Enterprise and Regulatory Reform Bill

Session 2012 - 13
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Other Bills before Parliament

Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
20

(3)
The CMA may revise its statement of policy and, where it does so, it
shall publish the revised statement.
(4)
The CMA shall consult the Secretary of State and such other persons as
it considers appropriate when preparing or revising its statement of
policy.
5
(5)
A statement or revised statement of policy may not be published under
this section unless the Secretary of State approves the statement.
(6)
In this section, “interim measure” has the same meaning as in section
94A.”
(2)
In section 120 of that Act (review of decisions under Part 3), in subsection (2)(a),
10
for “section 110(1) or (3)” substitute “section 94A(1) or 110(1) or (3)”.
(3)
In section 124 of that Act (orders and regulations under Part 3)—
(a)
in subsection (4), before “or 102” insert “, 94A(6)”, and
(b)
in subsection (5), before “114(4) or (6),” insert “94A(3) or (6),”.
Time-limits
15
24
Time-limits etc: mergers
(1)
In section 103 of the 2002 Act (duty of expedition in relation to references), in
subsection (1), for the words from the beginning to “the OFT” substitute “In
making any decision for the purposes of its functions of making and
determining references under this Part, the CMA”.
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(2)
Schedule 8 (which makes provision about time-limits in relation to the mergers
reference regime under Part 3 of the 2002 Act) has effect.
Chapter 2
Markets
Cross-market investigations
25
25
Power of CMA to make cross-market references
(1)
Section 131 of the 2002 Act (power to make market investigation references) is
amended as follows.
(2)
After subsection (2) insert—
“(2A)
In a case where the feature or each of the features concerned falls within
30
subsection (2)(b) or (c), a reference under subsection (1) may be made
in relation to more than one market in the United Kingdom for goods
or services.”
(3)
In subsection (4)(a), for “section 156(1)” substitute “section 156(A1) or (1)”.
(4)
In subsection (6)—
35
(a)
before the definition of “market in the United Kingdom” insert—
““cross-market reference” means a reference under this
section which falls within subsection (2A) or a reference

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
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under section 132 which falls within subsection (3A) of
that section (and see section 140A);”, and
(b)
after the definition of “market investigation reference” insert—
““ordinary reference” means a reference under this section
or section 132 which is not a cross-market reference (and
5
see section 140A);”.
26
Ministerial power to make cross-market references
(1)
Section 132 of the 2002 Act (ministerial power to make market investigation
references) is amended as follows.
(2)
After subsection (3) insert—
10
“(3A)
In a case where the feature or each of the features concerned falls within
section 131(2)(b) or (c), a reference under subsection (3) may be made in
relation to more than one market in the United Kingdom for goods or
services.”
(3)
In subsection (4), for “section 156(1)” substitute “section 156(A1) or (1)”.
15
(4)
Schedule 9 (which contains amendments of Part 4 of the 2002 Act which are
consequential on section 25 and this section) has effect.
Public interest interventions
27
Public interest interventions in markets investigations
(1)
Part 4 of the 2002 Act (market investigations) is amended as follows.
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(2)
Section 139 (power of Secretary of State to give public interest intervention
notices) is amended as follows.
(3)
For subsection (1) substitute—
“(A1)
This section applies where the CMA has published a market study
notice in relation to a matter.
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(1)
The Secretary of State may, within the permitted period, give a notice
to the CMA if the Secretary of State believes that it is or may be the case
that one or more than one public interest consideration is relevant to the
matter.
(1A)
For the purposes of subsection (1), the permitted period is the period
30
beginning with the publication of the market study notice and ending
with—
(a)
the acceptance by the CMA of an undertaking under section 154
instead of the making of a reference under section 131 in
relation to the matter;
35
(b)
the publication of notice of the fact that the CMA has otherwise
decided not to make such a reference in relation to the matter;
(c)
the making of such a reference in relation to the matter; or
(d)
in a case where the period permitted by section 131B for the
preparation and publication by the CMA of the market study
40
report in relation to the matter has expired and no such report
has been prepared or published, the end of that period.”

