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As the deadline for the UK’s withdrawal from the EU approaches, and Brexit negotiations continue, it is vital for companies to address the challenges to their business. Whilst a variety of options exist, it is possible that the UK will leave the EU without a Brexit deal on 31 October 2019 (Exit Day). Companies involved in transactions that may require EU merger reviews, or companies that are involved in ongoing EU antitrust investigations, should factor the risk of a “no-deal” Brexit and how this will interplay with the UK competition regime. The UK Competition & Markets Authority (CMA) has published its own “no deal” guidance in respect of mergers, antitrust investigations, and state aid.1 In addition, the UK Government has laid The Competition (Amendment etc.,) (EU Exit) Regulations 20192 (Regulations) before Parliament. The Regulations make provision for the transition to a standalone UK competition regime after exiting the EU in a “no deal” scenario and are accompanied by an explanatory memorandum.3

We set out below the key implications for merger control and antitrust investigations, and steps to consider now when planning your current and future strategy, in the event of a no-deal Brexit.

A. Merger Investigation

1. Jurisdiction post-Brexit

1.1 The first change will be the end of the one-stop shop process before the EU authorities. From Exit Day, the European Commission (EC) will, prima facie, no longer have jurisdiction to review the UK part of any deal notified to it under the EU Merger Regulation. The only exception to this will be if the UK forms part of a larger geographic market including the EU e.g., global markets or Western European markets, in which case the EC would still be able to require information in respect of UK activities, and would be able to impose remedies which affect the UK. However, the UK authorities will likely also have jurisdiction.

1.2 Of course, many deals will still be notifiable to the EC whether alone or in parallel to UK jurisdiction. The EC will continue to have the ability to review transactions involving UK companies where the parties have sales in the EU and the EU filing thresholds are met.

1.3 Where both regimes have jurisdiction, the EC will review the effects of the deal in the remaining EU/EEA countries and the CMA will have concurrent jurisdiction to review the impact on the UK (provided that the transaction meets the UK jurisdictional thresholds i.e. the parties have a combined share of supply of 25% or more in the UK or a substantial part of it and/or the target’s UK turnover exceeds GBP 70 million).4 This means that the two authorities may have jurisdiction at the same time and consequently two separate merger filings to each authority may be necessary/advisable. The CMA anticipates that its mergers workload will double as a result, which will present a significant strain on its resources and may call into sharper focus decisions to refer certain transactions for in-depth investigation.5

1.4 UK merger filings are voluntary at the moment, though the Chairman of the CMA has proposed a mandatory UK notification regime for mergers which, post-Brexit, meet the EU merger filing thresholds. However, under the current regime, parties should not ignore the UK where a deal will materially impact the UK market (or any part of it) as the UK authority has been proactive to date. In particular:

  • The CMA has an active Mergers Intelligence Function and will continue to regularly monitor non-notified merger cases (e.g., reviewing the press and industry publications for information about UK mergers). Our CMA dealings indicate that the CMA is already asking parties to “liaise with them in the event of a no-deal Brexit.”
  • The CMA regularly follows up with parties on completed deals which may have an impact on UK markets. This typically starts with a letter requesting information about the deal. At that point the CMA may decide not to take any further action, alternatively it may call in the deal for a full review. Going forward the CMA is likely to call in those cases that would have previously been under the remit of the EC and so precluded separate UK review.
  • The CMA as a matter of course imposes initial enforcement orders in respect of completed mergers. These create a strict (and some would argue draconian) standstill obligation that prevent the parties from further integrating their businesses pending the CMA’s merger investigation. Note, the standard form of wording applies on a worldwide basis, although the scope can be amended if the CMA agree.

2. What about deals that are being negotiated now?

Deals notified to the EC and that will be approved on or before Exit Day

2.1 The one-stop shop notification system is still available for deals that have already been notified to the EC, albeit for a very limited period of time. If the EC issues a merger clearance decision on or before Exit Day then the CMA will have no jurisdiction to review that same transaction unless the decision is annulled, in full or in part, following an appeal. Where a decision is annulled, the CMA could assert jurisdiction from the date of the European Court judgment provided that the UK jurisdictional thresholds are met.

