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Further to our previous
Brexit commentary, the European Commission's
(EC) Director-General for Competition has recently
published a guidance note, Notice to Stakeholders –
Withdrawal of the United Kingdom and EU Competition
Law (see link), on the application and enforcement of
EU competition law in a no-deal Brexit scenario where the UK
becomes a 'third country' as regards the application
of EU competition law rules (the
"Notice"). The Notice sets out
some of the main implications for a 'no deal' scenario
which are summarised below:
EU Antitrust Enforcement
The Notice confirms that UK companies will remain subject to EU
competition law rules in a no-deal Brexit scenario where their
conduct is implemented or produces effects in the EU, pursuant to a
well-established principle which applies for example to non-EU
producers who sell directly to EU purchasers and thus engage in
price competition in the EU .
The Notice confirms that while in a no-deal Brexit scenario it
will no longer able to carry out inspections
("dawn-raids") in the UK it will still be able to
issue information requests . While in practice the EC does
issue information requests to non-EU undertakings/third countries
and where applicable may require EU subsidiary undertakings to
provide information held by a non-EU parent undertaking (under the
EU competition law 'single economic entity' doctrine), it
is yet to be tested before the European Courts the extent to which
the EC can enforce against a non-EU company in respect of
non-compliance with an information request.
EU Merger Control
The Notice confirms that the EU Merger Regulation
(EUMR) will still be applicable to UK companies in
a no-deal Brexit scenario, regardless of country of incorporation
or where the headquarters of a company are located, where the EUMR
jurisdictional criteria (i.e. turnover thresholds) are met.
The EC has offered the following important guidance on points of
detail regarding the application of EUMR which will be relevant in
the event of a no-deal Brexit:
Companies will no longer enjoy the
'one-stop-shop' principle with respect to transactions that
satisfy the jurisdictional thresholds for the EU and the UK and two
notifications will be required
The date of a binding agreement,
acquisition of a controlling interest, or announcement of a public
bid will still be the relevant date for establishing EU
jurisdiction over a transaction, however if the relevant date is
after the date of the UK's withdrawal the EC will no longer
include UK turnover in establishing the relevant EU-wide turnover
thresholds/ turnover realised in an individual Member State
Following the UK's withdrawal,
the fact that a transaction is notifiable in the UK will no longer
be relevant for (i) pre-notification referrals under Article 4(5)
applications or (ii) post–notification referrals to the EC
under Article 22
The EC will no longer take into
account the UK national market in assessing if a transaction will
impede effective competition in the internal market but where a
transaction concerns trade between the EU and UK, the EC will may
have to consider tariffs when assessing the viability of remedies
on a case-by case basis
Interestingly, the EC has signalled
that in certain circumstances parties can request the EC to
"waive, modify or substitute" certain commitments for
example where the commitment addressed competition issues in UK
markets only
In terms of EUMR enforcement, like
for general competition law enforcement, the EC will no longer
conduct inspections in the UK but the EC will still be able
to issue requests for information
European Commission Director-General
for Competition, Notice to Stakeholders – Withdrawal of the
United Kingdom and EU Competition Law (25 March 2019)
https://ec.europa.eu/info/sites/info/files/eu-competition-law_en.pdf
A third country is a country not
member of the EU
Cases 89/85 Ahlstrom Osakeytio v
Commission ('Wood Pulp I') [1988] 4 CMLR; COMP/3981 Candle
Waxes (1 October 2008)
Regulation No 1/2003, Article 20
Regulation No 1/2003, Article 20
EUMR, Articles 1 and 3
EUMR, Article 13
EUMR, Article 11
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On November 1, 2019 a new college of European commissioners is due to take office. Practitioners are eager to know who will be in charge of competition.
The central issue—price discrimination—is notoriously contentious in view of scarce case law and strong (opposing) views among scholars and economists.
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