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
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(4)
In subsection (2)—
(a)
in the words before paragraph (a), after “may” insert “, within the
permitted period,”,
(b)
in paragraph (a)(i), after “131” insert “in relation to the matter”, and
(c)
in paragraph (c), for “case” (in the second place where it occurs)
5
substitute “proposal to accept the undertaking”.
(5)
After subsection (2) insert—
“(2A)
For the purposes of subsection (2), the permitted period is—
(a)
where the CMA publishes a notice under section 155(1), the
period within which representations may be made in relation to
10
the proposed undertaking (as to which, see section 155(2)(f));
(b)
where the CMA publishes a notice under section 155(4), the
period within which representations may be made in relation to
the proposed modifications to the proposed undertaking (as to
which, see section 155(5)(c)).”
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(6)
For subsection (4) substitute—
“(4)
No more than one intervention notice shall be given under subsection
(1) in relation to the same matter.
(4A)
An intervention notice shall not be given under subsection (2) in
relation to a proposal to accept an undertaking if the proposal relates to
20
a matter in respect of which an intervention notice under subsection (1)
has already been given.
(4B)
No more than one intervention notice shall be given under subsection
(2) in relation to the same proposed undertaking or in relation to
proposed undertakings which do not differ from each other in any
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material respect.”
(7)
After subsection (4B) insert—
“(4C)
In subsection (1A)(a), the reference to the acceptance of an undertaking
shall, in a case where the CMA has accepted a group of undertakings
under section 154, be treated as a reference to the acceptance of the last
30
undertaking in the group; but undertakings which vary, supersede or
revoke earlier undertakings shall be disregarded for the purposes of
subsection (1A)(a).”
(8)
After section 140 insert—
“140A
Section 139(1) intervention notices: Secretary of State’s duty to refer
35
(1)
This section applies where—
(a)
the CMA has prepared a market study report in relation to a
matter within the period permitted by section 131B(4);
(b)
an intervention notice under section 139(1) is in force in relation
to the matter at the time when the CMA would (but for this
40
section) be required to publish the report; and
(c)
the report contains the decision of the CMA that it should make
an ordinary reference or a cross-market reference in relation to
the matter under section 131.
(2)
The CMA—
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Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
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(a)
shall not exercise the power under section 131 to refer the
matter;
(b)
shall not publish the market study report under section 131B(4);
and
(c)
shall instead, within the period mentioned in section 131B(4),
5
give the report to the Secretary of State.
(3)
The Secretary of State shall decide whether any public interest
consideration which was mentioned in the intervention notice is
relevant to the matter in question.
(4)
Where the Secretary of State decides that there is no relevant public
10
interest consideration—
(a)
the Secretary of State shall (in accordance with the CMA’s
decision contained in the market study report concerned) make
a reference in relation to the matter to the chair of the CMA for
the constitution of a group under Schedule 4 to the Enterprise
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and Regulatory Reform Act 2012; and
(b)
the reference is to be treated for the purposes of this Part as if it
were an ordinary reference or (as the case may be) a cross-
market reference made under section 131 in accordance with
the requirements imposed by section 131B.
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(5)
Where the Secretary of State decides that there is one or more than one
relevant public interest consideration, the Secretary of State shall (in
accordance with the CMA’s decision contained in the market study
report) make a reference in relation to the matter to the chair of the
CMA for the constitution of a group under Schedule 4 to the Enterprise
25
and Regulatory Reform Act 2012.
(6)
The Secretary of State shall specify in a reference made under
subsection (5)—
(a)
the relevant public interest consideration or considerations; and
(b)
whether the reference is a restricted PI reference or a full PI
30
reference (as to which, see sections 141 and 141A respectively).
(7)
Where the Secretary of State makes a full PI reference under subsection
(5), the reference shall also specify whether the Secretary of State
proposes to appoint a public interest expert under section 141B.
(8)
For the purposes of this Part, a reference under subsection (5) is to be
35
treated—
(a)
in a case where the market study report concerned contains the
decision of the CMA that it should make an ordinary reference,
as an ordinary reference;
(b)
in a case where the report contains the decision of the CMA that
40
it should make a cross-market reference, as a cross-market
reference.
(9)
The Secretary of State shall publish the market study report concerned
at the same time as the Secretary of State makes a reference under this
section.
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(10)
In this Part—

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
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“full PI reference” means a reference made by the Secretary of
State under subsection (5) which specifies that it is a full PI
reference;
“restricted PI reference” means a reference made by the Secretary
of State under subsection (5) which specifies that it is a restricted
5
PI reference.”
(9)
After section 141 insert—
“141A
Full PI references: questions to be decided by CMA
(1)
This section applies where the Secretary of State makes a full PI
reference.
10
(2)
The CMA shall, on an ordinary reference, decide whether any feature,
or combination of features, of each relevant market (within the
meaning given by section 134(3)) prevents, restricts or distorts
competition in connection with the supply or acquisition of any goods
or services in the United Kingdom or a part of the United Kingdom.
15
(3)
The CMA shall, on a cross-market reference, decide in relation to each
feature and each combination of the features specified in the reference,
whether the feature or combination of features, as it relates to goods or
services of one or more than one of the descriptions so specified,
prevents, restricts or distorts competition in connection with the supply
20
or acquisition of any goods or services in the United Kingdom or a part
of the United Kingdom.
(4)
The CMA shall, if it has decided that there is an adverse effect on
competition, decide whether, taking account only of any adverse effect
on competition and the admissible public interest consideration or
25
considerations concerned, any feature or combination of features
which gave rise to an adverse effect on competition operates or may be
expected to operate against the public interest.
(5)
The CMA shall, if it has decided that any such feature or combination
of features operates or may be expected to operate against the public
30
interest, also decide separately the following additional questions—
(a)
whether action should be taken by the Secretary of State under
section 147A for the purpose of remedying, mitigating or
preventing any of the effects adverse to the public interest
concerned;
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(b)
whether the CMA should recommend the taking of other action
by the Secretary of State, or action by persons other than itself
and the Secretary of State, for the purpose of remedying,
mitigating or preventing any of the effects adverse to the public
interest concerned; and
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(c)
in either case, if action should be taken, what action should be
taken and what is to be remedied, mitigated or prevented.
(6)
The CMA shall, if it has decided that there is an adverse effect on
competition, also decide separately the following questions (on the
assumption that it is proceeding as mentioned in section 148A(2))—
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(a)
whether action should be taken by it under section 138 for the
purpose of remedying, mitigating or preventing the adverse
effect on competition concerned or any detrimental effect on