Deals notified to the EC but that will not be approved on or before Exit Day

2.2 For deals where the current EU merger filing thresholds are met and have been notified, the EU Merger Regulation will apply and the EC will review the UK aspects of the deal. If the EC does not issue a decision on or before Exit Day then, after that date, the CMA will have jurisdiction to review the impact of the merger in the UK. This means that deals that are notified to the EC and are not cleared on or before Exit Day may be subject to dual reviews by the EC and the CMA post Brexit. This is already a real issue for many deals, including deals that have not yet been formally notified but where the parties are currently engaged in pre-notification discussions with the EC.

2.3 Dual reviews by the EC and CMA could have an impact on your deal timetable, as the UK review period is longer than that of the EC (for Phase 1: 40 working days for the CMA, compared to 25 working days under EU rules; and at Phase 2: 24 weeks for the CMA, compared to 90 working days (around 18 weeks) under EU rules, (excluding extensions and stopping of the clock)).6 It is possible that the CMA may be prepared to extend the statutory timetable in complex Phase 2 merger investigations, in light of a recent judgment by the UK Competition Appeal Tribunal (CAT) relating to Sainsbury’s/Asda. The judge in that case noted that tight statutory deadlines in large and complex mergers can create difficulties for the CMA and the parties. At present, such deals are relatively rare but the problem may increase post-Brexit, when the CMA will review large international mergers that affect the UK and which currently fall within the exclusive jurisdiction of the EC. The CAT has called for an urgent review of the current UK statutory timetable to allow for greater flexibility. It remains to be seen whether such a review will take place.7

2.4 While the authorities may look to coordinate, this will need to be factored in to your deal planning and reflected in the transaction agreement. If engagement with the CMA begins later than the engagement with the EC, the delays on the overall timetable are likely to be more significant. Alternatively, there is a risk of inconsistent remedies being imposed.8 Of course, the overall review time of each authority will depend on whether the deal has a material impact on competition in the UK and/or in the EU. It is important to bear in mind that the CMA has the power to refer a merger for a Phase 2 investigation until the later of: (i) four months after completion of the merger; or (ii) four months from the date on which material facts about the merger entered the public domain. Hence, a delay in engaging with the CMA early on could have a significant impact on timing for a deal which is being reviewed in multiple jurisdictions.

2.5 There is also a question as to whether the exclusion of UK-allocated turnover post-Brexit will affect the calculation of turnover for deals already agreed prior to Exit Day and whether the EC could legitimately continue to have jurisdiction over such deals if, absent UK turnover, the EU thresholds would not be met. The EC has confirmed that jurisdiction under the EU Merger Regulation will be assessed at the date of the conclusion of the binding legal agreement or announcement of a public bid, so if that date is prior to Exit Day, then UK turnover should be included when assessing whether the EU turnover thresholds are met (and excluded if that date is after Exit Day).9

3. Steps to take now

3.1 There are a number of steps to consider given the imminent demise of the one-stop shop process in terms of the UK and EU.

3.2 First, if you are in the middle of a transaction that meets the current EU merger filing thresholds and that has not been notified to the EC in time to obtain clearance on or before Exit Day, and that raises material substantive issues in the UK, consider engaging in discussions with the CMA at the same time as having pre-notification discussions with the EC.

3.3 The CMA is actively encouraging such discussions. These should help parties to assess whether the CMA is likely to call in such a deal for UK review post Brexit and whether to make a voluntary filing to the CMA. Indeed, the CMA is now proactively contacting parties that are contemplating or in the middle of EU merger notifications and asking for information about those deals as part of its contingency planning for a no-deal Brexit. This shows that the CMA is already carefully monitoring mergers over which it may obtain jurisdiction after Exit Day.

