Overview
This past year saw a range of competition law developments at EU and UK level in enforcement, state aids, block exemptions. Many of these trends will continue through 2023 and we will see the UK's competition law regime continue to move further away from that of the EU. The Brexit analogy we used last year was of two boats moored together on a lake and which, when unmoored, gradually drift apart, even without any specific driving force. This year, there are a number of initiatives which we can see will move the UK firmly away from its close alignment with the EU.
- Enforcement
The UK has always had its own free-standing enforcement regime for investigations which were confined to the UK. Where the conduct being investigated covered other EU Member States, the European Commission would have exclusive jurisdiction to investigate and punish. Post-Brexit, the European Commission can only investigate conduct (wherever it took place) with effects within the EEA. Anti-competitive conduct which takes place in the UK (either exclusively, or which may have adverse effects within the EEA) may be investigated by the Competition and Markets Authority (CMA). During the Covid-19 pandemic, investigations were largely suspended, but have now re-commenced (about 7 investigation were conducted in the EU ones in 2022) and with the possibility of a recession looming, we may expect an increase in this in both the UK and at EU level.
To address concerns that fewer companies are coming forward seeking leniency, the European Commission has issued a guidance notice to potential leniency applicants providing additional transparency on the process.
In the UK, almost uniquely, there is a statutory power for a court to disqualify a person from acting as a director for engaging in anti-competitive conduct. The CMA has stepped up its use of this tool and we have seen 25 such orders with 11- and 12-years' disqualification having been imposed on two individuals in the construction sector.
- Private damages cases
In the UK, the Competition Appeal Tribunal (CAT) has jurisdiction to hear competition damages cases and we are seeing a dramatic increase in the number of class actions (mostly on an opt-out basis) and as we go into 2023 there are about 30 such cases moving through the CAT. They need to be certified by the CAT as suitable for trial and 2023 will see admissibility issues being fought over, including the binding nature of decisions of the Court of Justice of the European Union (CJEU), the ability of defendants to communicate with class members and the suitability of the methodology being advanced by claimants.
- Safe harbors and guidance
The CMA is closely engaged with the European Commission and has been discussing formal cooperation agreements. We may see this formalized during 2023. The EU Commission has been consulting on a variety of updates to block exemptions and guidance notes. These include new R&D and Specialization block exemptions, Guidance on market definition and an important Horizontal Guidance note which includes a chapter on sustainability (see our article on this here).
- State aid
At EU level, the Commission has dealt with a great number of Covid-related aid applications and this is tailing off. It has also been examining the way in which approved aid has been administered.
The UK has recently adopted its own regime to deal with subsidies, the Subsidy Control Act 2022 (see our blog post on this here).
To know more about developments in trade, ESG, sanctions, chemicals, food and food contact materials regulation, insurance and criminal investigations, read the full article here.
