Much of the UK’s competition law comes from EU regulations. Therefore Brexit will likely impact how businesses can legally compete with one another, unless any future deal says otherwise.
Until the end of 2020, EU regulation on competition law will continue to operate during the transition period. From 2021 onwards, the Competition and Markets Authority (CMA) in the UK will take over from the European Commission (EC) in enforcing competition law.
From 2021, EU authorities will lose the power to carry out on-site investigations (also known as ‘dawn raids’) in the UK. Instead, their powers of investigation will be limited to making written requests for information from UK-based companies. The CMA will replace them as the central enforcer of competition law in the UK, investigating anti-competitive agreements and any potential abuse of a dominant position.
The majority of EU competition law will be transferred into UK law. In particular, the EU block exemption will be retained in UK law beyond Brexit, meaning distribution agreements can continue to benefit from the vertical agreement block exemption.
Where a formal investigation by EC authorities has been initiated before the end of the transition period, the EU will have the power to continue that ongoing investigation into 2021.
Also, commercial practices conducted by companies based outside the EU will continue to be subject to potential investigation by EC competition authorities, where there is an actual or potential effect on EU trade.
For more information on the impact of Brexit on competition law in the UK, please see the government website.