3.4 Second, consider the following strategies in respect of ongoing deals that will sign but not receive EC clearance and complete before Exit Day:

  • Include an EU merger control condition precedent that allows the parties to approach the CMA and/or requires UK merger control clearance or confirmation from the CMA that it will not call in the transaction for a review, in the event that there is a no deal Brexit and EU clearance has not been obtained by Exit Day. Note that this may have timing implications as the CMA would start its own investigation on or after Exit Day under the UK merger control timetable.
  • Include an EU merger control condition precedent allowing the parties to request a referral of the UK aspects of the merger to the UK CMA under Article 4(4) of the EU Merger Regulation. If the referral request is granted, the CMA could then review the merger under UK rules and timetable.
  • Alternatively, consider encouraging CMA to request to review the deal under Article 9 of the EU Merger Regulation and the EC to accept this, thus avoiding the need for the parties to make a referral request and any subsequent delay.

3.5 An alternative – though perhaps less commercially acceptable strategy, particularly given it is unclear if the Article 50 deadline will be further extended – is to wait until after Exit Day to sign the deal agreement and notify to the EC, and so avoid many of the complexities described above. In this case, UK turnover would no longer be considered as part of EU turnover. If the transaction will no longer meet the EU merger filing thresholds if UK turnover is stripped out, consider the implications of making multiple notifications in EU Member States (and potential referral up to the EU), as well as a voluntary UK notification (if the UK thresholds are met).

3.6 Your transactional strategy will ultimately depend on the deal dynamics and commercial priorities of each of the parties. For example, a seller may not be minded to include a condition precedent requiring CMA approval or keen to engage with the CMA prior to closing and will point to the ability of the purchaser to take the contractual and day-to-day operational risk. However, a purchaser may prefer to include such a condition precedent or else be prepared to take the antitrust risk. In the latter case, a purchaser may wish to know as soon as possible whether the CMA is minded to investigate the transaction, not least because the CMA has started to impose penalties for what is characterises as flagrant breaches of the relevant initial enforcement orders.

3.7 The following thoughts may assist with your assessment of how to approach the CMA:

Transaction UK Strategy
Parties are not competitors and the target’s UK turnover exceeds GBP 70m. Consider whether the deal is likely to raise vertical/conglomerate concerns in the UK e.g., limiting rivals’ ability to access key inputs. Absent vertical concerns, transactions between non-competitors are less likely to be called in for review by the CMA. Consider not making a notification. Be ready for queries from the CMA’s Mergers Intelligence Committee.
Parties’ combined share of supply exceeds 25% in the UK or a substantial part of it but there is evidence that the deal is unlikely to substantially lessen competition in the UK e.g., there are strong competitors in the market; the parties are not close competitors; good evidence of competitive constraints on the parties. If legal certainty and/or completion as soon as possible are a priority, consider submitting a short briefing note (maximum five pages) to the CMA, explaining why the deal should not attract the CMA’s scrutiny. As a general rule, the CMA will only consider a briefing note after there is a signed merger agreement. If the CMA does not immediately follow up or the Mergers Intelligence Committee can be readily satisfied, proceeding with closing and integration without the CMA’s approval represents a low risk strategy.
Parties’ combined share of supply exceeds 25% in the UK or a substantial part of it and may have a material impact on the UK market e.g., 3 to 2 merger; lack of credible competitors in the market; high barriers to entry. Consider inserting a condition precedent into the deal agreement requiring either CMA clearance (pursuant to a notification) or indication from the CMA that the deal does not warrant investigation.

B. Antitrust Compliance and Investigations

1. The UK competition law regime and antitrust compliance

1.1 The second competition law area businesses need to consider is the implications of a no-deal Brexit on ongoing investigations and general antitrust compliance.

1.2 To avoid disruption in the event of a no-deal scenario and to preserve legal certainty for businesses, the UK Government will import the current body of EU law into UK law upon Brexit. Amendments will need to be made to specific legislation to ensure that the relevant laws can function properly.

