(a) concerned in the management or control of the undertaking, or

(b) employed by, or otherwise working for, the undertaking.”

32 Civil enforcement of investigation powers

(1) Part 1 of the 1998 Act (competition) is amended as follows.

(2) 5After section 40 insert—

“Civil sanctions

40A Penalties: failure to comply with requirements

(1) Where the CMA considers that a person has, without reasonable
excuse, failed to comply with a requirement imposed on the person
10under section 26, 26A, 27, 28 or 28A, it may impose a penalty of such
amount as it considers appropriate.

(2) The amount may be—

(a) a fixed amount,

(b) an amount calculated by reference to a daily rate, or

(c) 15a combination of a fixed amount and an amount calculated by
reference to a daily rate.

(3) A penalty imposed under subsection (1) must not—

(a) in the case of a fixed amount, exceed such amount as the
Secretary of State may by order specify;

(b) 20in the case of an amount calculated by reference to a daily rate,
exceed such amount per day as the Secretary of State may so
specify;

(c) in the case of a fixed amount and an amount calculated by
reference to a daily rate, exceed such fixed amount and such
25amount per day as the Secretary of State may so specify.

(4) The fixed amount specified for the purposes of subsection (3)(a) or (c)
may not exceed £30,000.

(5) The amount per day specified for the purposes of subsection (3)(b)
or (c) may not exceed £15,000.

(6) 30In imposing a penalty by reference to a daily rate—

(a) no account is to be taken of any days before the service of the
notice under section 112 of the Enterprise Act 2002 (as applied
by subsection (9)) on the person concerned, and

(b) unless the CMA determines an earlier date (whether before or
35after the penalty is imposed), the amount payable ceases to
accumulate at the beginning of the earliest of the days
mentioned in subsection (7).

(7) The days are—

(a) the day on which the requirement concerned is satisfied;

(b) 40the day on which the CMA makes a decision (within the
meaning given by section 31(2)) or terminates the investigation
in question without making such a decision;

(c) if the Secretary of State has made an order under section
31F(1)(b) imposing a time-limit on the making of such a
decision, the latest day on which such a decision may be made
as a result of the investigation in question.

(8) 5Before making an order under subsection (3), the Secretary of State
must consult the CMA and such other persons as the Secretary of State
considers appropriate.

(9) Sections 112 to 115 of the Enterprise Act 2002 (supplementary provisions
about penalties) apply in relation to a penalty imposed under subsection (1) as
10they apply in relation to a penalty imposed under section 110(1) of that Act.

40B Statement of policy on penalties

(1) The CMA must prepare and publish a statement of policy in relation to
the use of its powers under section 40A.

(2) The CMA must, in particular, include a statement about the
15considerations relevant to the determination of the nature and amount
of any penalty imposed under section 40A.

(3) The CMA may revise its statement of policy and, where it does so, it
must publish the revised statement.

(4) The CMA must consult such persons as it considers appropriate when
20preparing or revising its statement of policy.

(5) If the proposed statement of policy or revision relates to a matter in
respect of which a regulator exercises concurrent jurisdiction, those
consulted must include that regulator.

(6) In deciding whether and, if so, how to proceed under section 40A, the
25CMA must have regard to the statement of policy which was most
recently published under this section at the time when the failure
concerned occurred.”

(3) Section 38 (guidance about appropriate level of penalties under section 36) is
amended as follows.

(4) 30In subsection (1), after “under this Part” insert “in respect of an infringement of
the Chapter 1 prohibition, the Chapter 2 prohibition, the prohibition in Article
81(1) or the prohibition in Article 82”.

(5) In subsection (1A), for “a penalty under this Part” substitute “such a penalty”.

(6) In subsection (8), after “under this Part” insert “in respect of an infringement of
35a kind mentioned in subsection (1)”.

(7) Section 42 (offences of failure to comply with requirements imposed in
investigations and obstruction) is amended as follows.

(8) Omit subsections (1) to (4).

(9) In subsection (6), omit “(1) or”.

33 40Extension of powers to issue warrants to CAT

Schedule 13 (which amends the 1998 Act to extend the powers under that Act
to issue warrants to the Competition Appeal Tribunal) has effect.

34 Part 1 of the 1998 Act: procedural matters

(1) Part 1 of the 1998 Act (competition) is amended as follows.

