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04/05/16
In competition law terms, many businesses would benefit from a UK exit from the EU:
  • The EU Commission could no longer conduct dawn raids on companies in the UK.
  • There would be some limited freedom to adopt clauses in contracts that are currently banned by the EU.
  • There would be less risk of class action claims in the UK courts for damages becauses EU competition decisions and law would no longer bind the UK courts (provided the UK does not join the EEA).
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On the other hand, some things would not change with an exit:
  • UK competition law is largely based on EU competition law legislation and is unlikely to change much if the UK exits. Over time, there may be some divergence.
  • UK businesses which sell goods or services in the EU will continue to be bound by EU competition law. As now, EU competition law may apply if there is cross-border trade with EU countries (i.e., the issue of membership of the EU is irrelevant).
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Assuming the UK did not join the EEA afterwards, the downside of an EU exit would be:
  • The UK government would no longer influence competition decisions. However, realistically, the UK only has limited influence at the moment anyway. Influence in Europe will continue to be mainly through lobbying.
  • Cartels and breaches of the rules involving cross-border trade with the EU might be subject to investigation by both the EU Commission and the CMA, which might result in two fines. At the moment, if the Commission investigates, the CMA cannot.
  • For very large companies with turnover that hits the EU’s (very high) merger control thresholds, their mergers would still need a clearance in the EU. However, post-exit, they might also need a separate clearance in the UK. Currently, it is one or the other but not both. This would add to transaction costs.

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Vivienne Robinson Solicitors is the trading name of Vivienne Robinson Ltd, a law firm regulated by the Solicitors Regulation Authority (SRA no. 598617) and covered for PII purposes by Axis Specialty Insurance Ltd. Company registered in England and Wales, registration number 85556627. VAT registration number GB680936113.

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