Antitrust, Regulation & Foreign Investment Q2 newsletter

Welcome to our second quarterly newsletter of 2025, where the Ashurst Antitrust, Regulatory and Trade Team recaps some of the key developments of Q2 2025.

This edition highlights:

• The majority of the consumer law provisions in the UK Digital Markets, Competition and Consumers Act (DMCC Act) entered into force on 6 April 2025. The UK Competition and Markets Authority (CMA) now has the power to directly enforce consumer law and to impose fines of up to 10% of a company's global turnover, meaning a significant increase in enforcement risk for businesses. The DMCC Act has also introduced new consumer protections, in particular in relation to fake reviews and drip pricing.
• Competition authorities have shown an increasing interest in labour markets in recent years. The CMA and the European Commission imposed their first-ever fines for labour markets cases in March and June 2025 respectively. The European Commission investigation related to a "no-poach" agreement and the CMA investigation focused on the exchange of competitively sensitive information relating to wages. As this is a relatively nascent area of enforcement, companies should consider whether they have appropriate guidance in place for their Recruitment and HR teams, teams responsible for negotiating documents which may contain no-poach provisions such as joint venture and cooperation agreements, and teams procuring freelance labour.
• Under the new Australian merger control framework, merger clearance will be both mandatory and suspensory for transactions that exceed specified monetary thresholds. The Australian Competition and Consumer Commission is the primary decision-maker. The new regime will commence on 1 January 2026, but has been available on a voluntary basis since 1 July 2025. Following extensive consultation by Treasury, the thresholds were published on 30 June 2025, only one day before companies can start voluntarily notifying mergers to the ACCC under the new regime (although the date of the instrument is 24 June 2025). See our Australian merger control hub for a key resources and developments.

Consumer law

1. New era for consumer enforcement in the UK

The UK DMCC Act received Royal Assent on 24 May 2024, introducing widespread changes to competition law and consumer law enforcement in the UK, as well as a new regime regulating designated Big Tech companies.

The majority of the provisions relating to consumer protection came into force on 6 April 2025, including the CMA's new powers to directly enforce consumer law and impose fines of up to 10% of a company's global turnover which significantly increase enforcement risks for businesses. The DMCC Act introduces important new protections for consumers, in particular in relation to fake reviews and drip pricing, as well as amendments to existing protections. New requirements on subscription contracts are expected to come into force in Spring 2026.

The CMA has also published updated guidance on unfair commercial practices, including the new protections on fake reviews, as well as a document outlining its approach to the new regime. See here for our overview.

2. Italy and Australia offer glimpse of what to expect from new UK consumer laws

In this episode, Fiona Garside is joined by partners Christopher Eberhardt, Melissa Fraser and Gabriele Accardo to discuss consumer law issues in the UK, Australia and the EU. Chris explains how the UK’s new regime represents a major change to the way consumer law is enforced, including potentially significant penalties for breaches (up to a maximum of 10% of the company's global turnover) as well as redress requirements and other directions or remedies.

Gabriele and Melissa explain how consumer protection enforcement works in Italy and Australia. They outline how prudent organisations approach compliance, including setting a culture from senior management downwards, and they share the regulatory priorities and trends that are shaping the agenda in their respective countries. Together the four colleagues reflect on what UK organisations can learn from consumer law enforcement in other jurisdictions.

Listen here.

3. Commitments in the fashion industry: the Italian Dior case

The Italian competition authority has accepted commitments from companies in the Dior Group in relation to certain alleged unfair commercial practices relating to the promotion and sale of clothes and accessories. Dior's commitments largely reflect the requirements of the Corporate Sustainability Due Diligence Directive (Directive 2024/1760) (CSDDD) which EU Member States are required to have implemented into national law by July 2026, with the requirements coming into force by July 2027.

The Italian competition authority's investigation focused on ethical and social responsibility statements featured on Dior's website and in its corporate codes, which were considered to be potentially misleading. See here for our overview.

Antitrust

1. CMA informal opinion on ESG supply chain initiative: important lessons

On 31 March 2025, the CMA published its third informal opinion under its Green Agreements Guidance (see our October 2023 update) in which it considered the Builders Merchants Federation's (BMF) proposal to recommend that its members use a single preferred platform containing data on suppliers' ESG credentials. The CMA concluded that the proposed initiative was unlikely to appreciably affect competition and, in the alternative, was reasonably likely to satisfy the exemption criteria.

The opinion underscores the importance of carefully evaluating any collaborative sustainability initiatives in light of the CMA's Green Agreements Guidance and the benefit of engagement with the CMA. Certain features of BMF's proposal meant that it did not fall neatly within the bucket of agreements that are unlikely to infringe competition law (e.g. standardisation agreements) and the CMA therefore individually assessed the potential impact of the proposed arrangements on competition. See here for our overview.

