Competition Section Seminar: Brexit Part 1: Models, mergers and the wider competition framework. Tuesday 13 September 2016

Transcription

1 Competition Section Seminar: Brexit Part 1: Models, mergers and the wider competition framework Tuesday 13 September 2016

2 What is the Competition Section? The Competition Section is a Law Society subscription based membership group which provides the support you need to be prepared for market change in competition law and practice, helping you to understand the implications for both you, your business and consumers. We deliver expert analysis and practical guidance through our face-toface networking events, topical webinars and archived podcasts, providing practical guidance with insight from competition law experts, both solicitors and representatives of related institutions. For more information about the Competition Section or to join -

3 Competition Section calendar 13 May: (webinar) Competition at the FCA: An update for lawyers Speaker - Deb Jones, director of Competition, FCA (Financial Conduct Authority) 1 September: (webinar) Competition law and the future of the Block Exemption in the insurance sector Speaker - Stephen Smith, partner, Bristows LLP 14 September: Horsfall Turner Essay question online preview What changes, if any, do you think should be made to UK competition legislation, and to the way it is enforced, in the event of a UK exit from both the European Union and the EEA? entry deadline Friday 11 November October: (seminar) Brexit Part 2: Litigation and Enforcement Speakers - Emeritus Professor Richard Whish QC (Hon), Kings College, London & Tim Ward QC, Monckton Chambers 1 December: Annual Competition Dinner and Awards Feedback/Suggestions - Competition Section LinkedIn group or competitionsection@lawsociety.org.uk

4 Carolyn Thurston Smith EU policy adviser (London) Helena Raulus EU internal market adviser (Brussels)

5 Stakeholder engagement No position on referendum but publication of report and economic modelling Brexit webpage providing updates on stakeholder engagement, press activities and briefings Meetings held with the Shadow Lord Chancellor and officials from the following departments: HM Treasury; the Ministry of Justice; the Department for Business, Energy and Industrial Strategy; and the Department for International Trade Robert Bourns and Catherine Dixon meeting with the Lord Chancellor and Justice Minister Oliver Heald MP and also the Home Secretary and Security Minister tomorrow and in process of setting up meetings with the Secretary of State for Exiting the EU, David Davis and the chief legal advisor to the Foreign and Commonwealth Office

6 Policy priorities (1) Continue access for lawyers to practise and establish in EU member states: To ensure that the solicitor profession can maintain its access to the EU market and be seen as the gateway to Europe for legal services, the Government should seek to maintain the current level of access to practise and establishment in EU member states, and to represent clients before the courts. This can be achieved by maintaining, or introducing, arrangements equivalent to the following EU Directives: Lawyers' Services and Lawyers' Establishment Directives: This legislation gives solicitors the ability to: practise home state law; practise host state law (with some conditions); to set up a branch (or office) and to re-qualify without equivalence examination after three years' practice of host state law. Professional Qualifications Directive: This provides the ability to recognise English and Welsh solicitor qualifications and re-qualify into any EU/EEA legal profession through an equivalence examination.

7 Policy priorities (2) Maintaining judicial cooperation and mechanisms which have been beneficial to the legal framework for civil justice (including in commercial matters) such as choice of law, jurisdiction and recognition and enforcement of judgments.t his makes the use of English and Welsh courts more appealing to both EU and non EU litigants and adds to the attractiveness of using English law for their contracts. The mechanisms increase certainty and speed for businesses and consumers. The UK must also continue to work with its European partners to tackle issues of international importance such as organised crime and terrorism. This should include: Maintaining a system for cross-border cooperation of courts in the context of criminal cases including participation in bodies such as Eurojust. Cooperation in criminal justice, policing and the fight against terrorism by sharing of information and cooperation in policing to joint security operations (Europol) and facilitating the criminal justice process. Specific measures which assist in facilitating swift and collaborative action to tackle cross border issues including the European Arrest Warrant, European Investigation Order and Schengen Information System II. Next steps: working with specialist policy committees to consider key issues and develop policy lines in specific areas of law. For competition liaising with the Competition Section Advisory Committee and to identify issues for further exploration - eg allocation of jurisdiction, transitional arrangements, avoiding conflict in future regulation

8 EU Competition issues if outside EEA Allocation of jurisdiction in competition cases where EU law continues to apply to UK businesses due to an appreciable effect on trade in the EU (relationship between UK and EU competition authorities) Transitional arrangements to deal with cases in progress or appeals against existing cases Need for cooperation in setting future competition legislation to ensure that regulations in the EU and UK do not conflict

