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Enterprise and Regulatory Reform Bill (HC Bill 7)

Enterprise and Regulatory Reform BillPage 170

(4) In subsection (2), for “a market investigation” substitute “an ordinary”.

(5) After subsection (2) insert—

(2A) For the purposes of this Part, in relation to a cross-market reference,
there is an adverse effect on competition if a feature or a combination
5of 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 of
any goods or services in the United Kingdom or a part of the United
10Kingdom.

(6) In subsection (5)(a), after “the market” insert “or markets”.

(7) In subsection (7), after “the market” insert “or markets”.

(8) In subsection (8)(a)(i), after “the market” insert “or markets”.

4 In section 138 (duty to remedy adverse effects), in subsection (5), after “the
15market” insert “or markets”.

5 (1) Section 141 (questions to be decided where intervention notice under section
139(1) is in force) is amended as follows.

(2) In subsection (2), after “shall” insert “, on an ordinary reference,”.

(3) After subsection (2) insert—

(2A) 20The 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
25with the supply or acquisition of any goods or services in the United
Kingdom or a part of the United Kingdom.

(4) In subsection (6), after “the market” insert “or markets”.

6 In section 147 (remedial action by the Secretary of State), in subsection (5),
after “the market” insert “or markets”.

7 30In section 154 (undertakings in lieu of references), in subsection (4), after “the
market” insert “or markets”.

8 (1) Section 156 (effect of undertakings under section 154) is amended as follows.

(2) Before subsection (1) insert—

(A1) No market investigation reference shall be made by the CMA or the
35appropriate Minister in relation to any feature, or combination of
features, of a market in the United Kingdom for goods or services
if—

(a) the CMA has accepted an undertaking or group of
undertakings under section 154 within the previous 12
40months;

(b) the feature or combination of features to which the
undertaking or group of undertakings relates is the same as
the feature or combination of features to which the reference
would relate; and

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(c) the goods or services to which the undertaking or group of
undertakings relates are of the same description as the goods
or services to which the reference would relate.

(3) In subsection (1)—

(a) 5in the words before paragraph (a), for “market investigation”
substitute “ordinary”,

(b) in paragraph (a), after “has” insert “, instead of making an ordinary
reference,”, and

(c) in paragraph (b), for “the feature, or combination of features, relates”
10substitute “the reference would relate”.

(4) In subsection (2), for “Subsection (1) does” substitute “Subsections (A1) and
(1) do”.

9 (1) Section 184 (index of defined expressions for Part 4) is amended as follows.

(2) In the second column of the entry for “Adverse effect on competition”, after
15“134(2)” insert “and (2A)”.

(3) After the entry in the table for “Consumer” insert—

Cross-market reference Section 131(6).

(4) Before the entry in the table for “Public interest consideration” insert—

Ordinary reference Section 131(6).

Section 27(10)

20SCHEDULE 10 Markets: public interest interventions

1 Part 4 of the 2002 Act (market investigations) is amended as follows.

2 (1) Section 131 (power to make market investigation references) is amended as
follows.

(2) 25In subsection (4), after “132” insert “or 140A(5)”.

(3) In subsection (6), in the definition of “market investigation reference”, after
“132” insert “or 140A(5)”.

3 In section 132 (ministerial power to make references), in subsection (4)—

(a) after “if” insert

(a), and 30

(b) at the end insert ; or

(b) a reference has been made under section 140A(5) in
relation to the same matter but has not been finally
determined.

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4 In section 135 (variation of references), in subsection (1), for “by it or (as the
case may be) by him” substitute “by it under section 131 or (as the case may
be) by the appropriate Minister under section 132”.

5 (1) Section 140 (supplementary provision about intervention notices under
5section 139(1)) is amended as follows.

(2) In subsection (1)—

(a) for paragraphs (a) and (b) substitute—

(a) the matter to which the market study notice
concerned relates;

(b) 10the date of publication of that notice;, and

(b) in paragraph (c), for “case” substitute “matter”.