2. Does the essential facilities doctrine stand after the Android Auto ruling?

On 25 February 2025, the Court of Justice of the European Union (ECJ) delivered its much-anticipated judgment in the Android Auto case (C-233/23). The case concerned whether a dominant platform's refusal to ensure interoperability between its platform and a third-party app can constitute an abuse of dominance.

While the judgment has important implications for dominant firms in the digital economy, the ECJ has not overturned the Bronner line of case law. The Essential Facilities Doctrine and indispensability criteria still apply where a dominant firm has developed an input exclusively for its business needs. This is relevant for many situations across a range of industries, including in relation to intellectual property rights, vertically integrated services, data sets, and closed digital ecosystems developed by dominant companies. Where dominant firms choose to grant access to some players (e.g. through a licence to use an intellectual property right), they should however be wary that the Bronner protection may not apply and there would therefore be a lower standard of proof to establish an abuse of dominance. See here for further details.

3. CJEU sharpens stance on active sales bans in exclusive distribution

On 8 May 2025, in Case C-581/23 Beevers Kaas, the ECJ held that parties to an exclusive distribution agreement cannot rely on the mere absence of active sales by non-exclusive distributors in order to demonstrate that an exclusive distribution system fulfils the requirements of Article 4(b)(i) of the Vertical Block Exemption Regulation (Regulation 330/2010) (the 2010 VBER).

The Beevers Kaas judgment confirms that, in order to satisfy the criteria under Article 4(b)(i) of the 2010 VBER, the supplier is required to protect the exclusive distributor from active sales by other resellers of that supplier (referred to as the "parallel imposition requirement"). To demonstrate the existence of a prohibition on active sales by non-exclusive distributors, there must be an agreement between the parties (such as evidence of the supplier's invitation and the buyers' acquiescence to a restriction on active sales). The mere absence of sales by non-exclusive distributors into the exclusive territory is not sufficient. See here for our overview.

4. First EU and UK fines for labour markets antitrust infringements

In recent years, competition authorities have shown an increasing interest in potential competition issues in labour markets. This is now producing results, with the UK CMA and European Commission having both issued their first-ever fines in labour markets cases in March and June 2025 respectively. The European Commission investigation related to a "no-poach" agreement and the CMA investigation focused on the exchange of competitively sensitive information relating to wages.

These cases confirm that wage fixing and no-poach agreements are likely to be "by object" infringements, meaning the regulator does not have to prove that the agreement actually had an anticompetitive effect. Companies should consider whether they have appropriate guidance in place for their Recruitment and HR teams, teams responsible for negotiating documents which may contain no-poach provisions such as joint venture and cooperation agreements, and teams procuring freelance labour.

See our June 2025 update.

State aid and subsidy control

1. Consultation outcome: refining the UK subsidy control regime

Subsidy control in the UK is governed by the Subsidy Control Act 2022. This enables the award of financial assistance by way of subsidies from public authorities while minimising distortion to competition. In November 2024, the Department for Business and Trade (DBT) issued a consultation on two key aspects of the subsidy control regime (thresholds for referral to the CMA and streamlined routes) for parties in the UK that are interested in subsidy control. On 7 April 2025, DBT published the UK government's response and decisions following consultation.

See our April 2025 update.

2. New avenue to challenge State aid decisions on environmental grounds

On 12 May 2025, the European Commission adopted new State aid rules allowing non-governmental organisations (NGOs) to request the review of certain State aid decisions for compliance with EU environmental law. These changes aim to bring EU State aid rules in line with the obligations under the Aarhus Convention on access to justice in environmental matters.

NGOs are now able to request that the European Commission reviews State aid decisions if they are independent, non-profit, and active on environmental matters (based on supporting evidence). Requests for reviews can concern final State aid decisions which declare aid compatible with the internal market (including conditional decisions). The review is not available for positive decisions concerning social aid, aid to make good damage from natural disasters or exceptional occurrences and aid to remedy a serious disturbance in a national economy.

The introduction of this new internal review mechanism marks a shift in how environmental compliance intersects with State aid approval processes. While rooted in the broader ambition of aligning EU law with the Aarhus Convention, these changes introduce new legal uncertainties and compliance challenges, including an increased burden on Member States and aid beneficiaries, additional risks for aided projects and uncertainty around the concept of "indissoluble link".

See our overview here.

Tariffs and sanctions

1. Overview of the EU's 17th sanctions package

On 20 May 2025, the Council of the EU adopted its 17th package of sanctions against Russia. This latest round of restrictive measures is characterised as a significant escalation in the EU’s efforts to curtail Russia’s military capabilities and resources.

