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Envisaging the Post-Brexit Landscape: An Articulation of the Likely Changes to the EU–UK Competition Policy Relationship

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Abstract

In the light of the outcome of the 23rd June 2016 UK referendum to leave the European Union and the May government’s consequent approach to Brexit, this paper explores the likely changes that these will bring to a key EU–UK relationship, the competition policy relationship. It is suggested that changes are likely not only in public enforcement and private actions but also in the need for a new competition cooperation architecture between the EU and the UK. In order to appreciate how the competition relationship is likely to change after Brexit, an understanding of the current architecture in respect of the said areas is necessary and thus outlined early in the paper. Thereafter, it is argued that, post the implementation period, as the UK will no longer come under the direct jurisdiction of the European Court of Justice or indeed be a member of the Single European Market, a considerable loosening or separation of the strands that shape the current EU–UK competition relationship will occur. This unwinding of the currently intertwined EU and UK competition regimes will affect both public enforcement and private actions, thereby opening up the possibility of further regulatory divergence, unless consciously checked. Moreover, as the separation will see the Commission’s jurisdictional remit no longer include the UK, the domain will become the sole regulatory concern of UK institutions, particularly the Competition and Markets Authority. This will lead to dual regulatory capture, often of significant and complex antitrust and merger cases, given the overlapping nature of EU and UK markets. Clearly, this necessitates the UK regulator having the appropriate staffing to vet such cases, as it moves from essentially a regional player to one on a par with the Commission and regulators in the USA and China. In fact, the dual capture of such cases reinforces the importance of effective cooperation between the EU and UK regulators. However, given that the current competition cooperation relationship will end at the conclusion of the implementation period, the paper articulates a likely new EU–UK competition cooperation architecture, reflecting the fact that the UK would be outside the EU, but still enabling close, effective cooperation. Of course, and echoing the EU, it is also in the UK’s interest to agree similar competition cooperation bilaterals with key non-EU regulators. Yet, because this will take time, and because cooperation can indeed fail, the UK, like the EU, must ensure its competition instruments have the necessary extra-territorial reach.

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Notes

  1. May (2017a, 5. Control of immigration, p. 8).

  2. Ibid n. 1, Control of our own laws, p. 6.

  3. Ibid n. 1, p. 6.

  4. Ibid n. 1, p. 6.

  5. Article 50 of the Treaty on European Union.

  6. Competition & Markets Authority (2017, CMA 3, section 3.2).

  7. Article 101(1) Treaty on the Functioning of the European Union.

  8. Supra n. 7, Article 101(2).

  9. Supra n. 7, Article 101(3).

  10. Council Regulation (EC) no. 1/2003 OJ L 1, 4.1.2003.

  11. Article 102 Treaty on the Functioning of the European Union.

  12. Competition Act 1998, Part 1 Competition, Chapter I, 2(1).

  13. Ibid n. 12, Competition Act 1998, Part 1 Competition, Chapter II, 18(1).

  14. Ibid n. 12, Competition Act 1998, Part 1, section 60(1).

  15. Slaughter and May (2016, paragraph 1.2).

  16. Supra n. 10, Council Regulation (EC) no. 1/2003, Recital 4 and Articles 5 and 6.

  17. Commission Staff working paper (2009) {COM(2009)206 final}, section 2.2.1.

  18. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 3.

  19. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 3(2).

  20. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 3(2).

  21. Supra n. 10, Council Regulation (EC) no. 1/2003, Recital 15.

  22. See Commission Notice on cooperation within the Network of Competition Authorities, OJ C 101, 27.4.2004, p. 43.

  23. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 12.

  24. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 12(2).

  25. Case 127-73 Belgische Radio en Televisie v SV SABAM and Fonior. Reference for a preliminary ruling: Rechtbank van eerste annleg Brussel-Belguim.—BRT-I [1974] ECR-00051, paragraph 16.

  26. Case C-453/99 Courage Ltd v Crehan [2001] ECR I-6297, paragraph 26. See also: Joined cases C-295/04 to C-298/04 Manfredi and Others v Lloyd Adriatico Assicurazioni SpA and Others [2006] ECR I-06619, paragraphs 60 and 61.

  27. Directive 2014/104/EU of the European Parliament and of the Council of 26 November 2014 OJ L349, 5.12.2014, Recital 9.

  28. European Commission Staff working paper on the functions of Regulation No. 139/2004 {COM (2009) 281 final} paragraphs 51–53.