(2) After section 25 (power to investigate) insert—

“25A Power of CMA to publish notice of investigation

(1) 5Where the CMA decides to conduct an investigation it may publish a
notice which may, in particular—

(a) state its decision to do so;

(b) indicate which of subsections (2) to (7) of section 25 the
investigation falls under;

(c) 10summarise the matter being investigated;

(d) identify any undertaking whose activities are being
investigated as part of the investigation;

(e) identify the market which is or was affected by the matter being
investigated.

(2) 15Section 57 does not apply to a notice under subsection (1) to the extent
that it includes information other than information mentioned in that
subsection.

(3) Subsection (4) applies if—

(a) the CMA has published a notice under subsection (1) which
20identifies an undertaking whose activities are being
investigated, and

(b) the CMA subsequently decides (without making a decision
within the meaning given by section 31(2)) to terminate the
investigation of the activities of the undertaking so identified.

(4) 25The CMA must publish a notice stating that the activities of the
undertaking in question are no longer being investigated.”

(3) Schedule 9 (examples of provision that may be made in rules) is amended as
follows.

(4) After paragraph 1 insert—

30“Delegation of functions

1A (1) Rules may provide for the exercise of a function of the CMA under
this Part on its behalf—

(a) by one or more members of the CMA Board (see Part 2 of
Schedule 4 to the Enterprise and Regulatory Reform Act
352012);

(b) by one or more members of the CMA panel (see Part 3 of that
Schedule to that Act);

(c) by one or more members of staff of the CMA;

(d) jointly by one or more of the persons mentioned in paragraph
40(a), (b) or (c).

(2) Sub-paragraph (1) does not apply in relation to any function
prescribed in regulations made under section 7(1) of the Civil
Aviation Act 1982 (power for Secretary of State to prescribe certain
functions of the Civil Aviation Authority which must not be
45performed on its behalf by any other person).”

(5) After paragraph 13 insert—

“Oral hearings: procedure

13A (1) Rules may make provision as to the procedure to be followed by the
CMA in holding oral hearings as part of an investigation.

(2) 5Rules may, in particular, make provision as to the appointment of a
person mentioned in sub-paragraph (3) who has not been involved
in the investigation in question to—

(a) chair an oral hearing, and

(b) prepare a report following the hearing and give it to the
10person who is to exercise on behalf of the CMA its function of
making a decision (within the meaning given by section
31(2)) as a result of the investigation.

(3) The persons are—

(a) a member of the CMA Board;

(b) 15a member of the CMA panel;

(c) a member of staff of the CMA.

(4) The report must—

(a) contain an assessment of the fairness of the procedure
followed in holding the oral hearing, and

(b) 20identify any other concerns about the fairness of the
procedure followed in the investigation which have been
brought to the attention of the person preparing the report.”

(6) After paragraph 13A insert—

“Procedural complaints

13B (1) 25Rules may make provision as to arrangements to be made by the
CMA for dealing with complaints about the conduct by the CMA of
an investigation.

(2) Rules may, in particular, make provision as to—

(a) the appointment of a person mentioned in sub-paragraph (3)
30who has not been involved in the investigation in question to
consider any such complaint;

(b) the time-table for the consideration of any such complaint.

(3) The persons are—

(a) a member of the CMA Board;

(b) 35a member of the CMA panel;

(c) a member of staff of the CMA.”

(7) After paragraph 13B insert—

“Settling cases

13C Rules may make provision as to the procedure to be followed in a
40case where, during an investigation, one or more persons notify the
CMA that they accept that there has been an infringement of a kind
to which the investigation relates.”

Interim measures and other sanctions

35 Threshold for interim measures

In section 35 of the 1998 Act (interim measures), in subsection (2)(a), for
“serious, irreparable damage” substitute “significant damage”.

36 5Penalties: guidance etc.

(1) Part 1 of the 1998 Act (competition) is amended as follows.

(2) In section 36 (penalties), after subsection (7) insert—

“(7A) In fixing a penalty under this section the CMA must have regard to—

(a) the seriousness of the infringement concerned, and

(b) 10the desirability of deterring both the undertaking on whom the
penalty is imposed and others from—

(i) entering into agreements which infringe the Chapter 1
prohibition or the prohibition in Article 81(1), or

(ii) engaging in conduct which infringes the Chapter 2
15prohibition or the prohibition in Article 82.”

(3) In section 38 (guidance on level of penalties), in subsection (8), before “must
have regard” insert “and the Tribunal”.

