News

Brexit: new competition rules to replace retained EU laws
25 February 2022

The Government is set to repeal EU laws that discourage “efficiencies, investment, and innovation” and replace them with regulations that work for British businesses, it has been announced.

If you own a business, here’s what you need to know.

What is changing?

After the UK officially left the European Union in January last year, a number of EU rules and regulations were retained to ease the transition.

Several of these pertained to competition law.

These laws exempt businesses from competition law in certain circumstances, but impose unnecessary burdens in other areas, discouraging partnership and innovation in the UK.

The Competition and Markets Authority (CMA) recommended a “new, bespoke competition law exemption” for the UK to replace retained EU legislation, which expires on 31 May 2022.

How will this benefit British businesses?

The new rules will encourage “vertical agreements” – defined as agreements between companies at different levels of the supply chain, such as farmers and supermarkets.

Vertical agreements are good for businesses as they result in efficiencies, investment, and innovation – and ultimately lower operation costs.

According to the report, the benefits include:

• Removing wide retail parity obligations from the exemptions, such as those specifying that a product may not be offered on better terms on any other indirect sales channels
• creating a more level playing field for high streets and brick-and-mortar retailers by expanding the exemptions to cover agreements that treat online and offline sales differently; and
• more flexibility for businesses to design their distribution systems.

Further reading

To learn more about the Draft Vertical Agreements Block Exemption Order, please click here.

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