Enterprise and Regulatory Reform Bill

Session 2012 - 13
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Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 3 — The CMA panel
71

47    (1)
The chair may, on behalf of the CMA, exercise the power conferred by
section 37(1), 48(1) or 64(1) of the Enterprise Act 2002 in respect of the
reference of a matter—
(a)
while a CMA group is being constituted in connection with the
reference;
5
(b)
after a CMA group has been so constituted, but before it has held its
first meeting.
      (2)
Sections 34C, 46D and 62A of the Enterprise Act 2002 have effect subject to
sub-paragraph (1).
Performance of functions of chair with respect to constitution etc of CMA group
10
48    (1)
A function of the chair that is specified in sub-paragraph (4) may, with the
consent of the CMA Board, be exercised on behalf of the chair by—
(a)
a person who is a member of both the CMA panel and the CMA
Board, or
(b)
a member of the CMA panel designated by the Secretary of State
15
(whether generally or specifically) for the purposes of this
paragraph.
      (2)
The consent referred to in sub-paragraph (1) must specify the identity of the
person by whom a function of the chair is to be exercised.
      (3)
It may be given—
20
(a)
by reference generally to functions specified in sub-paragraph (4);
(b)
by reference to specific functions, or functions of a particular
description;
(c)
by reference generally to CMA groups;
(d)
by reference to specific matters or specific CMA groups, or by
25
reference to matters or CMA groups of a particular description.
      (4)
The functions are—
(a)
the chair’s functions under paragraph 33 and under this Part of this
Schedule;
(b)
the chair’s functions by or under any other enactment in respect of
30
the constitution of a CMA group;
(c)
the chair’s functions under—
(i)
Schedule 4A to the Gas Act 1986;
(ii)
Schedule 5A to the Electricity Act 1989;
(iii)
Schedule 22 to the Energy Act 2004;
35
(iv)
Schedule 2 to the Civil Aviation Act 2012.
Independence of groups
49    (1)
In making decisions that they are required or permitted to make by virtue of
any enactment, CMA groups must act independently of the CMA Board.
      (2)
Nothing in sub-paragraph (1) prevents—
40
(a)
the CMA Board from giving information in its possession to a CMA
group, or
(b)
a CMA group giving information in its possession to the CMA
Board.

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 3 — The CMA panel
72

Casting votes
50
If a CMA group’s vote on any decision is tied, the group chair is to have a
casting vote.
Requirement to make rules of procedure for certain groups
51    (1)
The CMA Board must make rules of procedure for merger reference groups,
5
market reference groups, and special reference groups.
      (2)
Those rules are subject to any provision made by or under any enactment in
respect of the procedure of a CMA group.
      (3)
Before making rules under this paragraph, the CMA Board must consult
such persons as it considers appropriate.
10
      (4)
The CMA Board must publish rules made under this paragraph in whatever
manner it considers appropriate for bringing them to the attention of those
likely to be affected by them.
      (5)
Subject to rules made under this paragraph, and to any provision made by
or under any enactment, a CMA group of a type referred to in sub-
15
paragraph (1) may determine its own procedure.
      (6)
In this paragraph and paragraph 53—
(a)
“market reference group” means a CMA group constituted in
connection with a reference under section 131, 132 or 140A of the
Enterprise Act 2002;
20
(b)
“merger reference group” means a CMA group constituted in
connection with a reference under section 32 of the Water Industry
Act 1991 or section 22, 33, 45, or 62 of the Enterprise Act 2002;
(c)
“special reference group” means a CMA group constituted in
connection with a reference under—
25
(i)
section 11 of the Competition Act 1980;
(ii)
section 41E of the Gas Act 1986;
(iii)
section 56C of the Electricity Act 1989;
(iv)
section 12, 14 or 17K of the Water Industry Act 1991;
(v)
article 15 of the Electricity (Northern Ireland) Order 1992 (SI
30
1992/231 (NI 1));
(vi)
section 13 of, or Schedule 4A to, the Railways Act 1993;
(vii)
article 15 of the Gas (Northern Ireland) Order 1996 (SI 1996/
275 (NI 2));
(viii)
section 12 of the Transport Act 2000;
35
(ix)
section 193 of the Communications Act 2003;
(x)
article 3 of the Water Services etc (Scotland) Act 2005
(Consequential Provisions and Modifications) Order 2005.
52    (1)
In determining how to proceed in accordance with rules made for it by the
CMA Board under paragraph 51(1), and in determining its own procedure
40
under paragraph 51(5), a group must have regard to any guidance issued by
the CMA Board.
      (2)
Before issuing guidance for the purposes of this paragraph, or amending or
revoking it, the CMA Board must consult such persons as it considers
appropriate.
45

