Merger Control + Cartel | 26 February 2016
On the face of it, it may seem that a Brexit would mean that UK businesses would no longer be subject to EU competition law. That view, however, is too simplistic. First, UK competition law, is modelled on EU rules and is expected to remain largely intact. We believe it is unlikely this will change given the similarity of the substantive law not just in Europe but throughout the world. Second, EU competition law will continue to apply to businesses whose activities have an effect on trade between EU member states. Jurisdiction to enforce EU competition law does not depend upon a business being based in a country that is part of the EU. In a globalised world, most businesses who sell their products, services or source their inputs from other member states will meet the EU ‘effect on trade’ test. Therefore, EU competition rules will continue to apply to many operations of UK businesses after a Brexit, as they do now. Nonetheless, there may be significant legal and procedural changes, the details of which will depend on the post-Brexit model that the UK agrees with the EU.
Shepherd and Wedderburn has been for many years offering balanced and impartial advice on how the different scenarios might play out in the event of constitutional change.
With the EU referendum now only months away, members of our dedicated Brexit Advisers will continue to interrogate the ‘what if’ questions, relating to specific sectors, that will emerge when the UK decides whether to remain in or leave the EU.
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