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Changes to current CMA enforcement cases in the event of a ‘no deal’ exit
Under the Competition SI, after the UK’s exit from the EU, the CMA will no longer have jurisdiction to apply Article 101 TFEU on anti-competitive agreements (including cartels) and Article 102 TFEU on abuse of dominance. However, the CMA’s jurisdiction to apply the equivalent UK national prohibitions in the Competition Act 1998 (respectively the Chapter I prohibition and the Chapter II prohibition) will be unchanged. The CMA will inform all affected parties if the scope of an investigation involving them is affected by this.
Under the Competition SI, section 60 of the Competition Act 1998, under which the CMA, sector regulators and the UK courts must interpret the UK competition prohibitions in a way that is consistent with the decisions and principles laid down by the Court of Justice of the European Union, will no longer apply including to cases already opened on or before 29 March 2019. Instead a new provision, section 60A, will apply to such cases.
Section 60A provides that competition regulators and UK courts continue to be bound by an obligation to ensure no inconsistency with the pre-exit EU competition case law when interpreting UK competition law, but that they may also depart from such pre-exit EU case law where it is considered appropriate in the light of particular circumstances.
CMA role where the European Commission has opened an investigation in relation to Article 101 or 102 TFEU but not published a decision before the UK exits the EU
The Competition SI prevents the CMA from opening investigations into infringements of UK competition law after exit where, before exit, the European Commission relieved the CMA of competence and has reached an infringement decision (and which was not subsequently annulled). On exit, the CMA may conduct investigations into breaches of the domestic prohibitions occurring before or after exit day, including in cases where the CMA was relieved of its competence by the European Commission but where the European Commission did not make a decision before exit.
In deciding whether or not to open such a case, the CMA will have regard to its prioritisation principles taking into account the circumstances of the UK’s exit from the EU.
Block exemption regulations
7 EU block exemption regulations will be retained in UK law and amended to correct deficiencies resulting from the UK ceasing to be a Member State of the EU. The current expiry dates will be preserved. In practice this means that agreements that met the criteria of these EU block exemption regulations remain exempt from the UK competition prohibitions.
The relevant block exemption regulations are:
- liner shipping regulation expiring on 30 April 2020
- transport regulation
- vertical agreements regulation expiring on 31 May 2022
- motor vehicle distribution regulation expiring on 31 May 2023
- research and development regulation expiring on 31 December 2022
- specialisation agreement regulation expiring on 31 December 2022
- technology transfer regulation for example, intellectual property licences, expiring on 30 April 2026
The Competition SI transfers the power to amend or revoke these to the Secretary of State, acting in consultation with the CMA. The CMA expects to consult on the block exemptions as they expire in order to provide advice to the Secretary of State.
CMA role where the European Commission has granted a marker and/or accepted applications for leniency in accordance with its leniency policy before the UK exits the EU, but not yet formally opened an investigation.
The CMA operates a leniency programme which covers cartel activity prohibited under the Chapter I prohibition and which also covers cartel behaviour prohibited by the criminal cartel offence under the Enterprise Act 2002. This programme operates independently of the European Commission’s own leniency programme.
There is no “one-stop shop” principle which applies to leniency applications in the EU. Companies involved in cross-border cartels should therefore apply for leniency to all competition authorities that could pursue a case against them in order to benefit from full leniency protection. Therefore, after the UK’s exit from the EU, any existing or potential applicant for leniency under the European Commission’s leniency programme in respect of conduct which is also covered by the CMA’s leniency policy should make a separate application for leniency to the CMA (as would have been the case pre-exit).
Details of the CMA’s leniency programme and instructions for businesses or individuals who are considering making an application for leniency.