Brexit: competition and State aid
Chapter 1: Introduction
Brexit: competition and State aid
1.Since the referendum on 23 June 2016, this Committee has published a series of reports on aspects of Brexit, including on the options for trade between the UK and the EU and implications for the protection of consumer rights.1
2.This latest report focuses on competition, encompassing prohibitions on anti-competitive behaviour by undertakings (antitrust), merger control, and State aid.2 It begins with an overview of the current competition regulatory and enforcement landscape, including the balance of competences between the EU and the UK in this area and the strengths of the UK’s competition regime. Criticisms of the operation of this current system at UK and EU-level are also considered.
3.Chapter 3 explores the short-term implications of Brexit for competition law and enforcement in the UK, focusing on antitrust and merger control. No such domestic framework exists in the UK for State aid, as EU law is applied directly and enforced by the Commission. Consequently, the implications of Brexit for UK State aid primarily relate to possible transitional issues and future policy decisions, and are discussed in later chapters focusing on transitional arrangements for competition matters (Chapter 4) and future UK State aid policy (Chapter 6). Future UK policy with regard to antitrust and merger control is considered in Chapter 5.
4.Based on the strong view of our witnesses that it would be desirable for the UK to continue cooperating with the EU on competition matters, we consider how this might be achieved through formal and informal arrangements. We examine the consequences of a situation where no UK-EU free trade agreement (FTA) or competition cooperation agreement is reached—particularly focusing on State aid, where the UK currently has only a limited domestic framework. We also address the particular devolution implications of operating under World Trade Organization (WTO) terms.
5.The report concludes by considering the future UK institutional framework for antitrust, merger control, and State aid.
The European Union Committee’s work
6.This report forms part of a coordinated series of inquiries undertaken by the European Union Committee and its six sub-committees following the referendum on June 2016. Given the centrality of consumer concerns to both UK and EU competition policy, this report is usefully read alongside our report on Brexit and consumer rights.3
This inquiry
7.The EU Internal Market Sub-Committee, whose members are listed in Appendix 1, met in September, October and November 2017 to take oral evidence, and received a number of written submissions; our witnesses are listed in Appendix 2. The Committee is grateful for their participation in this inquiry. We also thank our Specialist Adviser, Professor Erika Szyszczak.
8.We make this report to the House for debate.
1 European Union Committee, Brexit: the options for trade (5th Report, Session 2016–17, HL Paper 72); European Union Committee, Brexit: will consumers be protected? (9th Report, Session 2017–19, HL Paper 51)
2 In this report, we use the term ‘merger control’ to refer to EU and UK regulation and enforcement of mergers and acquisitions.
3 European Union Committee, Brexit: will consumers be protected? (9th Report, Session 2017–19, HL Paper 51)