(3) In subsection (2), for “case” (in the second place where it occurs) substitute
“matter”.

(4) After subsection (4) insert—

(4A) 15An intervention notice under section 139(1) shall also cease to be in
force if—

(a) it mentions a public interest consideration which was not
finalised on the giving of the notice or public interest
considerations which, at that time, were not finalised;

(b) 20no other public interest consideration is mentioned in the
notice;

(c) at least 24 weeks has elapsed since the giving of the notice;

(d) the public interest consideration mentioned in the notice has
not been finalised within that period of 24 weeks or (as the
25case may be) none of the public interest considerations
mentioned in the notice has been finalised within that period
of 24 weeks; and

(e) the Secretary of State has not, by the end of that period of 24
weeks, made a reference under section 140A in relation to the
30matter.

(4B) Subsection (4C) applies in a case where—

(a) an intervention notice ceases to be in force in accordance with
subsection (4A);

(b) the CMA has, before the time at which the notice ceases to be
35in force, prepared a market study report in relation to the
matter within the period permitted by section 131B(4) and
given it to the Secretary of State in accordance with section
140A(2); and

(c) the report contains the decision of the CMA that it should
40make a reference in relation to the matter concerned under
section 131.

(4C) In a case to which this subsection applies—

(a) the CMA shall, as soon as reasonably practicable, make a
reference in relation to the matter under section 131; and

(b) 45the reference is to be treated for the purposes of this Part as
having been made in accordance with the requirements
imposed by section 131B.

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(5) In subsection (5)—

(a) before paragraph (a) insert—

(za) the CMA accepts an undertaking under section 154
instead of making a reference under section 131 in
5relation to the matter;

(zb) the CMA publishes notice that it has otherwise
decided not to make a reference under section 131 in
relation to the matter;

(zc) the period permitted for the preparation by the CMA
10of the market study report in relation to the matter
and for the report to be published under section
131B(4) or (as the case may be) given to the Secretary
of State under section 140A(2) has expired and no
such report has been so prepared or no such action
15has been taken;

(zd) the Secretary of State makes a reference under section
140A(4) in relation to the matter;,

(b) in paragraph (a), after “143(1) or (3)” insert “or (as the case may be)
143A(2) or (3)”,

(c) 20in paragraph (c), after “143(1)” insert “or (as the case may be)
143A(2)”,

(d) in paragraph (d), at the end insert “or (as the case may be) fails to
make and publish a decision under subsection (2) of section 146A
within the period required by subsection (6) of that section”,

(e) 25in paragraph (e), at the end insert “or (as the case may be) decides
under section 146A(2) to make no finding at all in relation to the
matter”, and

(f) in paragraph (f), after “147(2)” insert “or (as the case may be)
147A(2)”.

(6) 30In subsection (6)—

(a) before paragraph (a) insert—

(za) in a case falling within subsection (5)(za), the
acceptance of the undertaking concerned;

(zb) in a case falling within subsection (5)(zb), the
35publication of the notice concerned;,

(b) in paragraph (a), after “(5)” insert “(zc),”, and

(c) after paragraph (a) insert—

(aa) in a case falling within subsection (5)(zd), the making
of the reference concerned;.

(7) 40After subsection (6) insert—

(6A) In subsection (6)(za) the reference to the acceptance of the
undertaking concerned 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 undertaking in the group; but
45undertakings which vary, supersede or revoke earlier undertakings
shall be disregarded for the purposes of subsections (5)(za) and
(6)(za).

(8) In subsection (7), after “147(2)” insert “or (as the case may be) 147A(2)”.

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6 After section 140A (inserted by section 27) insert—

140B Variation of restricted PI references and full PI references

(1) The Secretary of State may at any time vary a restricted PI reference
or a full PI reference.

(2) 5The Secretary of State shall consult the CMA before varying any such
reference.

(3) But subsection (2) does not apply if the CMA requested the variation
concerned.

(4) No variation under this section is capable of altering the public
10interest consideration or considerations specified in the reference.

