Envisaging the Post-Brexit Landscape: An Articulation of the Likely Changes to the EU–UK Competition Policy Relationship

Abstract

In the light of the outcome of the 23rd June 2016 UK referendum to leave the European Union and the May government’s consequent approach to Brexit, this paper explores the likely changes that these will bring to a key EU–UK relationship, the competition policy relationship. It is suggested that changes are likely not only in public enforcement and private actions but also in the need for a new competition cooperation architecture between the EU and the UK. In order to appreciate how the competition relationship is likely to change after Brexit, an understanding of the current architecture in respect of the said areas is necessary and thus outlined early in the paper. Thereafter, it is argued that, post the implementation period, as the UK will no longer come under the direct jurisdiction of the European Court of Justice or indeed be a member of the Single European Market, a considerable loosening or separation of the strands that shape the current EU–UK competition relationship will occur. This unwinding of the currently intertwined EU and UK competition regimes will affect both public enforcement and private actions, thereby opening up the possibility of further regulatory divergence, unless consciously checked. Moreover, as the separation will see the Commission’s jurisdictional remit no longer include the UK, the domain will become the sole regulatory concern of UK institutions, particularly the Competition and Markets Authority. This will lead to dual regulatory capture, often of significant and complex antitrust and merger cases, given the overlapping nature of EU and UK markets. Clearly, this necessitates the UK regulator having the appropriate staffing to vet such cases, as it moves from essentially a regional player to one on a par with the Commission and regulators in the USA and China. In fact, the dual capture of such cases reinforces the importance of effective cooperation between the EU and UK regulators. However, given that the current competition cooperation relationship will end at the conclusion of the implementation period, the paper articulates a likely new EU–UK competition cooperation architecture, reflecting the fact that the UK would be outside the EU, but still enabling close, effective cooperation. Of course, and echoing the EU, it is also in the UK’s interest to agree similar competition cooperation bilaterals with key non-EU regulators. Yet, because this will take time, and because cooperation can indeed fail, the UK, like the EU, must ensure its competition instruments have the necessary extra-territorial reach.