Andrea Coscelli, CEO of the Competition and Markets Authority (CMA) has indicated that the UK competition law regulator may step closer to regional businesses with plans to open an office in Manchester.
This move is partly in anticipation of the increased workload Brexit is likely to generate for the regulator and partly because of a desire to become more "territorially distributed", in order to develop relationships with local economists and lawyers, "who know about regional problems".
Competition law applies to all businesses and any business, big or small, wherever located nationally, could be the target of enforcement action for breaching the rules. Indeed many of the UK's biggest businesses are based in the regions. Despite this, the CMA currently has only one substantial office, which is in Holborn, London where most of its 650 employees are based.
Brexit is expected to dramatically increase the volume of merger notifications to the CMA. Under the EU Merger Regulation (EUMR), if the thresholds for notifying a deal to the European Commission are met, there is no need to also notify national competition authorities in relevant EU Member States - notification under the EUMR effectively acts as a 'one-stop shop' for all required merger control filings within the European Union.
However, once the UK leaves the European Union, notifications made to the European Commission under the EUMR will no longer substitute for notification under the UK merger control regime. If a deal meets either the UK turnover or share of supply test, the CMA could call the deal in for investigation irrespective of any merger filing which may have been made to the European Commission under the EUMR.
The efficiencies gained by businesses (and corresponding work saved by the CMA) in notifying the European Commission in place of the national competition authorities of EU Member States will be lost in respect of the UK merger control regime.
A CMA office in Manchester could prove to be a double-edged sword for businesses based north of the midlands. Such businesses might have less distance to travel to crucial meetings with the CMA in relation to merger cases, Competition Act investigations and market investigations, however, the CMA could increase its use of dawn raids and enhance its intelligence gathering and detection of alleged competition law breaches, which could lead to greater enforcement action in the region.
Businesses in the North of England might see this as an opportune time to get their ducks in a row by ensuring competition law compliance. Our competition team has considerable experience in advising on all aspects of competition law and the author of this alert has recently transferred to the Manchester office.
Shoosmiths plans what now seems a very timely exclusive event to share tips on competition law compliance in our Manchester office next Wednesday (20 June 2018). Guest speaker at the event will be Keith Packer, the ex-British Airways commercial general manager, who spent eight months in a US federal prison for breaching competition law. Keith gives a very personal insight into the pitfalls and consequences of failing to comply with competition law.
Contact our highly experienced team for advice on all aspects of competition law. If you are interested in attending the event, get in touch by emailing [email protected]