7 (1) Section 141 (questions to be decided where section 139(1) intervention notice
is in force) is amended as follows.

(2) For subsection (1) substitute—

(1) This section applies where the Secretary of State makes a restricted
15PI reference.

(3) For the heading, substitute “Restricted PI references: questions to be decided
by CMA”.

8 (1) Section 142 (investigations and reports) is amended as follows.

(2) In subsection (1)—

(a) 20for the words from the beginning to “the Commission” substitute
“Where the Secretary of State makes a restricted PI reference or a full
PI reference, the CMA”, and

(b) after “section 143(1) or (3)” insert “or (as the case may be) 143A(2)
or (3)”.

(3) 25In subsection (2)—

(a) in paragraph (a), at the end insert “or (as the case may be) 141A”,

(b) omit the “and” after paragraph (b), and

(c) after paragraph (c) insert ; and

(d) in the case of a report in relation to a full PI reference
30in respect of which the Secretary of State appointed a
public interest expert, a summary of the views of the
expert.

(4) After subsection (2) insert—

(2A) A summary of the views of a public interest expert in a report
35under this section shall be approved by the expert before action is
taken in relation to it under section 143A(2) or (3).

9 (1) Section 143 (publication etc of reports) is amended as follows.

(2) Before subsection (1) insert—

(A1) This section applies in relation to a report prepared under section 142
40in respect of a restricted PI reference.

(3) In subsection (1), in the words before paragraph (a), for “a report under
section 142” substitute “the report”.

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(4) Omit subsection (2).

(5) In subsection (3), for “a report under section 142” substitute “the report”.

(6) Omit subsections (5) to (8).

(7) For the heading substitute “Restricted PI references: publication etc of
5reports of CMA”.

10 After section 143 insert—

143A Full PI references: publication etc of reports of CMA

(1) This section applies in relation to a report prepared under section 142
in respect of a full PI reference.

(2) 10The CMA shall publish the report if it contains—

(a) the decision of the CMA that there is no adverse effect on
competition;

(b) the decision of the CMA that there is an adverse effect on
competition but that the feature or combination of features
15which gave rise to it does not operate and may not be
expected to operate against the public interest; or

(c) the decisions of the CMA that there is one or more than one
adverse effect on competition and that one or more than one
of the features or combinations of features which gave rise to
20an adverse effect on competition operates or may be expected
to operate against the public interest but, on the question
mentioned in section 141A(5)(a), and in relation to each effect
adverse to the public interest concerned, that no action
should be taken by the Secretary of State.

(3) 25The CMA shall give the report to the Secretary of State if it contains
the decisions of the CMA—

(a) that there is one or more than one adverse effect on
competition and that one or more than one of the features or
combinations of features which gave rise to an adverse effect
30on competition operates or may be expected to operate
against the public interest; and

(b) in relation to at least one effect adverse to the public interest
concerned, that action should be taken by the Secretary of
State.

(4) 35The Secretary of State shall publish, no later than publication of the
Secretary of State’s decision under section 146A(2) in relation to the
case, a report of the CMA given to the Secretary of State under
subsection (3) and not required to be published by virtue of section
148A(3).

11 (1) 40Section 144 (time-limits for investigations and reports: Part 4) is amended as
follows.

(2) In subsection (1)—

(a) for “the date of the reference” substitute “the relevant date”, and

(b) for the words from “publish it” to the end substitute “publish it
45under section 143(1) or 143A(2) or (as the case may be) give it to the
Secretary of State in accordance with section 143(3) or 143A(3).”

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(3) After subsection (1) insert—

(1A) For the purposes of subsection (1), the “relevant date” is—

(a) in the case of a report in relation to a restricted PI reference or
to a full PI reference which specifies that the Secretary of State
5does not propose to appoint a public interest expert, the date
of the reference;

(b) in the case of a report in relation to a full PI reference which
specifies that the Secretary of State does propose to appoint a
public interest expert, the earliest of the following—

(i) 10the date of the appointment of the expert;

(ii) the date on which the Secretary of State gives notice to
the CMA that the Secretary of State no longer intends
to appoint such an expert;

(iii) the end of the period of 2 months beginning with the
15date of the reference.

