In this section we highlight some of the issues around Antitrust, public procurement and state aid.
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Competition law is designed to ensure that anti-competitive practices do not distort fair competition. The key components of these rules are the 'Antitrust' provisions, i.e. the prohibition of anti-competitive agreements and the prohibition on the abuse of a dominant position; merger control rules; and state aid rules.
If the UK negotiates a free trade deal similar to the terms of the European Economic Area (EEA) Agreement (like Norway, Iceland and Liechtenstein), which allows it access to the single market, there will likely be almost no substantive impact on the EU competition law enforcement for UK businesses, as the EEA Agreement includes provisions that mirror those set out in the Treaty on the Functioning of the EU, meaning UK courts and competition authorities would likely continue to be bound by the EU Courts rulings and European Commission decisions. The main change would be that the European Free Trade Area (EFTA) Surveillance Authority would have the supra-national level jurisdiction to apply the rules, rather than the European Commission.
If the UK leaves the EU altogether, without remaining part of the EEA or having a similar agreement with access to the single market, this would have implications for the enforcement of competition law. For the most part, these would be procedural rather than substantive.
Antitrust contact: Guy Lougher
If the UK negotiates a free trade deal along the lines of the EEA or EFTA, it would need to adopt the EU procurement rules. Even if the UK exited the common market completely, the WTO's Government Procurement Agreement still requires open and fair competition in procurement processes.
The reality is that whilst European procurement law is about the opening up of borders to pan-European trade, at a domestic level it is also an important part of attempts to deliver value for money. In light of this some standardised, mandated approach to competition is always likely to be required. In fact, the UK’s approach has been to go beyond the minimum requirements set by EU law. In any event, until an agreement is reached with the EU, current EU procurement rules remain in force through UK legislation.
Public procurement contact: Caroline Ramsay
The UK’s future ability to negotiate a trade deal with the EU is sure to be dependent on it respecting the common market in the interim. Legal compliance with State aid law is therefore still very much an issue. Until a new agreement is reached with the EU, the EU State Aid rules continue to have direct effect and therefore claims for damages and injunctive relief against recipients of alleged aid can continue to be brought in the domestic courts.
If the UK negotiates a free trade deal similar to the terms of the EEA, this would likely entail a requirement to adhere to the state aid rules. For example, for access to the EU single energy market, it would be necessary for the UK to comply with the state aid rules. If the UK did not join the EEA but, like Switzerland, joined EFTA, the outcome would be more uncertain and would depend on the arrangement the UK were to negotiate.
Absent an agreement under which the UK agrees to adhere to the state aid rules, they will not apply as they are a matter of pure EU law, enforced against the State. The UK would, however, be bound by World Trade Organisation (WTO) rules, which are less intrusive than the EU state aid rules but contain no exemptions, only prohibitions. For example, unlike the EU state aid system, there is no procedure under which various forms of state support have to be notified and approved by the WTO; instead the State would need to rely on dispute settlements, without any retrospective recovery of unlawful aid. Private parties are unable to take action against measures that harm them, as only WTO member states can seek enforcement.
State aid contact: Caroline Ramsey