Brexit Withdrawal Agreement Competition Law

Sep 13, 2021 |

There may be some background music on this subject that suggests that a viable toolbox of aid mechanisms can be found, but it has not yet been articulated. In the absence of a state aid agreement, UK companies can expect enhanced EC control to address found breaches of the provisions of the final agreement on the future relationship between the UK and the EU or alleged breaches of the Recurrence Agreement on Subsidies and Countervailing Measures (SCM) in accordance with World Trade Organisation (WTO) rules. Accordingly, UK-based companies selling products in continental Europe should carefully assess the impact of a subsidy scheme that the UK Government may offer in the future and, in particular, take into account the risks that such regulation may entail for their market position and ability to sell in the EU. As regards merger control, anti-cartel investigations and its enforcement, there is already legislation on the `domestication` of competition law in the context of competition (amendment, etc.). (Leaving the EU) Regulations 2019, SI 1993 No 93 (the competition SI) (i.e. transposing existing EU legislation into UK law). This legislation will enter into force at the end of the transitional period. However, as far as state aid is concerned, the UK has not accepted the EU`s proposal to maintain the EU legal system, leading to a current and expected future conflict with the EU, as shown below. It remains to be seen to what extent the Commission and the CMA will cooperate after the transition period in the case of parallel investigations. The CMA stated that it was interested in maintaining a good working relationship with the Commission. In the context of merger control, which is often in the interest of the parties to agree on waivers of the disclosure of information to other regulatory bodies, cooperation between the two authorities should continue.

There are also a number of precedents of administrative cooperation agreements between the Commission and the competition authorities of third countries (e.g.B. with the U.S. Department of Justice and the Federal Trade Commission), which were adopted outside the scope of a formal trade agreement and set a precedent for a similar agreement with the CMA. If the EC has formally initiated proceedings before the end of the transitional period, the EC remains competent after the end of the transitional period (because the conduct took place when the United Kingdom was still a Member State). In addition, at the end of the transitional period, the CMA may assume/acquire responsibility for practices that may affect trade within the United Kingdom, the investigation of which is not completed by the end of the transitional period. The CMA may also investigate alleged infringements of uk national competition law (i.e. prohibitions in Chapters I and II of the Competition Act 1998, including UK criminal sanctions, but not infringements of EU competition law that no longer apply to the UK. . . .

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