Miscellaneous

37 Power for Secretary of State to impose time-limits on investigations etc.

20After section 31E of the 1998 Act insert—

“31F Power for Secretary of State to impose time-limits on investigations
etc.

(1) The Secretary of State may by order impose time-limits in relation to—

(a) the conduct by the CMA of investigations or investigations of a
25description specified in the order;

(b) the making by the CMA of decisions (within the meaning given
by section 31(2)) as a result of investigations or investigations of
such a description.

(2) Before making an order under subsection (1), the Secretary of State
30must consult the CMA and such other persons as the Secretary of State
considers appropriate.”

38 Review of operation of Part 1 of 1998 Act

(1) The Secretary of State must—

(a) review the operation of Part 1 of the 1998 Act, and

(b) 35prepare and publish a report on the outcome of the review.

(2) The report must be published before the end of the period of 5 years beginning
with the day on which Part 1 of Schedule 5 (which transfers the functions of the
Office of Fair Trading under Part 1 of the 1998 Act to the Competition and
Markets Authority) comes into force.

(3) The Secretary of State must lay the report before Parliament.

CHAPTER 4 Cartels

39 Cartel offence

(1) Section 188 of the 2002 Act (cartel offence) is amended as follows.

(2) 5In subsection (1), omit “dishonestly”.

(3) Omit subsection (6).

(4) After subsection (7) insert—

“(8) This section is subject to section 188A.”

(5) After that section insert—

“188A 10 Circumstances in which cartel offence not committed

(1) An individual does not commit an offence under section 188(1) if,
under the arrangements—

(a) in a case where the arrangements would (operating as the
parties intend) affect the supply in the United Kingdom of a
15product or service, customers would be given relevant
information about the arrangements before they enter into
agreements for the supply to them of the product or service so
affected,

(b) in the case of bid-rigging arrangements, the person requesting
20bids would be given relevant information about them at or
before the time when a bid is made, or

(c) in any case, relevant information about the arrangements
would be published, before the arrangements are implemented,
in the manner specified at the time of the making of the
25agreement in an order made by the Secretary of State.

(2) In subsection (1), “relevant information” means—

(a) the names of the undertakings to which the arrangements
relate,

(b) a description of the nature of the arrangements which is
30sufficient to show why they are or might be arrangements of the
kind to which section 188(1) applies,

(c) the products or services to which they relate, and

(d) such other information as may be specified in an order made by
the Secretary of State.

(3) 35An individual does not commit an offence under section 188(1) if the
agreement is made in order to comply with a legal requirement.

(4) In subsection (3), “legal requirement” has the same meaning as in
paragraph 5 of Schedule 3 to the Competition Act 1998.

(5) A power to make an order under this section—

(a) 40is exercisable by statutory instrument,

(b) may be exercised so as to make different provision for different
cases or different purposes, and

(c) includes power to make such incidental, supplementary,
consequential, transitory, transitional or saving provision as the
5Secretary of State considers appropriate.

(6) A statutory instrument containing an order under this section is subject
to annulment in pursuance of a resolution of either House of
Parliament.”

(6) The amendments made by this section apply only in relation to agreements
10falling within section 188(1) which—

(a) are made after the commencement of this section, and

(b) relate to arrangements made or to be made after that commencement.

40 Extension of power to issue warrants to CAT

(1) Section 194 of the 2002 Act (power to enter premises under a warrant) is
15amended as follows.

(2) In subsection (1), for the words from the beginning to “if he is satisfied”
substitute “On an application made to it by the CMA or, in Scotland, the
procurator fiscal, the appropriate body may issue a warrant if it is satisfied”.

(3) After subsection (1) insert—

“(1A) 20In subsection (1), “appropriate body” means—

(a) in England and Wales and Northern Ireland, the High Court or
the Competition Appeal Tribunal;

(b) in Scotland, the sheriff.”

(4) After subsection (4) insert—

“(4A) 25An application for a warrant under this section must be made—

(a) in the case of an application to the High Court or the sheriff, in
accordance with rules of court;

(b) in the case of an application to the Competition Appeal
Tribunal, in accordance with rules made under section 15.”

