What do competition lawyers do?

Competition lawyers may advise on whether a deal could be deemed anti-competitive and thus blocked by a regulator, which would involve analysing whether that deal might result in a “substantial lessening of competition” (or even a monopoly) in the relevant jurisdiction(s). 

This can involve a detailed analysis of many factors, including: the deal parties’ respective market shares; their principle activities; the use, purpose, design and composition of their products and services; the ingredients or materials from which their products are derived; whether one party’s products can substitute or complement the other’s; the prices they charge; and the locations from which the parties operate. Competition lawyers will also need to assess their findings in light of any applicable competition-related regulations in the relevant jurisdiction(s). 

Monopoly / Oligopoly: where a business (or a small group of businesses in the case of an oligopoly) owns such a large share of its market that it has total (or substantial) control over trade within that market. This market dominance can make it difficult for competitors to emerge, which can enable monopoly holders/oligopoly members to charge inflated prices and leverage their power against suppliers and other stakeholders. For this reason, monopolies/oligopolies are heavily regulated and deals that are likely to result in the creation of a monopoly or oligopoly (e.g. a deal involving a merger of two major players in an industry) may be blocked by regulators on the basis that the outcome would be anti-competitive. However, not all monopolies are illegal. For example, businesses might legitimately acquire a monopoly (or become part of an oligopoly) by developing a superior product or capitalising upon some other unique selling point. As long as they don’t gain their market share through anti-competitive practices, this would likely be ok.

Where competition issues do arise, competition lawyers may need to help their clients sell to regulators why the proposed transaction will not result in a substantial lessening of competition, or guide the prospective buyer through the process of meeting any conditions set by the regulator that must be fulfilled before the deal will be approved. Such conditions might require the buyer to, for example, “divest” (i.e. sell) parts of its existing business or purchase fewer of the seller’s assets. Note that deals can collapse where a competition team’s analysis clearly indicates that a deal will be blocked by competition authorities. 

Competition lawyers may also advise on contentious matters involving, for example, disputes around state aid, assertions that companies have formed cartels, claims that companies have entered into other allegedly anti-competitive agreements, or disputes with regulators about alleged anti-competitive behaviour (e.g. “gun jumping” during an M&A process).

State aid: this refers to circumstances under which a government gives some form of advantage (usually financial) on a selective basis to domestic companies. This type of assistance is banned across the EU (subject to limited exceptions), as it has the potential to distort competition and affect trade between member states.

Cartel: an association of firms, manufacturers or suppliers engaged in a formal agreement to fix prices in particular territories and consequently restrict competition.

Gun jumping: where parties to a proposed merger or acquisition start to act as if the transaction has taken place (e.g. by implementing certain changes or taking certain actions) before receiving formal confirmation from the relevant competition authorities that the transaction can go ahead (i.e. they “jump the gun”).

Why do trainees enjoy competition seats?

As competition law applies to all industries, a seat in a firm’s Competition team can give you exposure to a broad range of clients and sectors, which can provide a varied and interesting experience. Moreover, Competition lawyers need to understand their clients’ products and services in detail, including how those products and services fit into the wider market, so a seat in a Competition team can be more commercially-focused than seats in some other teams. 

A seat in Competition can also involve more “academic” work than your typical transactional seat, as a result of the legal analysis (at both the UK and EU level) that Competition lawyers must apply to clients’ businesses and markets. In addition, politicians often use merger control mechanisms to intervene in merger proposals that are politically sensitive or unpopular with the public, so the strong political aspect that can underpin competition-related matters may also appeal.

Finally, if you enjoy persuasive writing, you may well enjoy a Competition seat. A merger filing often involves working with a myriad of economists and other advisers to construct a narrative about why a merger will not have an adverse impact upon competition in the market. Although you may be less involved in the material drafting at a junior level, you will need to be well versed in this narrative as it informs every step of the merger control process. 

Note that we cover the role of competition lawyers in the context of a transaction in our A law firm's role on a transaction case study. 

In addition, our M&A and private equity courses include explanations of some of the issues and processes that transactional lawyers often need to advise on.