  29. Council Regulation No. 139/2004, OJ L 024, 29/01/2004, Articles 9, 22 and 4.

  30. Ibid n. 29, Council Regulation no. 139/2004, Article 19.

  31. Enterprise Act 2002, part 3, section 26(3).

  32. European Commission: White Paper Towards more effective EU merger control COM (2014) 449 final, section 3.2.3.

  33. Supra n. 31, Enterprise Act 2002.

  34. Supra n. 29, Council Regulation no. 139/2004, Article 10.

  35. Article 45 TFEU and Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004, OJ L 158, 30.4.2004, Recitals 1-3.

  36. Supra n. 1, May (2017b, p. 5).

  37. May (2016, Conference Speech, p. 5.).

  38. Ibid n. 37, p. 5.

  39. Supra n. 1, p. 15.

  40. European Council (2017, Press Release 220/17, paragraph 4).

  41. Ibid n. 40, paragraphs 8–11.

  42. Ibid n. 40, paragraph 5.

  43. Ibid n. 40, paragraph 6.

  44. Verhofstadt, Guy. (Interview published in The Guardian newspaper, 10/2/17).

  45. Hammond and Fox (2017, The Sunday Telegraph, News, p. 4).

  46. May (2017b, Florence speech, implementation section).

  47. Ibid n. 46, implementation section.

  48. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 3(2).

  49. Consumer Rights Act 2015, Schedule 8, Part 1.

  50. Ibid n. 49, Accordingly amending Schedule 8, 47A(2) and (6).

  51. In follow-on actions for damages, as the name suggests, the action follows on from a competition regulator’s infringement decision.

  52. In stand-alone actions, the claimant has to prove both the infringement and that the infringement caused them harm.

  53. Supra n. 49, Part 3, Chapter 2, section 81, paragraph 423.

  54. Supra n. 49, Part 3, Chapter 2, section 81, paragraph 424.

  55. Supra n. 49, Schedule 8, Part 1, 49C.

  56. Competition & Markets Authority (2015, CMA40, paragraph 1.29).

  57. Supra n. 29, Council Regulation no. 139/2004, Articles 1(2) and (3).

  58. Supra n. 29, Council Regulation no. 139/2004, Recital 17.

  59. Supra n. 29, Council Regulation no. 139/2004, Article 21(4).

  60. It provisionally entered into force on 21 September 2017. European Commission, Press release, 20 September 2017.

  61. Supra n. 46, May (2017b, Florence speech, Economic partnership section).

  62. The Comprehensive Economic and Trade Agreement, Chapter 17.

  63. Ibid n. 62, Chapter 17.2(2) and (4).

  64. See for example: n. 62, Chapter 17.2(3).

  65. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 12.

  66. Agreement between the European Union and the Swiss Confederation, OJ L 347, 3.12.2014, Article 7.

  67. European Commission Proposal for a Council Decision COM (2016) 421 final, Other Elements section and Article VII.

  68. See, for example: n. 66, Article 8.

  69. See, for example: n. 66, Article 7(5).

  70. See, for example: n. 66, Article 7(7).

  71. Supra n. 66, Article 8(4).

  72. Supra n. 10, Council Regulation (EC) no. 1/2003, Article 12(3).

  73. Supra n. 67, Other Elements section.

  74. See, for example: n. 66, Article 7(6).

  75. European Commission Notice on cooperation within the Network of Competition Authorities (OJ C 101, 27.4.2004, paragraph 41(2)).

  76. Office of Fair Trading (2013 OFT1495, section 7.31).

  77. See, for example: n. 66, Article 5.

  78. See, for example: n. 66, Article 5.

  79. See, for example: n. 67, Article IX.

  80. See, for example: n. 67, Article IX.

  81. See, for example: n. 67, Article IX.

  82. See, for example: n. 67, Article IX.

  83. See, for example: n. 66, Article 10(2).

  84. Agreement between the European Communities and the Government of the United States on the application of positive comity principles, OJL 173, 18.6.1998.

  85. Ibid n. 84, Article IV(1) and (2).

  86. Davison and Johnson (2015, p. 84).

  87. Joined cases 89, 104, 114,116, 117 and 125 to 129/85. A. Ahlström Osakeyhtiö and others v Commission [1988] ECR 5139, paragraph 16.

  88. Ibid n. 87, paragraph 17.

  89. Supra n. 12, Competition Act, 1998, Part 1 Competition, Chapter I, 2(3).

  90. Supra n. 29, Council Regulation no. 139/2004, Article 1.

  91. Case T-102/96, Gencor Ltd v Commission [1999] ECR II-753, paragraphs 79 and 85.

  92. Ibid n. 91, paragraph 87.

  93. Ibid n. 91, paragraph 87.

  94. Supra n. 31, Part 3, Mergers, Chapter 1, section 23(1).

  95. Supra n. 31, Part 3, Mergers, Chapter 1, section 23(2) to (4).

  96. Supra n. 86, Davison and Johnson (2015, p. 88).

  97. Supra n. 91, Case T-102/96, Gencor Ltd v Commission [1999] ECR II-753, paragraph 90.

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Davison, L.M. Envisaging the Post-Brexit Landscape: An Articulation of the Likely Changes to the EU–UK Competition Policy Relationship. Liverpool Law Rev 39, 99–121 (2018). https://doi.org/10.1007/s10991-018-9207-0

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