Committees

Opportunity for a more effective competition regime post-Brexit

2 February 2018

The EU Internal Market Sub-Committee publishes its report on the implications of Brexit for competition matters encompassing: anticompetitive conduct or agreements (antitrust), merger control, and State aid.

Background

Since the UK joined the EU, the UK and the EU institutions have shared responsibility for competition matters, so Brexit is likely to have a significant impact on the UK's domestic competition regime. This report examines the short-term legal and regulatory implications of Brexit, questions of jurisdiction that will need to be resolved in any transition or 'implementation period', and, potential opportunities for the UK to develop a more effective and inclusive domestic competition framework.

Key Findings

Antitrust and merger control

  • While there should continue to be consistency between the UK and EU's approach to competition matters, the UK will be free to take a more innovative and responsive approach to tackling global competition enforcement challenges, such as fast-moving digital markets and dominant online platforms.
  • It will be in the interests of UK and EU competition authorities to continue to cooperate post-Brexit. A formal cooperation agreement should be negotiated covering investigations and enforcement actions.

State aid

  • After Brexit, a UK-wide domestic State aid framework will be needed in order to meet WTO obligations and avoid intra-UK subsidy races. It will be essential for the Government to involve and secure the support of the devolved administrations in developing this framework.

Transition

  •  Transitional arrangements will be necessary to clarify jurisdiction in cases which are ‘live' at the point of Brexit, as well as future cases relating to conduct which occurred while the UK was still a member of the EU. The terms of the transition period should be agreed in the first quarter of 2018 to ensure that businesses are not faced with the complexity and cost of adapting to Brexit twice.

Future policy

  • In developing the UK's future competition regime, there is an opportunity to design a more inclusive system that better reflects domestic needs and priorities. The Government should launch a consultative process - involving all relevant stakeholders - to inform its decisions in this regard, and any related legislation.

Chairman's Comments

Chairman of the EU Internal Market Sub-Committee, Lord Whitty, said:

"While our witnesses favoured ongoing consistency between the UK and EU's approach to competition matters, we were encouraged that they also saw opportunities for the UK to improve our competition regime after Brexit."

"The Government needs to provide clarity on what the transition period will look like, and on their longer-term policy for competition matters - particularly in relation to State aid. To develop this policy, the Government will need to consult with the devolved administrations and local government, as well as businesses and consumer groups."

Further Information

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