A recent report by UK in a Changing Europe highlights a range of areas where UK law is already diverging from EU law. One of these areas is competition policy.
The Divergence Tracker report flags that neither the UK or EU has any incentive to weaken its competition regime (as this would harm consumers) and both are required under the TCA to maintain and enforce competition rules. However, the TCA does not prescribe how those rules should be designed or applied.
Three significant areas of growing difference are identified:
- digital markets;
- information exchanges between competitors relating to sustainability; and
- national security/public interest grounds for blocking mergers.
Arguably the UK's work on digital markets is not a significant divergence from the EU approach, even putting the CMA's Digital Markets Unit on a statutory footing 'as soon as Parliamentary time allows' only potentially creates something a bit like the other concurrent competition regulators which we already have in the UK in relation to energy, water, aviation, financial services, etc. (although of course the exact shape of it remains to be seen).
To date, the CMA's approach to environmental sustainability agreements has seemed to focus on the concern that competitors may be seeking to 'greenwash' anti-competitive practices rather than really pushing an environmental or green economy agenda. While making substantial noises about its 'Green Deal', the approach of the European Commission (e.g. Executive Vice-President Vestager’s keynote speech at the 25th IBA Competition Conference) seems very similar. This may change in the future, but a real divergence based on notably different environmental policy agendas is yet to emerge.
Perhaps the most significant area of immediate difference is that of national security. The UK's National Security and Investment Act 2021 introduces significant additional regulatory burdens for those investing in UK companies where there may be national security issues, and in particular companies operating in any of the 17 sectors where mandatory pre-notification is required. These cover not just the traditional defence, nuclear and 'dual use' type products, but also sectors such as communications, computing hardware, energy and transport. While similar legislation is a growing trend across EU Member States the distinctive features of the UK regime mean at the very least a substantial additional administrative burden on investors, against the background threat that transactions may be void and significant fines if the regime is not complied with.
All of these three areas have recently been generating significant interest and activity. It is very interesting to see them highlighted in this report.
If you have any questions related to any of these issues or other points of competition law, do contact Noel Beale or your usual Burges Salmon contact and we will be very happy to discuss these with you.
"The most significant immediate effect of divergence is the administrative cost of compliance for businesses operating in the UK and EU. They must now navigate two regulatory regimes rather than one, and these costs will rise as regulation diverges further."