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
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customers so far as it has resulted from, or may be expected to
result from, the adverse effect on competition;
(b)
whether the CMA should recommend the taking of action by
other persons for the purpose of remedying, mitigating or
preventing the adverse effect on competition concerned or any
5
detrimental effect on customers so far as it has resulted from, or
may be expected to result from, the adverse effect on
competition; and
(c)
in either case, if action should be taken, what action should be
taken and what is to be remedied, mitigated or prevented.
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(7)
In a case where the Secretary of State has appointed a public interest
expert under section 141B in relation to a full PI reference, the CMA
shall, in deciding the questions mentioned in subsections (4) and (5),
have regard, in particular, to the views of the expert.
(8)
In deciding the questions mentioned in subsection (5), the CMA shall,
15
in particular, have regard to—
(a)
the need to achieve as comprehensive a solution as is reasonable
and practicable to the effects adverse to the public interest
concerned; and
(b)
any detrimental effects on customers so far as resulting from
20
those effects.
(9)
In deciding the questions mentioned in subsection (6), the CMA shall,
in particular, have regard to—
(a)
the need to achieve as comprehensive a solution as is reasonable
and practicable to the adverse effect on competition concerned;
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and
(b)
any detrimental effects on customers so far as resulting from it.
(10)
In deciding the questions mentioned in subsections (5) and (6), the
CMA may, in particular, have regard to the effect of any action on any
relevant customer benefits of the feature or features of the market or
30
markets concerned.
(11)
In this section, “admissible public interest consideration” means any
public interest consideration specified in the reference concerned and
which the CMA is not under a duty to disregard.
141B
Full PI references: power of Secretary of State to appoint expert
35
(1)
This section applies where the Secretary of State makes a full PI
reference.
(2)
The Secretary of State may appoint one or more than one person to
advise the CMA on the questions mentioned in subsections (4) and (5)
of section 141A in relation to the reference.
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(3)
A person so appointed shall be a person who appears to the Secretary
of State to have particular knowledge of, or expertise in, matters
relating to a public interest consideration specified in the reference.
(4)
Each person so appointed is referred to in this Part as a “public interest
expert”.
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Chapter 2 — Markets
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(5)
The terms and conditions of appointment of a public interest expert
(including, in particular, as to remuneration) are to be determined by
the Secretary of State.
(6)
Any appointment of a public interest expert under this section shall be
made within the period of 2 months beginning with the date of the
5
reference concerned.
(7)
Before appointing a public interest expert the Secretary of State shall
consult the chair of the CMA.”
(10)
Schedule 10 (which contains amendments of Part 4 of the 2002 Act which are
consequential on or otherwise related to this section) has effect.
10
Investigation powers
28
Investigation powers: markets
(1)
Section 174 of the 2002 Act (investigation powers) is amended as follows.
(2)
For subsections (1) and (2) substitute—
“(1)
For the purposes of this section, the permitted purposes are the
15
following—
(a)
assisting the CMA in carrying out its functions under section 5
in relation to a matter in a case where it has published a market
study notice;
(b)
assisting the CMA in carrying out any functions, including
20
enforcement functions, exercisable by it under or by virtue of
this Part in connection with a matter that is or has been the
subject of a reference under section 131 or 132 or possible
reference under section 131;
(c)
assisting the CMA or the Secretary of State in carrying out any
25
functions, including enforcement functions, of the CMA or (as
the case may be) the Secretary of State under or by virtue of this
Part in connection with a matter that is or has been the subject
of a reference under section 140A(5) or possible reference under
section 140A(4) or (5).
30
(2)
The CMA may exercise any of the powers in subsections (3) to (5) for a
permitted purpose.”
(3)
In subsection (6), after “shall” insert “—
(a)
specify the permitted purpose for which the notice is given,
including the function or functions in question; and
35
(b)
”.
(4)
After subsection (6) insert—
“(6A)
The CMA or any person nominated by it for the purpose may, for a
permitted purpose, take evidence on oath and for that purpose may
administer oaths.”
40
(5)
In subsection (7), for “the purpose mentioned in subsection (1)” substitute “a
permitted purpose”.