9 Competition issues domestic Careers and UK staff retention of competition practitioners Teaching of EU law in the UK Resourcing implications for CMA and CAT as anticipated increase in cases to be dealt with in the UK Recognition of EU decisions for follow on actions Ensuring UK competition policy continues to recognise the need for political neutrality and independence Introduction of new anti-trust block exemptions

10 Brussels Office activities Law Society core issues: free movement of lawyers, recognition and enforcement of judgments Our own expertise, e.g. CCBE Brussels Office core issues: EU institutions and legal developments Policy advisers and office portfolios Providing analysis Engaging with stakeholders

11 Mark Clough QC Dentons LLP

12 Brexit - a personal view from a UK competition law solicitor in Brussels

13 OVERVIEW no models will work as well as now English and Welsh solicitors will lose privilege and rights of audience in EU competition cases Norway will not allow the UK to join EEA or EFTA, which would otherwise involve new but similar enforcement system UK already belongs to the WTO which so far has not encompassed competition law explicitly despite Kodak/Fuji case if Scotland votes for independence, it will dilute competition law enforcement in sectors such as energy what will Northern Ireland do?

14 SUBSTANCE additional burdens for business UK or is it England becomes additional jurisdiction for merger control, cartels and abuse of dominance for non-uk business at least what about state aid law? WTO countervailing duties only apply to export subsidies in general

15 SUBSTANCE will the UK as a new maverick or nationalist state leave the ICN, certainly will not belong to the ECN and case allocation system no escape for international UK business from EU merger control and cartel fines how will the CMA deal with Google, mobile phones and big data (and Gazprom-not a UK problem)? Only option that will maintain similar competition regime would be EFTA/EEA but will no longer have serious influence

16 PROCEDURE merger control procedure need not change but no referral to Brussels by the CMA or merging parties will be possible, despite the additional cost of national UK filings Will there being any competition law enforcement otherwise in the UK? What are the UK competition law expert solicitors going to do if Brexit really happens?

17 PROCEDURE will all the banks, insurance companies and multinational businesses have to find Lawyers qualified in other EU countries to replace their UK advisers? For some like Shell and Unilever, that is easy because of their structure how is the law society going to help you to overcome UK politicians - how about a CCBE or ELI inspired forum on the reform of the EU? Do you think Cameron and/or May know that English is the working language of the EU? If they did, why have they not tried to lead the EU to seek the obvious advantages? To leave is to deny our clients a natural advantage.

18 CONCLUSIONS Will there be political control of competition law enforcement, as the SNP indicated would be the case if they won the Scottish Independence Referendum?

19 Jonathan Parker partner, Latham and Watkins LLP

20 Brexit: Implications for UK Merger Control Jonathan Parker Law Society, 13 September 2016 Latham & Watkins operates worldwide as a limited liability partnership organized under the laws of the State of Delaware (USA) with affiliated limited liability partnerships conducting the practice in the United Kingdom, France, Italy and Singapore and as affiliated partnerships conducting the practice in Hong Kong and Japan. The Law Office of Salman M. Al-Sudairi is Latham & Watkins associated office in the Kingdom of Saudi Arabia. Copyright 2016 Latham & Watkins. All Rights Reserved.

21 Brexit: Implications for UK Merger Control Impact on UK merger control depends on Brexit model Norway model business as usual? EC primary jurisdiction One-stop-shop Referral mechanisms Implications of alternative models EU/UK concurrent jurisdiction End of EC primary jurisdiction 21 Art. 4(4) cases since 2004 Celesio/Sainsbury s, Muller/Dairy Crest, Arriva/Northern 16 Art. 9 cases since 1991 McKesson/UDG, Thomas Cook/Co-op/Midlands Orange/T-Mobile, Hutchison/O2 21

22 Brexit: Implications for UK Merger Control Disapplication of one-stop-shop Transactions falling under Art. 1 thresholds Art. 4(5) referrals 10 Article 22 referrals Procter & Gamble/Sara Lee, Amadeus/ Navitaire Practical implications for UK cases Increased volume Complexity Orange/T-Mobile, Hutchison/O2 Increase in CMA mergers staff Cost/complexity for merging parties Possibility of diverging outcomes/approaches to cases Need for increased cooperation between EC/CMA 22

23 Brexit: Implications for UK Merger Control Re-emergence of public interest criteria? Government interest in protecting areas of economy Additional s.58 specified considerations General reversion to public interest test Wider implications? Review Art. 1 turnover thresholds Review of share of supply test Divergence of EU/UK approach to merger control Scottish independence and separate NCA 23