(4) In subsection (4), after “143(1) or (3)” insert “or (as the case may be) 143A(2)
or (3)”.

12 (1) Section 145 (restrictions where public interest considerations not finalised:
Part 4) is amended as follows.

(2) 20In subsection (2), after “143(3)” insert “or (as the case may be) 143A(3)”.

(3) In subsection (3), after “141(3)” insert “or (as the case may be) 141A(4) and
(5).”

(4) In subsection (4), after “141(3)” insert “or (as the case may be) 141A(4) and
(5).”

13 (1) 25Section 146 (decision of Secretary of State) is amended as follows.

(2) In subsection (1), in the words before paragraph (a), for “report of the
Commission” substitute “report of the CMA in relation to a restricted PI
reference”.

(3) In the heading, at the beginning, insert “Restricted PI references:”.

14 30After section 146 insert—

146A Full PI references: decision of Secretary of State

(1) Subsection (2) applies where the Secretary of State has received a
report of the CMA in relation to a full PI reference which—

(a) has been prepared under section 142;

(b) 35contains the decisions of the CMA that there is one or more
than one adverse effect on competition and that one or more
than one of the features or combinations of features that gave
rise to an adverse effect on competition operates or may be
expected to operate against the public interest and that, in
40relation to at least one effect adverse to the public interest
concerned, action should be taken by the Secretary of State;
and

(c) has been given to the Secretary of State as required by section
143A(3).

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(2) The Secretary of State shall decide whether to make an adverse
public interest finding in relation to the matter and whether to make
no finding at all in the matter.

(3) For the purposes of this Part, the Secretary of State makes an adverse
5public interest finding in relation to a matter if, in relation to that
matter, the Secretary of State decides—

(a) that there is an adverse effect on competition;

(b) that there is one or more than one admissible public interest
consideration which is relevant to the matter; and

(c) 10taking account only of any adverse effect on competition and
any relevant admissible public interest consideration or
considerations, that 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.

(c)(c)15taking account only of any adverse effect on competition and
any relevant admissible public interest consideration or
considerations, that 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.

(4) 20The Secretary of State may make no finding at all in a matter only if
the Secretary of State decides that there is no admissible public
interest consideration which is relevant to a consideration of the
matter concerned.

(5) In deciding whether to make an adverse public interest finding
25under subsection (2), the Secretary of State shall accept the decision
of the CMA as to whether there is an adverse effect on competition
in relation to the matter.

(6) The Secretary of State shall make and publish the decision under
subsection (2) within the period of 90 days beginning with the receipt
30of the report of the CMA under section 142.

(7) In this section “admissible public interest consideration” means a
public interest consideration which—

(a) was mentioned in the intervention notice concerned; and

(b) was not disregarded by the CMA for the purposes of its
35report under section 142.

15 In section 147 (remedial action by Secretary of State), in the heading, at the
beginning, insert “Restricted PI references:”.

16 After section 147 insert—

147A Full PI references: remedial action by Secretary of State

(1) 40Subsection (2) applies where the Secretary of State has decided under
subsection (2) of section 146A within the period required by
subsection (6) of that section to make an adverse public interest
finding in relation to a matter and has published the decision within
the period so required.

(2) 45The Secretary of State may take such action under section 159 or 161
as the Secretary of State considers to be reasonable and practicable to
remedy, mitigate or prevent any of the effects adverse to the public
interest which have resulted from, or may be expected to result from,
the features or combinations of features in question.

(3) 50In making a decision under subsection (2) the Secretary of State,
shall, in particular, have regard to the report of the CMA under
section 142.

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(4) In making a decision under subsection (2) the Secretary of State may,
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
5interest concerned; and

(b) any detrimental effects on customers so far as resulting from
those effects.

17 (1) Section 148 (reversion of the matter) is amended as follows.

(2) Omit subsections (3) to (5).