1.3 In a no-deal scenario, Section 60 of the UK Competition Act 1998 will be repealed in its entirety. Section 60 currently requires that UK competition laws are to be interpreted, so far as is possible, consistently with the approach under EU competition law, including decisions of the EC. Under the Brexit competition legislation, however, Section 60 is repealed and replaced with a new Section 60A, which relates exclusively to EU Court judgments and EC decisions that pre-date Exit Day. This means that the CMA, sectoral regulators and UK courts will be obliged to ensure that there is no inconsistency with pre-Exit Day EU case law and EU decisions when interpreting UK competition law. However, the legislation allows for the UK regulators and courts to depart from this obligation in specified circumstances. These specified circumstances are broad, including where there are differences between EU and UK markets, and developments in economic activity. There will be no legislative obligation on the UK Courts and decision makers to have regard to EU judgments or decisions that post-date Exit Day. The absence of such an obligation does not meant that such jurisprudence is of no relevance – the relevant Court or authority may well choose to have regard to them and may place large weight on relevant judgments or decisions. That said, the case-law and decisions relating to the pursuit of the single market will have to be considered closely.10

1.4 Further, EU block exemptions which exempt certain anti-competitive agreements will be preserved in the UK until they expire. Currently, there are seven block exemption regulations in force, relating to vertical agreements, motor vehicles, research and development, technology transfers, specialisation, liner shipping consortia, and road, rail and inland waterway transport. Upon expiry, the UK Government will decide whether to adopt any new EU block exemptions or introduce new domestic block exemptions. It is advisable to continue to draft your commercial agreements so that they can benefit from the block exemptions. It is possible that once they have expired and over time, the UK may choose to diverge from EU practice. For example, we may see a more relaxed approach to territorial restrictions in UK distribution agreements in the future.

1.5 UK businesses will still be subject to EU competition law to the extent that their activities have an effect on trade between EU/EEA Member States. For example, a UK companies that engages in an international cartel will continue to face investigation and fines by the European Commission, if the cartel affects EU/EEA Member States. Businesses will therefore need to continue to ensure that their agreements and practices are both EU and UK competition law-compliant.

1.6 One risk to flag is the tendency for regulatory change to give rise to cartel cases. Given the current political uncertainty, businesses will likely want to engage with each other on how Brexit will impact their industry, and explore opportunities to influence the future of the legal and regulatory landscape.

Such discussions could be via trade associations, government-sponsored lobbying initiatives, and other industry fora. These activities can be valuable and advance issues of common interest to the industry. However, it is important to remember that competitor collaboration must comply with antitrust rules. There should be no discussion about or agreement on how to react commercially to new legal or regulatory developments in light of Brexit – it is acceptable to cooperate with competitors in respect of the content and scope of the a new regulation, but not on how this will impact the company’s business, and how the company will react. This must be a unilateral decision for each company. Due attention should be given to the intention behind lobbying activities – the aim can never be to restrict competition. There are a number of examples of regulatory change giving rise to cartels, such as Consumer Detergents11 and Air Cargo.12

2. Jurisdictional issues

2.1 After the UK’s exit from the EU, the CMA will no longer have jurisdiction to apply Article 101 TFEU on anti-competitive agreements (including cartels) and Article 102 TFEU on abuse of dominance. However, the CMA’s jurisdiction to apply the equivalent UK national prohibitions in the Competition Act 1998 (respectively the Chapter I prohibition and the Chapter II prohibition) will be unchanged.

2.2 Again, however, the CMA and concurrent sectoral regulators in the UK will only be able to investigate anti-competitive conduct that affects UK markets. Similarly, the EC will no longer have the ability to open investigations into cases involving anti-competitive agreements or conduct confined to the UK. However, the EC will continue to have the power under EU law to investigate UK firms if they engage in conduct or arrangements that has an effect on competition within the EU/EEA, even if that conduct took place in the UK or the agreement/arrangement was entered into in the UK by UK firms. It is therefore essential that UK businesses continue to comply with the EU competition rules.

