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Brexit Competition Law Working Group: report on Brexit and competition policy

Group of business people discussing in the office Print publication

03/08/2017

Background

 The Brexit Competition Law Working Group (BCLWG) was set up by Sir John Vickers, Professor Amelia Fletcher OBE, John Fingleton, Sir Nicholas Forwood QC, Ali Nikpay, Jon Turner QC and Professor Richard Whish QC (Hon), following the UK’s vote to leave the EU on 23 June 2016. The aim of the BCWLG is to foster public debate and inform government policy on the implications of Brexit for competition law and policy.

On 26 July 2017, the BCLWG published a report setting out its recommendations on the implications of Brexit for UK competition law and policy. The report can be found here.

Summary of report findings

 The report focuses on the impact of Brexit on the various elements of the UK competition regime and the consequent practical implications for enforcement of the competition rules. Its working assumption is that Brexit will result in the UK leaving the EEA and the “single market”. However, it notes that there is a possibility that the UK will remain in the EEA perhaps for a transitional period, which would require less change as most EU competition law and practice is replicated in the wider EEA.

The main conclusions and recommendations of the report are as follows:

  • The BCLWG’s overall view is that the interests of the UK economy, business and consumers will be best served by continuity of UK competition law and policy, so far as possible following Brexit.
  •  The BCLWG does not consider that Brexit gives cause for radical reform of the principal UK competition statues, nor of the role of the UK competition authorities. However, the BCLWG considers that primary legislation will require amendment particularly section 60 of the Competition Act 1998 (CA 1998) (to require UK authorities and courts to “have regard to” EU jurisprudence). It also recommends repeal of section 10 of the CA 1998 so that future EU block exemptions from the competition rules (e.g. the Vertical Agreements Block Exemption) are not automatically imported into UK law; they would become a matter for the UK to decide.
  •  To preserve continuity of the ability of private parties to bring actions for damages in the UK for breaches of EU (as well as UK) competition law, the report recommends retaining sections 47 and 48 of the CA 1998.
  •  In relation to mergers, the BCLWG sees no grounds for amending the existing statutory criteria, in particular a change to the substantive assessment of mergers (the “substantial lessening of competition” test). The BCLWG also does not consider that the current regime regarding the ability of the Government to intervene in mergers that raise public interest issues needs to be changed.
  •  The BCLWG has identified various complex transitional issues for both antitrust and merger investigations. It makes a series of recommendations on the carrying forward of commitments from past antitrust and merger cases, and of leniency arrangements. The BCLWG also identifies ways to address issues relating to cases that “straddle” the Brexit period and parallel EU and UK investigations. It recommends, in particular, that the Government seeks to negotiate continued membership of the UK within the European Competition Network, absent which bilateral co-operation agreements will be required.
  •  The BCLWG also addresses the implications for the Competition and Markets Authority in terms of resources, workload and priorities.

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