Combatting And Mitigating The Effects Of A Public Health Emergency
In the latest response to the COVID-19 pandemic, the UK Government has introduced a change to competition law to grant a new power of intervention in relation to mergers and takeovers of British businesses that are identified as crucial to the response to a public health emergency.
From pharmaceutical businesses involved in vaccine R&D or the production of swab kits/antibody tests, to technology businesses supporting the track and trace service, the various enterprises involved in essential supply chains (including food) and companies involved in the manufacturing/distribution of PPE, the scope of affected businesses is far-reaching.
The Enterprise Act 2002, as amended, already gives the Secretary of State the power to intervene and/or impose conditions on a takeover/merger of a business in order to protect the "public interest", namely: (i) national security; (ii) financial stability; and (iii) media plurality. Maintaining the UK's ability to respond in the event of an infectious disease outbreak or other threat to the population's health has now been added to this list of "specified public interest considerations".
This development seeks, post-COVID-19 and post-Brexit, to ensure that the UK remains open and attractive for business and foreign investment, but not subject to perceived exploitation, and brings UK law in step with that of a number of our continental neighbours.
Enhanced Protection For The Technology Sector
The Government has further announced plans to lower the threshold (currently where the target business has greater than £70 million UK turnover) at which the Secretary of State may intervene or scrutinise completed or potential mergers or takeovers in three subsectors of technology crucial to protecting national security: (i) AI; (ii) cryptographic authentication technology; and (iii) advanced materials. Formal legislation is pending, and the Government will be seeking to strike a balance between developing an effective 'exit strategy' to rebuild the economy by promoting and developing London as the European HQ of fintech and technological innovation (on the one hand), and protecting public security (on the other hand).