24 Jackie Holland special adviser, Slaughter and May

25 Implications of Brexit for Other Areas Law Society Competition Section Jackie Holland Special Adviser, Slaughter and May 13 September 2016 /

26 A Possible Framework for Assessment (if outside Norwegian model) Factors to consider Source of relevant rules/laws: EU Treaty/Regulation/Decision v UK legislation in place Relative difficulty of untangling: Would current provisions work post-brexit? What powers wouldn t work/would be lost? Importance of rules/sector(s) affected e.g. Objective of rules and related Government policy objectives; Is provision of essential service/utility at risk? Value of sector to economy? Urgency short term (could it work even if untidy?) v long term political considerations important to stop following EU rules early? Will UK businesses lose out if no solution found? / Implications of Brexit for Other Areas Level of Brexit Risk Urgency to Fix 26

27 to help in prioritising action Level of Brexit Risk High Low Low High Urgency to fix / Implications of Brexit for Other Areas 27

28 State aid (if outside Norwegian model) Brexit risk/ Urgency Some current challenges / High risk rules are set out in EU Directive/Regulations/Guidance Urgency likely to be high since seems likely that some form of restrictions on subsidies will be required as condition of trade agreements with other countries Status of EU approval decisions post-brexit - Grandfathering/transitional arrangements for existing EU decisions? Who will administer rules? CMA? Pre-notification discussions when is it no longer worth starting process in Brussels? What will/should the new rules look like? Based on EU rules? Opportunities to make more efficient? Implications of Brexit for Other Areas 28

29 Sectoral Regulation (if outside Norwegian model) Brexit risk/ Urgency Some current challenges Low-High risks need to stocktake situation for each sector Urgency essential to ensure that services continue to work post- Brexit Regulatory regime heavily based on EU policy/law in many sectors. Mostly implemented into UK legislation, but some rules (e.g. EU Regulations) will fall away on Brexit e.g. roaming regulations (Telecoms) Some rules will be messy on Brexit e.g. need to notify EU, follow EU rules Trade with Member States essential in some areas e.g. Ireland, interconnectors and very important to UK in others e.g. financial services Some policies behind the rules could be reassessed in longer term e.g. facilitating rules designed to facilitate single EU market, climate change? security of supply self-sufficiency may be of increasing importance? Opportunities to make more efficient? EU directives/rules that need to be implemented before Brexit costs to business if may no longer be relevant / Implications of Brexit for Other Areas 29

30 Public Procurement (if outside Norwegian model) Brexit risk/ Urgency Some current challenges Low-medium EU rules implemented in UK, but some issues to be resolved Urgency important to ensure that UK businesses not disadvantaged Working assumption that Government would require some form of procurement regime for UK public bodies. Query if this would need to extend to some bodies currently caught e.g. utilities? Standalone public bodies with more commercial focus? If currently implemented EU rules apply for a while, will they work e.g. access to TED/etc? Would this put UK business at a disadvantage through enabling EU businesses to bid for contracts in the UK whilst UK businesses could not bid for EU contracts? Transitional arrangements how will it work for procurements straddling Brexit? What will/should the new rules look like? Based on EU rules? Opportunities to make more efficient? / Implications of Brexit for Other Areas 30

31 Jackie Holland, Special Adviser Tel: Slaughter and May, 2016 This material is for general information only and is not intended to provide legal advice. For further information, please speak to your usual Slaughter and May contact. PowerPoint Presentation /

32 Competition Section calendar 13 May: (webinar) Competition at the FCA: An update for lawyers Speaker - Deb Jones, director of Competition, FCA (Financial Conduct Authority) 1 September: (webinar) Competition law and the future of the Block Exemption in the insurance sector Speaker - Stephen Smith, partner, Bristows LLP 14 September: Horsfall Turner Essay question online preview What changes, if any, do you think should be made to UK competition legislation, and to the way it is enforced, in the event of a UK exit from both the European Union and the EEA? entry deadline Friday 11 November October: (seminar) Brexit Part 2: Litigation and Enforcement Speakers - Emeritus Professor Richard Whish QC (Hon), Kings College, London & Tim Ward QC, Monckton Chambers 1 December: Annual Competition Dinner and Awards Feedback/Suggestions - Competition Section LinkedIn group or competitionsection@lawsociety.org.uk

33 Competition Section Seminar: Brexit Part 1: Models, mergers and the wider competition framework Tuesday 13 September 2016

34 How to get tonight s slides 1. Open from events@lawsociety.org.uk subject line Competition Section survey.. 2. Click on the survey link 3. Provide your feedback on the event 4. At the end of the survey follow the link to download the seminars slides.