(3) 10For the heading substitute “Restricted PI references: reversion of the matter
to CMA”.

18 After section 148 insert—

148A Full PI references: reversion of the matter to CMA

(1) This section applies if—

(a) 15the Secretary of State decides under section 146A(2) to make
no finding at all in the matter; or

(b) the Secretary of State fails to make and publish the decision
under subsection (2) of section 146A within the period
required by subsection (6) of that section.

(2) 20The CMA shall proceed under section 138 as if—

(a) a reference under section 131 had been made (in accordance
with the requirements imposed by section 131B) instead of a
full PI reference; and

(b) its report had been prepared and published under section 136
25within the period permitted by section 137.

(3) The CMA shall publish the report which has been prepared by it
under section 142 (if still unpublished) as soon as it becomes able to
proceed by virtue of subsection (2).

(4) In relation to proceedings by virtue of subsection (2), the reference in
30section 138(3) to decisions of the CMA included in its report by virtue
of section 134(4) is to be construed as a reference to decisions which
were included in the report of the CMA by virtue of section 141A(6).

(5) Where the CMA becomes under a duty to proceed as mentioned in
subsection (2), references in this Part to a reference under section 131,
35so far as necessary, are to be construed accordingly.

(6) Where the CMA, in proceeding by virtue of subsection (2), intends to
proceed in a way which is not consistent with its decisions as
included in its report by virtue of section 141A(6), it shall not so
proceed without the consent of the Secretary of State.

(7) 40The Secretary of State shall not withhold consent under subsection
(6) unless the Secretary of State believes that the proposed alternative
way of proceeding will operate against the public interest.

(8) For the purposes of subsection (7) a proposed alternative way of
proceeding will operate against the public interest only if any
45admissible public interest consideration or considerations outweigh

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the considerations which have led the CMA to propose proceeding
in that way.

(9) In deciding whether to withhold consent under subsection (6), the
Secretary of State shall accept the CMA’s view or what, if the only
5relevant consideration were how to remedy, mitigate or prevent the
adverse effect on competition concerned or any detrimental effect on
customers so far as resulting from the adverse effect on competition,
would be the most appropriate way to proceed.

(10) In this section “admissible public interest consideration” has the
10same meaning as in section 146A.

19 (1) Section 149 (intervention notices under section 139(2)) is amended as
follows.

(2) In subsection (1)(c), for “case” substitute “proposal to accept the
undertaking”.

(3) 15In subsection (2), for “case” (in the second place where it occurs) substitute
“proposal to accept the undertaking”.

20 In section 150 (power of veto of Secretary of State: undertakings in lieu),
before subsection (1) insert—

(A1) Where an intervention notice under subsection 139(1) is in force, the
20CMA shall not, without the consent of the Secretary of State, accept
any proposed undertaking under section 154 in relation to the matter
concerned.

21 (1) Section 151 (further interaction of intervention notices with general
procedure) is amended as follows.

(2) 25For subsection (1) substitute—

(1) Sections 134(1), (1A), (4), (6) and (7), 136(1) to (6), 137(1) to (6), 138
and 138A do not apply in relation to a restricted PI reference or a full
PI reference.

(3) In subsection (2), for the words from “, the Commission” to the end
30substitute “at a time after the Secretary of State has made a restricted PI
reference or a full PI reference, the CMA shall proceed as if the reference
concerned had instead been made under section 131 (in accordance with the
requirements imposed by section 131B).”

(4) In subsection (4), for the words from “, the Commission shall” to the end
35substitute “, the CMA shall proceed as if the restricted PI reference or (as the
case may be) the full PI reference concerned had instead been made by the
CMA under section 131 (in accordance with the requirements imposed by
section 131B).”

(5) For the heading, substitute “Public interest intervention cases: interaction
40with general procedure”.

22 In section 152 (certain duties in relation to providing information), omit
subsection (2).

23 In section 155 (undertakings in lieu: procedural requirements), in subsection
(3)(a), at the end insert “or (but for the effect of section 140A(2)) it would