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 3 — The CMA panel
73

53    (1)
Rules made under paragraph 51 may—
(a)
make different provision for different cases or different purposes;
(b)
be varied or revoked by rules subsequently made under that
paragraph.
      (2)
They may in particular make provision—
5
(a)
for particular stages of a merger investigation, market investigation,
or special investigation to be dealt with in accordance with a
timetable and for revision of that timetable;
(b)
as to the documents and information that must be given to a relevant
group in connection with a merger investigation, market
10
investigation or special investigation;
(c)
as to the documents and information that a relevant group must give
to other persons in connection with such an investigation.
      (3)
Rules making provision as described in sub-paragraph (2)(a) or (2)(b) may,
in particular, permit or require a relevant group to disregard documents or
15
information given after a particular date.
      (4)
Rules making provision as described in sub-paragraph (2)(c) may in
particular make provision for the notification or publication of, and for
consultation about, provisional findings of a relevant group.
      (5)
Rules made under paragraph 51 may make provision as to the quorum of
20
relevant groups.
      (6)
They may make provision—
(a)
as to the extent (if any) to which persons interested or claiming to be
interested in a matter under consideration that is specified or
described in the rules are allowed—
25
(i)
to be present before or heard by a relevant group, either by
themselves or by their representatives;
(ii)
to cross-examine witnesses;
(iii)
otherwise to take part;
(b)
as to the extent (if any) to which sittings of a relevant group are to be
30
held in public;
(c)
generally in connection with any matters permitted by rules making
provision as described in paragraph (a) or (b) (including, in
particular, provision for a record of any hearings).
      (7)
Rules made under paragraph 51 may make provision for—
35
(a)
the notification or publication of information relating to merger
investigations, market investigations or special investigations;
(b)
consultation about such investigations.
      (8)
Rules made under paragraph 51 for market reference groups may make
provision as to the involvement of any public interest expert in the market
40
investigation in connection with the reference under section 140A of the
Enterprise Act 2002 in relation to which the expert was appointed.
      (9)
For the purposes of this paragraph—
“market investigation” means an investigation carried out by a market
reference group in connection with a reference under section 131, 132
45
or 140A of the Enterprise Act 2002;

