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11 November 20243 minute read

UK-EU Competition Cooperation Agreement: A new era of collaboration

On 29 October 2024, the UK and the EU formally concluded negotiations on the UK-EU Competition Cooperation Agreement. This is a supplementing agreement to the EU-UK Trade and Cooperation Agreement, which came into force on 1 May 2021.

Subject to ratification on both sides, the agreement is aimed at improving cooperation between the UK's and the EU's competition authorities. Its intention is to enable more effective enforcement of competition laws. This is important given that anticompetitive conduct can, and often does, have cross-border impact.

Specifically, the agreement will allow the UK's Competition and Markets Authority (CMA), the European Commission (Commission) and the national competition authorities of EU Member States (NCAs) to cooperate directly. This collaboration will be on both antitrust and merger investigations:

  • important investigations will be disclosed between authorities; and
  • investigations will be coordinated when necessary, setting out principles of cooperation aimed to avoid conflict between jurisdictions.

Such cooperation will lead to heightened scrutiny. Antitrust investigations will likely be more prevalent, since detection will be more likely and the risk of contagion from one jurisdiction to another will inevitably be higher. Parallel investigations are also likely to increase, with a higher chance of coordinated dawn raids at their outset.

With respect to merger control, there may be additional complexity surrounding merger clearances, albeit that in relation to the exchange of confidential information, the consent of the undertaking providing the information (in the form of a waiver) will continue to be required.

 

Practical steps for businesses to take

Given this development, businesses active on both sides of the English Channel (or La Manche, depending on your perspective) should be taking a number of practical steps:

  • they should review their past and present commercial arrangements to ensure that these do not have the object or effect of restricting competition. Key areas to consider are price fixing (a broad concept that can extend to fixing any element of pricing or related trading conditions) and market sharing;
  • businesses that might be considered to have a dominant position in a market should consider whether their conduct is outside of the normal parameters of competition and may be deemed abusive. This includes conduct which exploits customers or suppliers (eg excessive pricing), or conduct that removes or weakens competition (eg loyalty rebates);
  • if potential infringements are identified, organisations should assess whether to report that conduct to the CMA, the Commission and/or an NCA, potentially availing themselves of leniency procedures, which can offer significant reductions to fines;
  • organisations should future-proof their businesses, delivering competition law compliance training to employees and implementing/updating compliance policies and procedures to ensure their employees avoid infringing conduct in the future; and
  • businesses should take advice on the implications of parallel merger control reviews, building sufficient leeway into transaction timelines to account for cooperation on this front.

If you have any questions, or would like to discuss how this will impact your business, please contact one of the authors.

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