At the end of 2020, the United Kingdom (UK) and the European Union (EU) signed the EU-UK Trade and Cooperation Agreement (TCA), which both parties then ratified in 2021. As to antitrust cooperation, the agreement emphasized the need for cooperation and coordination when the EU and UK antitrust authorities are analyzing the same or related conduct or transactions.1 More concretely, the TCA envisaged that detailed cooperation mechanisms would be agreed and signed in the future.2
Those pledges remain unfulfilled. In May 2023, following a somewhat heated disagreement over the Microsoft/Activision transaction,3 the heads of both the EU and UK antitrust authorities publicly called for a cooperation agreement.4 One year later, formal discussions began.5
On October 29, 2024, the UK and the EU formally concluded negotiations on a UK-EU Competition Cooperation Agreement. The agreement now needs to be ratified, and the full text has yet to be made public. Barring unforeseen circumstances, however, the proposed Agreement is expected to enter into force in 2025.
In some respects, the proposed Agreement is unique and a clear step forward in terms of cooperation (I.). In other and perhaps more important respects, what has been disclosed about the proposal falls short of the framework for cooperation in the European Competition Network (ECN) that governed cooperation between the UK and EU pre-Brexit (II.).
I. Increased Cooperation Between the Two Sides of the Channel
Under the contemplated agreement, the UK Competition and Markets Authority (CMA) can coordinate and cooperate directly with both the European Commission (EC) and also all the national authorities of the EU Member States, e.g., the German Bundeskartellamt, the French Autorité de la Concurrence, and the Spanish Comisión Nacional de los Mercados y la Competencia. This is the EU’s first cooperation agreement that permits such a two-tier cooperation.6
As well as re-establishing an essential forum for formal discussions, the proposed framework will also be useful when less formal communication is warranted. For instance, the agreement will make it easier for the CMA to contact counterpart EU national authorities to discuss theories of harm regarding mergers that do not meet the EU merger control thresholds but which meet those of a Member State.
Accordingly, the cooperation agreement is intended to ensure that “important antitrust and merger investigations” are brought to each authorities’ attention.7 This may allow the CMA to learn details about certain – potentially smaller – transactions that have been notified to Member States’ authorities (or the EC) before it might otherwise have, given that merger filings are always voluntary in the UK and parties may therefore be able to close transactions before the CMA learns about them (although the CMA is authorized to investigate consummated transactions).
The contemplated agreement should also enable UK and EU authorities efficiently to coordinate investigations by setting out clear principles aimed at “avoiding any conflicts between jurisdictions.” This may help address issues that arose in some recent high-profile mergers where the CMA and the EC reached conflicting decisions (e.g., Microsoft/Activision Blizzard, Meta/Kustomer or Cargotec/Konecranes).8 In that respect, unless market conditions differ materially between the EU and the UK, greater cooperation is likely to lead to more convergence between the CMA’s and the EC’s decisions, which should benefit transacting parties.
II. Not a Second or Third-Generation Cooperation Agreement
The envisaged agreement will not allow the EC and CMA to share confidential information without merging parties’ consent. This contrasts with the ECN system, in which all antitrust agencies based in the EU can freely exchange information without consent. This means that, formally at least, the pre-Brexit level of cooperation has not been totally replicated. In practice, however, in merger cases and many cartel investigations (especially where there are leniency applications or settlements), businesses will commonly consent to authorities sharing information.
Further, from what is public, it appears that the proposed agreement does not contemplate investigative assistance between authorities. Such assistance can allow one antitrust authority to use its formal powers (requests for information, dawn raids, etc.) to obtain information for another. In addition, the agreement does not cover UK or EU Member State subsidies (known as State aid), which might distort competition.9
As a consequence, using the OECD’s classification, it appears that the proposed cooperation Agreement is, like most such agreements, a “first-generation” agreement, because it only allows exchanges of non-confidential information, and does not allow free exchange of confidential agreement as under a “second-generation” agreement, or envisage investigative assistance like in a “third-generation” agreement.10 The UK/EU cooperation agreement is, therefore, less ambitious than the agreement between Switzerland and the EU, which includes exchange of information obtained using coercive powers, or the Nordic agreement between Denmark, Finland, Greenland, Iceland, Norway and Sweden, which also encompasses investigative assistance.
Conclusion
Transaction parties should welcome the cooperation Agreement when it comes into force. It should ensure greater consistency of approach and outcome between the CMA and EC. Of course, this increased cooperation will also require that parties plan more extensively for the parallel review of deals or conduct and that they take consistent positions before each authority.
WilmerHale has extensive experience advising clients on national and international merger notifications and cartel and other antitrust investigations. Our attorneys have been involved in many cases involving both the European Commission and the CMA, and other national competition authorities. They have first-hand experience of strategically handling such cases. For further information, please contact one of the authors.