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 3 — The CMA panel
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“merger investigation” means an investigation carried out by a merger
reference group in connection with a reference under section 32 of
the Water Industry Act 1991 or section 22, 33, 45, or 62 of the
Enterprise Act 2002;
“public interest expert” means a person appointed under section 141B
5
of the Enterprise Act 2002 in relation to a reference under section
140A(5) of that Act;
“relevant group” means a market investigation group, a merger
investigation group, or a special investigation group;
“special investigation” means an investigation carried out by a special
10
reference group in connection with a provision listed in paragraph
51(6)(c).
Procedure of other CMA groups
54    (1)
Subject to any special or general directions given by the Secretary of State,
and to any provision made by or under any enactment, a CMA group that is
15
not a group of a type referred to in paragraph 51(1) may determine its own
procedure.
      (2)
It may, in particular, determine its quorum, and determine—
(a)
the extent (if any) to which persons interested or claiming to be
interested in a matter under consideration are allowed—
20
(i)
to be present before or heard by it, either by themselves or by
their representatives;
(ii)
to cross-examine witnesses;
(iii)
otherwise to take part;
(b)
the extent (if any) to which its sittings are to be held in public.
25
      (3)
In determining its procedure under sub-paragraph (1), a CMA group must
have regard to any guidance issued by the CMA Board.
CMA group decision: requirement for two thirds majority
55
For the purposes of paragraphs 56 to 58, a “qualifying majority decision” is
a decision made by a CMA group which is that of at least two-thirds of the
30
members of the group.
56    (1)
This paragraph applies for the purposes of Part 3 of the Enterprise Act 2002.
      (2)
Where a decision of a CMA group under section 35(1) or 36(1) of that Act
that there is an anti-competitive outcome is not a qualifying majority
decision, it is to be treated as a decision under that section that there is not
35
an anti-competitive outcome.
      (3)
Where a decision of a CMA group under section 47 of that Act is not a
qualifying majority decision—
(a)
in the case of a decision that a relevant merger situation has been
created, it is to be treated as a decision under section 47 that no such
40
situation has been created;
(b)
in the case of a decision that the creation of a relevant merger
situation has resulted, or may be expected to result, in a substantial
lessening of competition within any market or markets in the United
Kingdom for goods and services, it is to be treated as a decision
45
under section 47 that the creation of that situation has not resulted,

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 3 — The CMA panel
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or may be expected not to result, in such a substantial lessening of
competition;
(c)
in the case of a decision that arrangements are in progress or in
contemplation which, if carried into effect, will result in the creation
of a relevant merger situation, it is to be treated as a decision under
5
section 47 that no such arrangements are in progress or in
contemplation;
(d)
in the case of a decision that the creation of such a situation as is
mentioned in paragraph (c) may be expected to result in a substantial
lessening of competition within any market or markets in the United
10
Kingdom for goods and services, it is to be treated as a decision
under section 47 that the creation of that situation may be expected
not to result in such a substantial lessening of competition.
      (4)
Where a decision of a CMA group under section 63 of that Act is not a
qualifying majority decision—
15
(a)
in the case of a decision that a special merger situation has been
created, it is to be treated as a decision under section 63 that no such
situation has been created;
(b)
in the case of a decision that arrangements are in progress or in
contemplation which, if carried into effect, will result in the creation
20
of a special merger situation, it is to be treated as a decision under
section 63 that no such arrangements are in progress or in
contemplation.
      (5)
Expressions used in this paragraph are to be construed in accordance with
Part 3 of the Enterprise Act 2002.
25
57    (1)
This paragraph applies for the purposes of Part 4 of the Enterprise Act 2002.
      (2)
Where a decision under section 134, 141 or 141A of that Act is not a
qualifying majority decision—
(a)
in the case of a decision on an ordinary reference that a feature or
combination of features of a relevant market prevents, restricts or
30
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, it is to be treated as a decision that the feature or (as the
case may be) combination of features of that relevant market does
not prevent, restrict or distort such competition;
35
(b)
in the case of a decision on a cross-market reference that a feature or
a combination of the features specified in the reference, as that
feature or combination of features 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 or acquisition
40
of any goods or services in the United Kingdom or a part of the
United Kingdom, it is to be treated as a decision that that feature or
(as the case may be) combination of features as it relates to goods or
services of those descriptions does not prevent, restrict or distort
such competition.
45
      (3)
Accordingly, a CMA group is to be treated as having decided under section
134, 141 or 141A that there is no adverse effect on competition in relation to
an ordinary reference or a cross-market reference if—
(a)
one or more than one decision of the group, in relation to the
reference, is to be treated as mentioned in sub-paragraph (2)(a) or (as
50
the case may be) (b), and

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 4 — Interpretation and transitional and transitory provision
76

