A new UK-EU competition cooperation agreement is on the horizon.
On 29 October 2024, the UK Competition and Markets Authority (CMA) and the European Commission formally concluded the technical negotiations on a new future competition cooperation agreement between the UK and EU following the opening of negotiations in May this year.1 This will supplement the existing UK-EU Trade and Cooperation Agreement (TCA) which provided for the possibility of a supplementing agreement dealing with competition cooperation matters.This new future agreement will be of interest to businesses notifying transactions and mergers to competition authorities in the EU or UK. Once in force, it will enable direct cooperation between the European Commission, the national competition authorities of EU Member States ('NCAs') and the UK's CMA when it comes to competition investigations. A novel aspect of this agreement is that it will be the first of its type to enable NCAs to cooperate directly with a third country (i.e. a country that is not a member of the EU) competition authority, as is anticipated by the TCA.
Why cooperate?
Cooperation really is key when it comes to significant antitrust and merger matters and the impact on competition. A cooperation agreement is a type of framework that sets out the how certain matters of mutual interest are to be dealt with – in this case, competition matters between the UK and EU competition authorities. In essence, it is a commitment to work together and a way of facilitating an effective working relationship.
What do businesses need to know?
The CMA and European Commission press releases confirm that the key features of this new competition cooperation agreement will include provisions for competition investigations to be brought to each relevant party/authority's attention and for enabling coordination of investigations between jurisdictions where needed. For businesses that may be concerned about the practicalities of the sharing of information, when it comes to confidential data, the European Commission has reassuringly confirmed that the consent of the party providing the information will continue to be required (known as the 'waiver' process).2
A key practical implication of this new competition cooperation agreement may be the strengthening of the CMA's ability to gather market information and intelligence to enable it to identify mergers of potential interest. The UK's own merger control regime is based on voluntary notification (whereas the EU's merger control regime requires compulsory notification). This means that that in the UK:
- there is no requirement to notify mergers to the CMA.
- there is no prohibition on companies completing transactions without clearance from the CMA.
The CMA therefore relies on its mergers market intelligence function to scan markets in order to spot potential problematic transactions. It will be interesting to see how the competition cooperation agreement impacts the insight and information gathered by the CMA and the consequent impact on enforcement. On that note, the timing of the conclusion of these negotiations is fitting given the emphasis made by Prime Minister, Sir Keir Starmer, in his recent International Investment Summit Speech on the role of regulators, such as the CMA, in driving the UK's growth mission.3
What's next?
While technical negotiations for this new competition cooperation agreement are now complete, the finish line has not yet been crossed. It looks like 2025 is the aim, with it being anticipated that the agreement will enter into force in the coming year after EU and UK ratification procedures are finalised.
Footnotes
1 New UK-EU Competition Cooperation Agreement – GOV.UK
2 Competition Cooperation Agreement between the EU and the UK and New UK-EU Competition Cooperation Agreement – GOV.UK
3 PM International Investment Summit Speech: 14 October 2024 – GOV.UK
Originally published November 6, 2024.
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