If the EC has issued a decision in relation to Articles 101/102 TFEU on or before Exit Day

2.3 If the EC issues a formal infringement decision under EU competition law on or before Exit Day, the CMA and concurrent regulators cannot open an investigation into that same infringement after Exit Day. If the EC’s infringement decision is annulled in full or in part by the European Courts after Brexit, the CMA and concurrent regulators would be able to conduct their own investigations into breaches of UK competition law occurring before or after Exit Day.13

If the EC has opened an investigation in relation to Articles 101/102 TFEU but has not issued a decision on or before Exit Day

2.4 The CMA may conduct investigations into breaches occurring before or after Exit Day, including in cases where the CMA was relieved of its competence by the EC but where the EC did not make a decision before Exit Day. This could potentially cover both the situation where the CMA was relieved of its competence but the EC subsequently decided not to pursue the case on prioritisation grounds, or where the EC is yet to decide whether it will pursue a case. This means that participants in a cartel which could have a material impact on competition in the UK will be potentially exposed to parallel EU and UK investigations, and possibly double penalties. There may also be the risk of divergent outcomes in respect of the same conduct.

2.5 The CMA has already shown its willingness to take on cases which are within the EC’s remit: it is investigating commitments in relation to an airline alliance that were previously agreed with the EC and affect the UK, and which are due to expire after the UK leaves the EU.14

If the EC has granted a marker and/or accepted applications for leniency on or before Exit Day, but not yet formally opened an investigation

2.6 There is no “one-stop shop” principle which applies to leniency applications in the EU. Companies involved in cross-border cartels should therefore consider applying for leniency to all competition authorities that could pursue a case against them in order to benefit from full leniency protection. Therefore, after Exit Day, any existing or potential applicant for leniency under the EC’s leniency programme in respect of conduct which is also covered by the CMA’s own leniency policy should make a separate application for leniency to the CMA.

2.7 In many ways, this does not represent a change as such an application should have been considered pre-Brexit. However, we would advocate full consideration of taking the following steps:

Confirm with the CMA if your summary UK leniency application needs to be “perfected” / “supplemented” before Exit Day.

Check if the conduct you have just reported to the EC also concerns the UK market and if it does, carry out a risk-based analysis to inform your reporting strategy in the UK.

Investigations being conducted by the CMA prior to Exit Day

2.8 The CMA has stated in its no-deal guidance that where it or concurrent regulators are conducting an antitrust investigation with an EU element before Exit Day but have not issued a decision before that date, they may not continue any EU elements of the investigation on or after that date. Such ongoing investigations will be continued on the basis of UK competition law only.

C. Actions for damages

1.1 In terms of litigation, UK consumers and businesses will continue to be able to pursue private follow-on damages claims based on CMA infringement decisions under UK competition law. UK courts will not be bound by EU rulings issued after Exit Day but may have regard to them and likely will find them to have high probative value in determining civil claims. Hence, if the EC issues an infringement decision after Exit Day, claimants wishing to pursue follow-on private damages claims in the UK courts will no longer be able to rely on that decision as a binding finding of an infringement of UK competition law.

1.2 The new Section 60A of the Competition Act also provides UK courts with certain principles it may consider in determining such cases after Exit Day. Notably, the court or tribunal must act with a view to securing that there is no inconsistency between the principles laid down by the Treaty on the Functioning of the European Union and the European Court before Exit Day, and any relevant decision made by that Court before Exit Day. This means that we can draw some guidance from case law established to date on key issues arising in civil litigation

– such as applicable law, limitation, quantification etc.

rather than having to determine them afresh with all the additional cost and uncertainty that such a lack of precedent might bring.

D. State Aid

1.1 The UK Government laid a state aid Statutory Instrument (SI) before Parliament on 21 January 2019, to ensure a domestic state aid regime will be in place by Exit Day in the event of a no-deal Brexit.15 This SI transposes the EU state aid regime into domestic law and gives the CMA the function of being the UK state aid enforcement authority, in place of the European Commission, from the date on which the UK leaves the EU. The SI does not materially alter the substance of the EU state aid framework.

