Competition Law and Policy After Brexit

Marie Elisabeth Luders building, Berlin, GermanyThe EU’s Competition law framework has had a significant impact on the evolution of UK Competition Law. UK prohibitions are modeled on their EU law equivalents and these have influenced much of the UK’s domestic law, such as the Consumer Rights Act 2015 or  the Competition Act 1998. In this regard, while there is likely to be little change of material substance for future UK competition practitioners, we consider other areas of competition law likely to be impacted by the UK’s decision to leave the European Union.

At present, both EU and domestic competition law apply to anticompetitive behavior taking place within the UK. The position post Brexit depends on the Article 50 negotiation process and the nature of the deal agreed. In this memo, we consider it unlikely that the UK will retain access to the internal market after the completion of that process; however, should the UK retain access through participation in the European Economic Area (EEA), there would be little change (the substance of EU competition rules is replicated within the EEA Agreement) and there would be little need to amend corresponding domestic rules.

The likely effect of the UK not retaining access to the internal market after the  completion of the Article 50 negotiation process has two principal dimensions: the non applicability of EU competition rules within the UK jurisdiction and the knock-on effects for existing domestic law.

Articles 101 and 102 would cease to apply in the UK and the EU Commission would lose its enforcement jurisdiction, including the power of pre-emption over the UK’s Competition and Markets Authority (CMA) under Regulation 1/2003. The CMA would no longer have any obligation to apply Articles 101 or 102 in domestic cases with a potential effect on trade between EU Member States; however, UK companies will remain within the jurisdiction of the EU Commission to the extent that anticompetitive behavior is implemented or takes effect within the EU

Finally, there is a challenge for the 27 EU Member States that remain. The UK has had significant influence over the tenor of economic development of the internal market; the UK’s departure removes a liberalizing force and we might see more interventionist competition policy emerging in the future.

To read more, this piece was originally published on ey.com

EY Legal Services Contact:

Juan Laiglesia

 

Juan Jimenez-Laiglesia – EU and Competition Law Partner

 

Pav

 

Pav Younis – Law Brexit Team Leader