The end of the post-Brexit transition period; implications for competition law and business

The transition period started after the Brexit ended on 1 January 2021. This means that the United Kingdom has officially lost its status as EU Member State. This has implications for competition law and business.

What has changed since 1 January 2021?

Firstly, the Competition and Markets Authority (CMA) is no longer competent to enforce EU competition law and investigate possible breaches in the United Kingdom. However, EU competition law continues to apply to British companies if their actions have consequences for the EU internal market. This means that British companies will still need to comply with EU rules. This works both ways. European companies active in the United Kingdom will need to ensure compliance not only with the European rules but also with British competition law.

What are the practical implications?

In November 2020, the CMA published guidelines regarding its functioning post-Brexit. This document provides some clarity about the situation after 1 January. It clarifies that the European Commission will keep exclusive competence as concerns cases that have been initiated during the transition period. This means that the CMA cannot investigate these cases but shall continue to support the Commission’s investigations. As concerns new matters it is possible for both the CMA and the European Commission to launch investigations. However, it is important to note that the European Commission can no longer carry out ‘dawn raids’ in the United Kingdom.

For businesses it is important to know that transactions which are subject to investigation by the European Commission may also need to be notified to the CMA. Furthermore, leniency applications submitted to the European Commission can no longer include activities in the United Kingdom. A separate leniency application will be required for such activities. For the time being, British competition law has not undergone any substantive changes. For example, the majority of the block exemptions of EU competition law will be preserved in British competition law. The general legal principles as set out in the TFEU and elaborated by the European Court of Justice and by the British courts and supervisory authorities will also remain relevant. Most of the existing guidelines of the CMA will also still be applicable. 

What comes next?

Whether British competition law will be amended and deviate from EU competition law in the future, is difficult to predict. It is, however, a possibility of which European companies active in the United Kingdom should be aware.