This blog post draws on the presentation given by Professor Catherine Barnard (University of Cambridge) at the ESRC ‘UK in a Changing Europe’, ‘UK Regulation after Brexit Revisited’ event held at the British Academy in London on 27th October 2022.
(by Andreas Stephan) The UK’s new Prime Minister, Rishi Sunak, promised to put EU laws through the ‘shredder’, as part of the leadership contest campaign video he released in August when running against his predecessor, Liz Truss. The Retained EU Law (Revocation and reform) Bill (REUL) promises to impose a sunset clause on 2,400 or so pieces of retained EU law, which will cause them to cease applying in the UK unless ministers actively act to keep them. This includes all secondary law (regulations and directives) and related case law of the European Commission and Court of Justice of the European Union (CJEU), which plays an important role informing UK Competition Law (at least to the extent that it relates to EU case law delivered until 31 December 2020). This blog explains why the law could create significant uncertainty for the enforcement of UK competition law and what might be done about it.
(by Tom Carr) On the 12 April 2018 the BBC reported that International Airlines Group (IAG) had acquired a 4.6% stake in Norwegian Air Shuttle (Norwegian). IAG (which includes BA, Iberia and its most recent acquisition, Aer Lingus) responded that their “minority investment is intended to establish a position from which to initiate discussions with Norwegian, including the possibility of a full offer for Norwegian”. Norwegian is bigger than Aer Lingus at Gatwick, has a higher route overlap than BA had with Aer Lingus, and is currently an industry disrupter in the lucrative transatlantic market. Will the standard remedy of a few slot divestitures be sufficient to address the competition concerns, or is it time to start blocking mergers? Read the rest of this entry »
(by David Reader) After Melrose plc last week formalised its £7.4bn hostile takeover bid for the Armed Forces supplier GKN plc, Business Secretary Greg Clark is facing renewed pressure from the Labour Party and the UK’s largest trade union, Unite, to block any forthcoming deal on national security grounds. Moreover, in response to questions over the transaction, the Prime Minister has herself declared that ‘the government as a whole will always act in the UK national interest’ when faced with such takeovers. Yet, although there is every possibility that the resulting merger would be subjected to national security scrutiny, there is only a very remote chance that the transaction would be blocked outright. Read the rest of this entry »
(by Mike Walker^) In his post last month, Steve Davies bemoaned the lack of evidence on the magnitude of harm deterred by the activities of the Competition Agencies. He presented some estimates from research in CCP on cartel deterrence, concluding most strikingly: “On the most conservative of our estimates, more than half of all potential cartel harm never occurs, because it is deterred. This is very much a lower bound, and the proportion could be as high as 90%.” Read the rest of this entry »
(by Peter Ormosi) While it is widely recognised that last year’s EU referendum caused significant uncertainty for markets, some early indications were that it had not reduced the level of business confidence. Almost a year on, our research – based on a careful study design of a treatment and control group and using data from S&P’s Capital IQ – finds that the uncertainty surrounding the referendum has in fact led to a significant drop in merger numbers and the numbers have failed to recover to earlier levels. Apart from establishing a causal relationship, the study suggests that the post-referendum policy uncertainty is helping the largest M&A transactions, while hindering the smaller ones, with possible negative consequences.