Competition (Amendment etc.) (EU Exit) (No.2) regulations 2019.  The new Regulations will take effect in a no-deal Brexit scenario, and cover the issue of commitments given to the EU Commission before exit day, in the context of its merger cases and antitrust investigations, and which relate to the supply of goods or services in the UK. The new Regulations provide a list of the relevant merger decisions with a UK element made prior to 15 August 2019 and a general provision provides that any further UK-related EU commitments adopted before exit day will also be preserved. This is in order to ensure that the relevant commitments can operate effective in the UK post-Brexit. 

            The new Regulations also deal with the law and procedural issues in relation to action for damages as a result of a EU and UK competition law breach and which involve conduct which continues after Brexit. 

            Related people

            Jonathan Branton

            • Partner // Head of Public Sector // Head of EU Competition

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