Transcript

IAN GILES  Richard, great to see you again. We're going to talk today, I'm afraid, about the "B" word, Brexit. This has been on everybody's minds for three years now, or longer in some cases. But in the competition world, we've got of course, like everyone else, a lot of uncertainty. A real focus of that uncertainty at the moment is around transactions, and so how merger control is going to work, both for deals which are on the cusp and might be in process when the transition to Brexit takes place, but also for those in the future that might be looking at dealing with both the UK and an EU regime in parallel. Do you want to tell me a little bit about how you see that working in the future? 
RICHARD WHISH QC There is a fairly major difference here, in the sense that, of course, at the moment one has the one-stop shop, so that if a transaction has an EU dimension then you notify it in Brussels, which has the consequence that you don't also notify it in the UK. After Brexit, that rule falls away and so there will be cases that have to be filed both at EU and at UK level. Funnily enough I think it will mean some transactions will also have to be filed in Ireland because once you have taken out turnover of certain undertakings probably that will bring one below the EU threshold so that might trigger a UK and also an Irish…
IAN GILES
So, you would have a, kind of, net decrease in EU filings but an increase in UK and Ireland and possibly other Member States…
RICHARD WHISH QC
Because so many of those businesses are Anglo-Irish.
IAN GILES
Yes.
RICHARD WHISH QC
Many of your clients will be perfectly accustomed to multiple filings so in itself there's nothing so odd about that but the CMA's estimate, I think, is that probably about 30 to 50 more cases will be notified to it than historically. What I think is interesting is that if you think of some of the big cases in recent years that have been prohibited, Siemens/Alstom, Deutsche Börse/London Stock Exchange, I assume, well I'm certain, they would have had to have been notified in the UK and there would have been very significant competition issues in the UK. So that's major new work for the CMA to do and, of course, then one of the questions will be what are the cooperation mechanisms in place between the CMA and DG Comp for exchanging information, discussing remedies and so on.
IAN GILES
A big issue, we saw this in Lord Tyrie's letter, is how these regimes would work in parallel procedurally. So obviously we have a voluntary regime in the UK versus mandatory at EU level. We have a much longer overall timeline in the UK potentially, which makes it difficult to align on things like remedy decisions. Do you think that the UK is going to have to move closer to the EU model?
RICHARD WHISH QC
Well I wouldn't say "have to" move. I mean, different merger systems around the world do have different timetables and so on and so forth, but I can see that there might be a head of steam for further convergence as the years go on. Perhaps particularly with the really big cases. But we will see.
IAN GILES
Because there's always the desire to be at the table when the key decisions are being made which you already see between the US and…
RICHARD WHISH QC Clearly so…
IAN GILES
So moving on from mergers where there's obviously a lot that's going to change, we also have competition investigations, cartels and dominance cases, and the UK is suddenly going to have jurisdiction there over a whole realm of cases which previously had been dealt with in Brussels.
RICHARD WHISH QC
Well, to me this is the really interesting area because, if you think about it, over the years the really big cartel cases, frankly, are done by the Commission. And there have been plenty of cartel decisions over recent years where major UK PLCs have been found liable for having infringed and this is a whole range of sectors, whether it's financial services, and LIBOR and FOREX, it can be freight forwarding, air cargo, haberdashery, zinc phosphate, car glass, you know, these are all cases where PLCs were found guilty and in the future, of course, the Commission might still investigate those cases or they might be cases more naturally for the UK or there might be parallel investigations. So I think that's a very interesting area to watch out for in the future.
IAN GILES
Yes, I mean a real potential increase in double jeopardy for companies that have got a European operation.
RICHARD WHISH QC
One might add, of course, will the CMA, depending on resources and so on and self-confidence, would it have any appetite for taking on a Google, Facebook, Amazon, type case because naturally they have been for DG Comp in the past, but that's not to say that the CMA might not want to look at some of them in the future.
IAN GILES
There's a competition SI published just in September – a statutory instrument which is designed to allow the CMA to enforce commitments coming out of the EU's previous decisions. I mean that, I guess, is an important step just to make sure that those decisions have effect.
RICHARD WHISH QC Yes, I've got it here, so this is SI 2019/1245. It is important, I mean you need this, but I think in essence it's pretty simple – and it is that undertakings that have given commitments to the Commission, either under Article 9 of Regulation 1 in an antitrust case or under the Merger Regulation in merger cases, commitments have been given to the Commission, in the future those will be taken over by the CMA insofar as they have impacts in the UK, and this is to enforce but also to waive, revise, etc. So, you need that as part of the machinery. I don't think there's anything particularly complicated about it.
IAN GILES But then going to the point we were just on, which I think is the really interesting one – competition policy in the new world. The UK has always had a prominent role at the, kind of, global antitrust table and I'm sure will be keen to maintain that, which I think probably does point to them trying to take on and be involved in the next generation of big platform cases.
RICHARD WHISH QC
The first thing I would say on that is that the OFT historically, then the CMA, and CC historically, are highly respected in the international community and have always been fairly high profile in the ICN, ECN and OECD. Obviously we won't be in the ECN but we will certainly participate in the ICN, OECD and various other international fora so that will be important going forward. What I think is interesting here is actually not what effect will Brexit have on our competition policy, because I think that will be fairly minimal, in the short to medium term, what is more interesting is, as it were, the Tyrie proposals, which were tabled earlier this year in combination with BEIS’s quinquennial review of the regime which is required by the ERRA 2013. Now, as you know, there's lots of interesting stuff there. It's not Brexit stuff, it's about what system do we want going forward, and I think there's a lot to confront there and a lot of interesting issues.
IAN GILES
But it will be interesting to see, I guess, to what extent, if the UK starts embracing some more of these, let's say consumer focused or, kind of, regulatory approaches that the Tyrie paper talks about, whether that drives change in Europe in the same direction or whether you start to get more of a divergence.
RICHARD WHISH QC
Whatever happens in any part of the world, competition authorities are linked to one another through the ICN. It's a superb organisation and the cross-fertilisation of ideas that happens there is absolutely clear to see. And this business of the convergence of consumer and competition law, it's been an issue for many years and it's going to continue to be an issue for many years yet to come.
IAN GILES
Well, thank you very much Richard, that's been really interesting.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see nortonrosefulbright.com/legal-notices.

Law around the world
nortonrosefulbright.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.