1.2 The role of state aid enforcer will be a brand new function for the CMA. The CMA has stated that it is currently considering the design of its decision-making structures and processes, with a view to maximising the robustness, independence and impartiality of its decision-making.

1.3 There are a number of implications of this change.

State aid approved or exempted by the European Commission on or before Exit Day

1.4 State aid approved by the European Commission in advance of Brexit will not need to be approved again by the CMA. The same is the case for aid given prior to Brexit under a state aid block exemption. The CMA will have powers to act in cases where aid granted prior to Brexit that has been approved or was exempted from approval is misused.

State aid not approved by the European Commission before Exit Day

1.5 In the event of a no-deal Brexit, state aid which has been notified to the European Commission, and on which the European Commission has not made a decision on or before Exit Day, will need to be re-notified to the CMA.16 The CMA will have powers to investigate cases where aid has been granted without prior approval and where no block exemption applies (whether before or after Brexit day).

1 See Guidance: Merger cases if there’s no Brexit dealGuidance: Antitrust enforcement if there’s no Brexit deal, EU_Exit_Guidance_Document_for_No_Deal_final.pdf andGuidance: The CMA’s state aid role if there’s no Brexit deal
2 2019 No. 93 Exiting the European Union CompetitionThe Competition (Amendment etc.) (EU Exit) (No. 2) Regulations 2019
3 Explanatory Memorandum to the Competition (Amendment, Etc.) (EU Exit) Regulations 2019
4 Note that lower thresholds apply for certain national security mergers.
5 In 2018/19 (to 31 March 2019) the CMA formally reviewed 67 mergers. Many others, of course, were considered by its Merger Intelligence Function but were not subject to an investigation. A number were referred for in-depth investigation but cleared without remedies being required.
6 Of course, the purchase agreement may provide that completion will occur notwithstanding the ongoing UK investigation. In our view, in such a case an initial enforcement order will be automatically imposed by the CMA.
7 (1) J Sainsbury PLC (2) Asda Group Limited v The Competition & Markets Authority [2019] CAT 1. It is not clear if the CMA will be of the same view as it may anticipate resourcing issues if, for example, there are multiple Phase 2 merger investigations lasting materially longer than 6 months.
8 That said, the CMA may well feel constrained by the EC approach, particularly if the market is wider than the UK.
9 Withdrawal of the United Kingdom and EU Competition Law.
10 The Swiss authorities regard restrictions on imports into Switzerland as raising material issues under Swiss competition law. It is not clear if the UK courts and/or the CMA would take the same approach.
11 COMP/39579 – Consumer Detergents.
12 CASE AT.39258 – Airfreight.
13  Guidance: Antitrust enforcement if there’s no Brexit deal  and /EU_Exit_Guidance_Document_for_No_Deal_final.pdf
14 Investigation of the Atlantic Joint Business Agreement.
15 Exiting the European Union Competition.
16 This will also apply where a European Commission decision to approve state aid has been annulled by the EU courts and the European Commission has not made a new decision in respect of that aid on or before Exit Day. This is likely to apply, for example, with respect to the state aid for the UK electricity capacity market. The European Commission’s 2014 decision (SA.35980) to approve this aid was annulled by the European General Court on 15 November 2018. Whilst the European Commission has launched a new investigation into the capacity market, it appears unlikely that the European Commission will reach a decision to approve the aid before Exit Day.



Samantha Mobley is a partner in the Competition, Trade & Foreign Investment Practice of Baker & McKenzie's London office and a member of the London office Management Committee. She headed Baker McKenzie's Global Antitrust and Competition Group, a team of over 300 competition and antitrust specialists worldwide for six years. Samantha is a member of Baker McKenzie's India Steering Committee.


Keith Jones is a partner at Baker & McKenzie´s London office. He has extensive experience in UK and EU competition law. He is a member of Baker & McKenzie’s Competition team and Competition Litigation Unit in the London office. Keith has published a number of articles on competition litigation and is co-author of the Competition Litigation, Europe.