The implications of Brexit for the UK competition regime: new report published

The Brexit Competition Law Working Group (“BCLWG”) has today published its draft report on the implications of Brexit for UK competition law and policy.

The draft report will be discussed at a half-day conference on 2 May 2017 and written comments are also invited by 15 May 2017 (contribute@bclwg.org).  A final report will be then be produced.

Some of the key recommendations are as follows.

• Section 60 of the Competition Act 1998 (“CA98”) should be amended such that, when applying the Chapter I and Chapter II prohibitions, UK authorities and courts are only required to ‘have regard to’ EU judgments relating to Articles 101 and 102 (at the moment these are effectively binding).
• Existing EU block exemption regulations should continue to exempt agreements from the Chapter I prohibition.  However, new regulations issued after Brexit should not result in ‘parallel exemptions’ under the CA98.  Instead, the CMA should enact its own domestic block exemptions under section 6 CA98.
• Sections 47A and 58A of the CA98 should be retained so as to preserve the ability of private parties to bring EU ‘follow-on’ damages actions relating to breaches of Articles 101 and 102 in which Commission infringement findings are binding on the issue of liability.
• The current statutory criteria for mergers and market investigations should be retained.  In particular, the group recommends against expanding the role of public interest criteria under the merger regime.
• Commitments from past antitrust and merger cases should be ‘nationalised’ under the Great Repeal Bill, and the CMA should adopt any pre-Brexit leniency offers made by the Commission.
• Arrangements will need to be put in place for close cooperation between the CMA and Commission, not least to deal with difficult transitional issues arising from cases which straddle the date of Brexit.
• Brexit will lead to a significant increase in the CMA’s merger workload, i.e. because of the end of the one-stop-shop.  A substantial increase in the CMA’s resources will be needed if its other activities are not to be squeezed.

There is considerable common ground on these points between the BCLWG draft report and the two other weighty reports that have been produced on this subject, namely those by COMBAR and the City of London Law Society. This largely reflects a widespread desire amongst the legal community to promote legal certainty by minimising regulatory upheaval, an objective shared by the Government.

The Government’s proposed approach has recently been set out at some length in its White Paper on the Great Repeal Bill.  The White Paper is mentioned in the BCLWG document, but it was published relatively late in the day after the group had done much of its thinking.  One issue for discussion at the 2 May conference and which needs to be considered further before the report is finalised is whether the broader legislative approach of the Government that is starting to emerge has additional implications in the field of competition policy.

This and various related issues will be discussed in subsequent posts.

Jon Turner QC is a member of the BCLWG and Julian Gregory has been helping the group with its work.