The EU has intensified restrictions on Russia’s “shadow fleet,” doubling the number of vessels subject to port access bans and service prohibitions. To ensure effectiveness, financial sanctions have been imposed on actors supporting the shadow fleet including certain UAE, Turkish and Hong Kong entities and on a major Russian oil company and a Russian oil shipping firm. The EU has also extended financial sanctions to industrial enablers (also third country enablers) supplying machine tools to the Russian military and industrial sector and to certain entities in China, Belarus and Israel for their provision of critical components to the Russian military. See here for our overview.

2. Key takeaways for businesses on how to navigate the US tariff measures

Amid escalating trade disruptions resulting from the latest U.S. tariff policies and global reactions, businesses are facing heightened uncertainty across global markets. The fast-evolving dynamics of the U.S. measures and responses from affected trading partners make it increasingly difficult for businesses to navigate the impact of these policies on cross-border operations. In our recent Ashurst webinar, our international trade and disputes teams unpacked the key trade and commercial contract implications of these measures and shared actionable strategies for managing risk in cross-border operations. See here for our summary of the key implications and recommended actions as discussed in our recent webinar. The recording of the webinar is also available here.

3. Key takeaways or businesses on how to navigate the US tariff measures and optimal approach

The new U.S. administration’s tariff measures have disrupted global businesses, but ongoing policy uncertainty is the main driver of today’s volatile trade environment. With the suspension of the expansive ‘reciprocal’ tariff regime set to expire in early July and President Trump renewing announcements for potential new measures, global markets remain on edge. Countermeasures and significant commercial consequences are becoming more likely, while emerging bilateral deals could reshape market conditions. The rapidly shifting trade landscape is making it harder for businesses to manage cross-border operations.

In our latest Ashurst webinar, our international trade and disputes teams explored the key legal and commercial impacts of these developments and shared practical strategies for mitigating risk. See here for a summary of the main insights and recommendations. If you missed the session, the full recording is available here.

Other developments

1. CMA investigations underway in UK digital markets shake up

In this episode, we cast the spotlight on the CMA’s early investigations under the DMCC Act. The UK’s new digital regime came into force in January this year, introducing widespread changes to competition law, the enforcement of consumer law and a regime regulating designated digital companies in the UK. Under the DMCC Act, the CMA has the power to designate companies with “strategic market status” (SMS), impose tailored conduct requirements, and make pro-competition interventions.

Fiona Garside, Christopher Eberhardt and Isabella Hunt discuss the CMA’s first SMS investigations into Google’s search and advertising services, and Apple’s and Google’s mobile ecosystems. The conversation also highlights the activities under investigation, emphasises the importance of third-party input to shape regulatory outcomes, and draws comparisons with the EU’s Digital Markets Act. There’s also discussion of how the CMA’s “4P’s framework” (pace, predictability, proportionality, and process) might apply and speculation about future investigations into the UK’s highly concentrated cloud services market. Listen here.

2. New EU FDI Regulation: striking the right balance?

On 8 May 2025, the European Parliament (EP) adopted an amended version of the European Commission's proposal for a new regulation on the screening of foreign investments (FDI) into the European Union (the Draft Regulation) to repeal and replace Regulation (EU) 2019/452 (2019 Regulation).

On 11 June 2025, the Council of the European Union approved its own amended version of the European Commission's proposal. The two new versions of the Draft Regulation take different approaches to substantive and procedural matters. However, the proposed rules in both versions aim to enhance effectiveness, promote harmonisation across Member States and reflect evolving concerns over strategic dependencies and economic security, at least compared to the 2019 Regulation. See our June 2025 update.

3. Competition and consumer policy in the Australian Government's second term

The re-elected Labor Government has an ambitious and extensive agenda to develop competition and consumer policy. It now also has a decisive majority in the House of Representatives and a likely more favourable Senate composition, enhancing its ability to pursue legislative reforms.

The Government had already announced changes targeting cost of living and productivity reforms, as well as enhancements to the Australian Consumer Law, revitalising national competition policy and ongoing national energy regulation reform. We expect it will proactively pursue its reform agenda. See our overview here.

While the framework of the new merger control regime is enshrined in legislation, important aspects of the regime will be set by way of Determination by the Treasurer, including the all-important thresholds for determining whether an acquisition is notifiable. We expect the Government will finalise the draft Determination in the coming months following a consultation period prior to the election. We also expect the Government will be eager to closely monitor the implementation of the new regime to ensure that the thresholds have been set at a level that achieves the Government's policy objectives without creating undue delay in the new system (for example, if the thresholds capture significantly more mergers than anticipated). See our Australian merger hub here which pulls together key resources and updates.