EU and UK competition law prohibits two forms of behaviour:
- Anti-competitive agreements.
- Abuse of a dominant position.
In the EU, these prohibitions are laid out in Article 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). In the UK, these prohibitions are mirrored in Chapters I-II of the Competition Act 1998.
Currently, both the UK Competition and Markets Authority (the CMA) and the European Commission (the Commission; the EU competition enforcer) have the power to investigate potential breaches of Articles 101-102, and the CMA also has the power to investigate breaches of Chapters I-II. However, the practical exercise of those powers is normally delineated by geography and agreement between the authorities.
The Commission carries out the investigation and enforcement of competition law where the breach affects trade between EU Member States (including the UK). The CMA typically investigates those breaches of EU and UK competition law which affect competition primarily in the UK. The CMA is also required to ensure the decisions it takes are aligned with Commission decisions and EU case law.
Under the Competition Regulations, Articles 101 and 102 TFEU will no longer apply in the UK, but Chapters I-II will continue to apply. This will mean that anticompetitive behaviour across EU Member States and the UK may potentially be subject to parallel investigation by the CMA and the Commission. This means companies defending themselves in investigations will need to consider the interplay between the two in their overall defence strategy - for instance, in the timing of leniency applications.
The CMA cannot open an investigation into conduct prior to exit day that was already being investigated by the Commission prior to exit day. Additionally, if the CMA is conducting its own investigation before the day of exit and the investigation contains an EU element, it will need to stop looking at EU elements of the investigation, which suggests that the Commission would be entitled to look at these elements instead. It is not clear if the Commission would immediately seek to take jurisdiction over these cases.
The CMA considers that it is entitled to a new investigation into conduct already investigated by the Commission, where the Commission’s decision is annulled by the European Court of Justice (CJEU) on or after exit day. This means that companies subject to the annulled Commission decision - who might naturally think themselves free of investigation - would then be faced with the possibility of a new investigation by the CMA for that same behaviour.
Precedents of decision marking
Post-Brexit, the CMA will be allowed to make its decisions without needing to follow precedents set by the Commission or EU case-law. However, the CMA and UK courts will still need to align their decisions to cases coming from the CJEU that were decided pre-exit, as set out in the prospective S.60A(2) of the Competition Act 1998 (as added by the Competition Regulations).
The prospective S.60A(7) notes that the CMA will be able to depart from this principle in a wide range of circumstances e.g. if there are differences between markets in the United Kingdom and markets in the European Union that require a divergence. We would expect divergence between CMA and Commission decisions to grow as time passes and as the CMA gets to grips with its new powers.
Withdrawal agreement: status during the transition period
EU law will continue to apply to the UK for the duration of the transition period and the Commission will still be able to investigate breaches of EU competition law which involve the UK. The CMA will continue to investigate under both UK and EU competition law (Articles 101 and 102 TFEU and the Chapter I and II Prohibitions).
The CMA will need to interpret UK competition law consistently with EU law during this time. CJEU judgments made before the end of the transition period will continue to be binding in the UK.
Where the Commission has opened - but not concluded - an investigation before the end of the transition period, it will be allowed to continue the case to conclusion and the CMA will not be able to open its own inquiry into the same behaviour, even where the behaviour affects the UK market.