Brexit’s Legal Aftermath: Redefining Competition Law and Antitrust

Written in conjunction with - Beytullah Aykanat: LLB Law, Humboldt University Berlin

A. Brexit’s Legal Aftermath: Redefining Competition Law and Antitrust

Brexit was finalised on January 31, 2020, marking the United Kingdom's (UK) departure from the European Union (EU). One of its central goals was the restoration of national sovereignty, particularly in economic matters. The introduction of the Trade and Cooperation Agreement (TCA) between the EU and the UK aimed to establish clear regulations for future relations. However, the TCA brought significant economic disadvantages, especially in the field of antitrust and competition law.

I. Competition Law and Antitrust: Pre-Brexit

1. Uniformity at the EU Level

Firstly, before Brexit, the UK was part of the European Competition Network (ECN), which not only ensured uniform substantive rules in competition law but also included all national competition authorities. As a result, overlapping jurisdictions of national authorities and the EU Commission were largely eliminated through coordinated procedures. Consequently, this approach prevented jurisdictional conflicts while also enabling the seamless enforcement of competition law.

2. Efficient Merger Control Through the "One-Stop-Shop"

Secondly, companies were required to notify mergers exceeding certain revenue thresholds only to the EU Commission. National competition authorities within the European Economic Area (EEA) were not responsible, which in turn made procedures more efficient and significantly faster.

3. Private Enforcement of Antitrust Law

Thirdly, the Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters (Brussels I Regulation) greatly facilitated the private enforcement of antitrust law. By clearly regulating jurisdiction, recognition, and enforcement of decisions, it significantly simplified cross-border proceedings.

II. Competition Law and Antitrust: Post-Brexit

1. Lack of Uniformity in Antitrust

After Brexit, jurisdiction for antitrust law in the UK now solely rests with the British Competition and Markets Authority (CMA). This means that companies must now comply with both UK and EU regulations, which inevitably leads to parallel proceedings and heightened legal uncertainty.

2. Loss of the One-Stop-Shop in Merger Control

In addition, companies are now required to notify mergers to the CMA. This change has resulted in more complex procedures and significantly higher costs, particularly for legal advice. Moreover, the duplication of jurisdictions places a substantial burden on M&A transactions.

3. End of the Brussels I Regulation

Furthermore, the removal of the Brussels I Regulation has left a gap in addressing the practical needs of cross-border legal transactions. EU judgments can no longer be enforced in the UK without additional complications. Consequently, claimants seeking damages must independently prove antitrust violations and can no longer rely on EU Commission decisions.

III. Current Status: Development of the Competition Cooperation Agreement (CCA)

Since October 2024, negotiations on the Competition Cooperation Agreement (CCA) have been concluded. This agreement specifically aims to facilitate collaboration between the CMA, the EU Commission, and national competition authorities. The CCA is intended to prevent conflicts between jurisdictions and improve the coordination of parallel investigations. However, it remains unclear to what extent the exchange of information and evidence will be effectively implemented.

B. Conclusion

In conclusion, Brexit has had profound effects on competition and antitrust law. The fragmentation of enforcement has led to increased uncertainties, higher costs, and greater administrative burdens for companies. Nevertheless, the CCA represents an important step towards harmonising cross-border investigations and providing a degree of legal certainty. That said, it remains to be seen how effectively the exchange of sensitive information can be implemented. Until then, companies will continue to face the challenges posed by Brexit in competition law.

References and Further-Reading

1. “Antitrust Advisory: EU and UK Strike Deal on Cooperation in Competition Investigations” (Alston&Bird, Jens-Olrik Murach, James Ashe Taylor and Lydia Rachianioti, 01.12.2024)

2. “Der Brexit und das Kartellrecht – Abschied von One stop shop und European Competition Network“ (Gleiss Lutz, Ulrich Soltész and Christina Wolf, 06.11.2020)

3. “Brexit- und Wettbewerbsrecht: Ein Schritt zurück“ (Fide, Antonio Martínez, 08.02.2021)