In a nutshell
It is the job of the UK and EU regulatory authorities to ensure that markets function effectively on the basis of fair and open competition. The rules in the UK and EU are substantially similar, but UK bodies concentrate on those rules that have their greatest effect domestically, while EU authorities deal with matters affecting multiple member states. Of all areas of law in the UK, competition law is – at present – most closely intertwined with the EU. While most competition rules are enshrined into domestic law, the changing relationship between domestic and European competition authorities as Brexit takes effect is likely to cause much head-scratching among businesspeople, Eurocrats and lawyers alike.
On 1 April 2014, the Competition and Markets Authority (CMA) was established as the UK government’s main regulatory body, adopting many of the functions of the Office of Fair Trading (OFT) and the Competition Commission (CC). The CMA works closely with industry-specific regulatory bodies, such as Ofcom for the media and telecoms industry. With a higher budget and greater resources available than ever before, the CMA was created in order to strengthen business competition in the UK and crack down on anti-competitive activities.
Competition authorities have extensive investigative powers – including the ability to carry out dawn raids – and can impose hefty fines. The CMA continues to become more proactive and litigation-minded, and the European Commission – the regulator dealing with matters also affecting other EU countries – readily doles out big fines where necessary.
What lawyers do
- Negotiate clearance for acquisitions, mergers and joint ventures.
- Advise on the structure of commercial or co-operation agreements to ensure they can withstand a competition challenge.
- Deal with investigations into the way a client conducts business.
- Bring or defend claims in the Competition Appeal Tribunal (CAT).
- Advise on cross-border trade or anti-dumping measures (preventing companies exporting products at a lower price than normally charged in the home market).
- Regulators investigate companies, bring prosecutions and advise on the application of new laws and regulations.
Realities of the job
- You won’t get much independence; junior lawyers work under the close supervision of experienced partners. In the early days, the job involves a great deal of research into particular markets and how the authorities have approached different types of agreements in the past.
- You need to be interested in economics and politics.
- The work demands serious academic brainpower twinned with commercial acumen.
- As a popular area of practice it’s hard to break into. Work experience with a regulator or at the European Commission in Brussels will enhance your prospects.
- Advocacy is a relatively small part of the job, though you could end up appearing in the High Court or the CAT.
- In international law firms you will travel abroad and may even work in an overseas office for a while, perhaps in Brussels. Fluency in another language can be useful. There is also a trend for lawyers to switch between private practice and working for the regulators.
- Brexit will be a big topic here. Merger control in the UK predates that on an EU level, so complete separation from the EU may not have a large direct impact on the UK merger regime. However, UK companies could lose their ability to request merger clearance under both jurisdictions simultaneously – separate submissions may have to be made to both UK and EU regulators, driving up costs for businesses.
- It's also possible that Britain's exit from the EU could loosen state aid restrictions within the UK. Generally the EU restricts a government's ability to offer support to specific companies if it would give a company an advantage over its competitors. Recently the Treasury announced a deal with EU competition chief Margrethe Vestager, which involved RBS paying £835 million to competitors to avoid restrictions on state aid. Exceptions are made if the aid in question is shown to be important to general economic development.
- The National Audit Office believes that the CMA has made large strides in tackling the failings of previous competition regulators and that enforcement is now more coherent than before, but that the regulator could still increase the volume of successful enforcement cases it brings and improve business awareness of competition law. While the CMA has successfully investigated abuse of dominance matters, especially in the pharma sector (it recently fined Pfizer £84.2 million for increasing the price of an anti-epilepsy drug supplied to the NHS by a staggering 2,600%), it is taking heat for limited action on cartels.
- The CMA continues to focus on online goods and service providers, especially for misleading pricing infringements, while using open letters to advise businesses on online compliance matters and their rights when dealing with suppliers. Meanwhile, the EU has continued efforts to create a Digital Single Market, with a focus in data protection and the creation of equal pricing across member states. The subsequent scrapping of roaming mobile charges means that customers won't be charged more to use their phone abroad.
- A major antitrust case in 2017 saw Google fined a record €2.4 billion by the EU Commission; the company was found to have manipulated its search engine results to unfairly prioritise its own comparison shopping services over those offered by its competitors.
- An increasingly globalised competition law network is coming to the fore, as regulators are visibly co-ordinating cases. In 2017, the offices of several companies across various EU countries were raided – including those of Swiss chemicals maker Clariant and US competitor Celanese – over concerns that they were participating in a cartel. The number of regulators in Asia has grown in recent years; their presence has proliferated in South Korea, Taiwan, Japan, Singapore and China, and their efforts are increasingly focused on the pursuit of international cartels.
- By assessing all mergers within a 40-day limit, the CMA is tightening its grip on merger control. Increased efficiency means it now clears more cases in phase one without the need for the more intensive second phase, and a number of related legal challenges have developed into case law.
- The asset management industry is coming under increasing scrutiny. There are concerns that the industry is taking advantage of opaque pricing techniques and consumer ignorance in order to overcharge. In June 2017, the Financial Conduct Authority requested that the Treasury give it more regulatory control over the investment consultant market after releasing a study into the industry. The regulator also rejected the suggestions for improvement put forward by the three largest investment consultants as insufficient; it is therefore possible that the industry will be referred to the CMA for investigation.
- The CMA has launched an enforcement action against gambling companies that are found to be treating customers unfairly and breaking consumer law. Specific concerns include the use of misleading advertising that entices consumers with tempting promotions while stacking the odds unfairly against them.