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Changes to current Competition and Markets Authority enforcement cases in the event of a no-deal Brexit
Under the The Competition (Amendment etc.) (EU Exit) Regulations 2019 (the Competition SI), after Brexit, the Competition and Markets Authority (CMA) will no longer have jurisdiction to apply Article 101 of the Treaty on the Functioning of the European Union (TFEU) on anti-competitive agreements (including cartels) and Article 102 TFEU on abuse of dominance.
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.
Section 60 of the Competition Act 1998 requires the CMA, sector regulators and the UK courts to 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.
Under the Competition SI, section 60 of the Competition Act 1998 will no longer apply, including to cases already opened on or before Brexit.
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-Brexit EU competition case law when interpreting UK competition law.
Section 60A also allows competition regulators and UK courts to depart from pre-Brexit EU case law where it is considered appropriate in the light of particular circumstances.
Antitrust enforcement where the European Commission has opened an investigation in relation to Article 101 or 102 TFEU but not published a decision before Brexit
The Competition SI prevents the CMA from opening investigations into infringements of UK competition law after Brexit where, before Brexit, the European Commission relieved the CMA of competence and has reached an infringement decision (and which was not subsequently annulled).
When the UK leaves the EU, 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 Brexit.
In deciding whether or not to open a case, the CMA will have regard to its prioritisation principles taking into account the circumstances of Brexit.
Block exemption regulations
7 EU block exemption regulations will be retained in UK law and amended to correct deficiencies resulting from the UK no longer being a Member State of the EU.
The current expiry dates will be preserved.
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 plans 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 Brexit, 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.
After Brexit, 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-Brexit).
There is no “one-stop shop” principle which applies to leniency applications in the EU.
Companies involved in cross-border cartels should apply for leniency to all competition authorities that could pursue a case against them in order to benefit from full leniency protection.
Read more about how to apply to the CMA’s leniency programme
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