Transcript
IAN GILES | Richard, great to see you again. We're going to talk today, I'm afraid, about the "B" word, Brexit. This has been on everybody's minds for three years now, or longer in some cases. But in the competition world, we've got of course, like everyone else, a lot of uncertainty. A real focus of that uncertainty at the moment is around transactions, and so how merger control is going to work, both for deals which are on the cusp and might be in process when the transition to Brexit takes place, but also for those in the future that might be looking at dealing with both the UK and an EU regime in parallel. Do you want to tell me a little bit about how you see that working in the future? |
RICHARD WHISH QC | There is a fairly major difference here, in the sense
that, of course, at the moment one has the one-stop shop, so that
if a transaction has an EU dimension then you notify it in
Brussels, which has the consequence that you don't also notify
it in the UK. After Brexit, that rule falls away and so there will
be cases that have to be filed both at EU and at UK level. Funnily
enough I think it will mean some transactions will also have to be
filed in Ireland because once you have taken out turnover of
certain undertakings probably that will bring one below the EU
threshold so that might trigger a UK and also an
Irish… |
IAN GILES |
So, you would have a, kind of, net decrease in EU filings
but an increase in UK and Ireland and possibly other Member
States… |
RICHARD WHISH QC |
Because so many of those businesses are
Anglo-Irish. |
IAN GILES |
Yes. |
RICHARD WHISH QC |
Many of your clients will be perfectly accustomed to
multiple filings so in itself there's nothing so odd about that
but the CMA's estimate, I think, is that probably about 30 to
50 more cases will be notified to it than historically. What I
think is interesting is that if you think of some of the big cases
in recent years that have been prohibited, Siemens/Alstom, Deutsche
Börse/London Stock Exchange, I assume, well I'm certain,
they would have had to have been notified in the UK and there would
have been very significant competition issues in the UK. So
that's major new work for the CMA to do and, of course, then
one of the questions will be what are the cooperation mechanisms in
place between the CMA and DG Comp for exchanging information,
discussing remedies and so on. |
IAN GILES |
A big issue, we saw this in Lord Tyrie's letter, is
how these regimes would work in parallel procedurally. So obviously
we have a voluntary regime in the UK versus mandatory at EU level.
We have a much longer overall timeline in the UK potentially, which
makes it difficult to align on things like remedy decisions. Do you
think that the UK is going to have to move closer to the EU
model? |
RICHARD WHISH QC |
Well I wouldn't say "have to" move. I mean,
different merger systems around the world do have different
timetables and so on and so forth, but I can see that there might
be a head of steam for further convergence as the years go on.
Perhaps particularly with the really big cases. But we will
see. |
IAN GILES |
Because there's always the desire to be at the table
when the key decisions are being made which you already see between
the US and… |
RICHARD WHISH QC | Clearly so… |
IAN GILES |
So moving on from mergers where there's obviously a
lot that's going to change, we also have competition
investigations, cartels and dominance cases, and the UK is suddenly
going to have jurisdiction there over a whole realm of cases which
previously had been dealt with in Brussels. |
RICHARD WHISH QC |
Well, to me this is the really interesting area because,
if you think about it, over the years the really big cartel cases,
frankly, are done by the Commission. And there have been plenty of
cartel decisions over recent years where major UK PLCs have been
found liable for having infringed and this is a whole range of
sectors, whether it's financial services, and LIBOR and FOREX,
it can be freight forwarding, air cargo, haberdashery, zinc
phosphate, car glass, you know, these are all cases where PLCs were
found guilty and in the future, of course, the Commission might
still investigate those cases or they might be cases more naturally
for the UK or there might be parallel investigations. So I think
that's a very interesting area to watch out for in the
future. |
IAN GILES |
Yes, I mean a real potential increase in double jeopardy
for companies that have got a European operation. |
RICHARD WHISH QC |
One might add, of course, will the CMA, depending on
resources and so on and self-confidence, would it have any appetite
for taking on a Google, Facebook, Amazon, type case because
naturally they have been for DG Comp in the past, but that's
not to say that the CMA might not want to look at some of them in
the future. |
IAN GILES |
There's a competition SI published just in September
– a statutory instrument which is designed to allow the CMA
to enforce commitments coming out of the EU's previous
decisions. I mean that, I guess, is an important step just to make
sure that those decisions have effect. |
RICHARD WHISH QC | Yes, I've got it here, so this is SI 2019/1245. It is important, I mean you need this, but I think in essence it's pretty simple – and it is that undertakings that have given commitments to the Commission, either under Article 9 of Regulation 1 in an antitrust case or under the Merger Regulation in merger cases, commitments have been given to the Commission, in the future those will be taken over by the CMA insofar as they have impacts in the UK, and this is to enforce but also to waive, revise, etc. So, you need that as part of the machinery. I don't think there's anything particularly complicated about it. |
IAN GILES | But then going to the point we were just on, which I
think is the really interesting one – competition policy in
the new world. The UK has always had a prominent role at the, kind
of, global antitrust table and I'm sure will be keen to
maintain that, which I think probably does point to them trying to
take on and be involved in the next generation of big platform
cases. |
RICHARD WHISH QC |
The first thing I would say on that is that the OFT
historically, then the CMA, and CC historically, are highly
respected in the international community and have always been
fairly high profile in the ICN, ECN and OECD. Obviously we
won't be in the ECN but we will certainly participate in the
ICN, OECD and various other international fora so that will be
important going forward. What I think is interesting here is
actually not what effect will Brexit have on our competition
policy, because I think that will be fairly minimal, in the short
to medium term, what is more interesting is, as it were, the Tyrie
proposals, which were tabled earlier this year in combination with
BEIS’s quinquennial review of the regime which is required by
the ERRA 2013. Now, as you know, there's lots of interesting
stuff there. It's not Brexit stuff, it's about what system
do we want going forward, and I think there's a lot to confront
there and a lot of interesting issues. |
IAN GILES |
But it will be interesting to see, I guess, to what
extent, if the UK starts embracing some more of these, let's
say consumer focused or, kind of, regulatory approaches that the
Tyrie paper talks about, whether that drives change in Europe in
the same direction or whether you start to get more of a
divergence. |
RICHARD WHISH QC |
Whatever happens in any part of the world, competition
authorities are linked to one another through the ICN. It's a
superb organisation and the cross-fertilisation of ideas that
happens there is absolutely clear to see. And this business of the
convergence of consumer and competition law, it's been an issue
for many years and it's going to continue to be an issue for
many years yet to come. |
IAN GILES |
Well, thank you very much Richard, that's been really
interesting. |
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