(b)
there is, in relation to the reference, no other relevant decision of the
group.
      (4)
“Relevant decision”, in sub-paragraph (3)(b), means—
(a)
in relation to an ordinary reference, a decision that is not to be treated
as mentioned in sub-paragraph (2)(a), and which is that a feature or
5
combination of features of a relevant market 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;
(b)
in relation to a cross-market reference, a decision that is not to be
10
treated as mentioned in sub-paragraph (2)(b), and which is that a
feature or a combination of the features specified in the reference, as
that feature or combination of features 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 or
15
acquisition of any goods or services in the United Kingdom or a part
of the United Kingdom.
      (5)
Where a decision of a CMA group under section 141A of that Act is not a
qualifying majority decision, in the case of a decision under section 141A(4)
that the feature or combination of features in question operates or may be
20
expected to operate against the public interest, it is to be treated as a decision
under section 141A that the feature or combination of features in question
does not operate nor may be expected to operate against the public interest.
      (6)
Expressions used in this paragraph are to be construed in accordance with
Part 4 of the Enterprise Act 2002.
25
58
A decision made by a CMA group is also subject to any other provision
made by or under any enactment about decisions that are not qualifying
majority decisions.
Part 4
Interpretation and transitional and transitory provision
30
Interpretation
59    (1)
In this Schedule, “enactment” means—
(a)
an enactment contained in this or any other Act;
(b)
an enactment comprised in subordinate legislation within the
meaning of the Interpretation Act 1978;
35
(c)
an enactment contained in, or in an instrument made under, an Act
of the Scottish Parliament;
(d)
a Measure or Act of the National Assembly for Wales;
(e)
an enactment contained in, or made under, Northern Ireland
legislation within the meaning of the Interpretation Act 1978.
40
      (2)
Any reference in this Schedule to an enactment includes a reference to an
enactment whenever passed or made.
60
References in this Schedule to the commencement date are to the date on
which section 18 comes into force.

Enterprise and Regulatory Reform Bill
Schedule 4 — The Competition and Markets Authority
Part 4 — Interpretation and transitional and transitory provision
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Members of the Competition Commission
61    (1)
This paragraph applies—
(a)
in relation to any appointments under paragraph 1(1)(b) to the CMA
panel that are made before the abolition of the Competition
Commission under section 19, to any person who is a panel member
5
of the Competition Commission and whose term of office as such is
not due to expire before the abolition of the Competition
Commission under that section;
(b)
in relation to any other appointment under paragraph 1(1)(b) to the
CMA panel, to a person who was a panel member of the Competition
10
Commission immediately prior to its abolition under section 19.
      (2)
A person to whom this paragraph applies may be appointed under
paragraph 1(1)(b) as a member of the CMA panel.
      (3)
But the terms of the person’s appointment as a member of the CMA panel
must not be such that the sum of the period of his or her office as a member
15
of the CMA panel, and of the period of his or her office as a panel member
of the Competition Commission, exceeds eight years.
      (4)
Paragraph 4(1) applies for the purposes of the person’s re-appointment as a
member of the CMA panel as it does for the purposes of the re-appointment
of a CMA panel member to whom this paragraph does not apply.
20
62
Except as provided for by paragraph 61, a person who holds or has held
office as a panel member of the Competition Commission at any time prior
to its abolition may not be appointed under paragraph 1(1)(b) as a member
of the CMA panel.
63
References in paragraphs 61 and 62 to a panel member of the Competition
25
Commission are to a person appointed as a member of the Competition
Commission of a kind mentioned in paragraph 2(3) of Schedule 7 to the
Competition Act 1998.
Financial years of the CMA
64    (1)
If the duration of the period beginning with the commencement date and
30
ending with the next 31 March is six months or more, the first financial year
of the CMA is that period.
      (2)
But if the duration of that period is less than six months, the first financial
year of the CMA is the period beginning with the commencement date, and
ending with the 31 March in the year following the next 31 March after the
35
commencement date.
      (3)
The subsequent financial years of the CMA are each successive period of 12
months.
First annual plan of the CMA
65    (1)
The CMA is to publish its first annual plan within the period of three months
40
beginning with the commencement date.
      (2)
The first annual plan is to relate to the period beginning with the date of
publication of the plan, and ending with the date on which the CMA’s first
financial year ends.