(5) 30In Schedule 4 to that Act, before paragraph 11, but after the cross-heading
immediately preceding it, insert—

“10A (1) Tribunal rules may make provision as to proceedings on an
application for a warrant under section 194 of this Act or section 28,
28A, 62, 62A, 63, 65G or 65H of the 1998 Act, including provision—

(a) 35for the Tribunal dealing with the proceedings to consist only
of the President or a member of the panel of chairmen;

(b) as to the manner in which the proceedings are to be
conducted, including provision—

(i) for such applications to be determined without a
40hearing;

(ii) in cases where there is a hearing, for it to be held in
private if the Tribunal considers it appropriate
because it is considering information of a kind
mentioned in paragraph 1(2);

(c) as to the persons entitled to be heard in such proceedings
(where there is a hearing);

(d) for requiring persons to attend to give evidence and produce
documents, and for authorising the administration of oaths
5to witnesses;

(e) as to the evidence which may be required or admitted and the
extent to which it should be oral or written;

(f) allowing the Tribunal to fix time-limits with respect to any
aspect of the proceedings and to extend any time-limit
10(before or after its expiry).

(2) Paragraphs 2 to 8, and 11 to 17, of this Schedule do not apply in
relation to the institution or conduct of proceedings for a warrant
mentioned in sub-paragraph (1).”

(6) In section 14 of that Act (constitution of Tribunal for particular proceedings
15and its decisions), in subsection (5), for “paragraph 18” substitute “paragraphs
10A(1)(a) and 18”.

CHAPTER 5 Miscellaneous

Enforcement orders: markets and mergers

41 Enforcement orders: monitoring compliance and determination of disputes

20In Schedule 8 to the 2002 Act (provision that may be contained in certain
enforcement orders made under Part 3 or 4 of that Act), after paragraph 20B
insert—

“Monitoring of compliance and determination of disputes

20C (1) An order may provide for the appointment of one or more than one
25person (referred to in this paragraph as an “appointee”) by the
relevant authority or by such other persons as may be specified or
described in the order to—

(a) monitor compliance with such terms of the order as are so
specified or described or terms of any directions given under
30the order;

(b) determine any dispute between persons who are subject to
the order about what is required by any such terms.

(2) An order made by virtue of this paragraph must make provision as
to the terms of an appointee’s appointment.

(3) 35A determination made by virtue of an order under this paragraph is
binding on—

(a) any person who is subject to the order;

(b) the relevant authority; and

(c) in the case where the relevant authority is the Secretary of
40State, the CMA.”

42 Enforcement orders: provision of information

(1) Schedule 8 to the 2002 Act (provision that may be contained in certain
enforcement orders made under Part 3 or 4 of that Act) is amended as follows.

(2) Omit paragraph 15 (publication etc. of price information).

(3) 5Paragraph 17 (publication etc. of other information) is amended as follows.

(4) In sub-paragraph (1)—

(a) in the words before paragraph (a), after “publish” insert “or otherwise
notify”, and

(b) after paragraph (c) insert—

“(d) 10information in relation to prices of the goods or
services supplied;

(e) such other information in relation to the goods or
services supplied as the relevant authority considers
appropriate.”

(5) 15After sub-paragraph (1) insert—

“(1A) An order may prohibit the publication or other notification of
information falling within sub-paragraph (1)(a) to (e) by a person
supplying goods or services.”

(6) In paragraph 18 (supplementary provision about orders under paragraphs 15
20and 17), omit “15 or”.

Concurrency

43 Powers of sector regulators

(1) Section 54 of the 1998 Act (concurrent powers for regulators) is amended as
follows.

(2) 25In subsection (6)—

(a) after “may” insert “—

(a) prescribe circumstances in which the CMA may decide
that, in a particular case, it is to exercise Part 1 functions
in respect of the case rather than a regulator, and

(b)”, and 30

(b) after “Secretary of State” insert “, the CMA”.

(3) After subsection (6) insert—

“(6A) Where the regulations make provision as mentioned in subsection
(6)(a), they must—

(a) 35include provision requiring the CMA to consult the regulator
concerned before making a decision that the CMA is to exercise
Part 1 functions in respect of a particular case, and

(b) provide that, in a case where a regulator has given notice under
section 31(1) that it proposes to make a decision (within the
40meaning given by section 31(2)), the CMA may only decide that
it is to exercise Part 1 functions in respect of the case rather than
the regulator if the regulator consents.”

(4) After subsection (6A) insert—

“(6B) The Secretary of State may by regulations make provision requiring
arrangements to be made for the sharing of information between
competent persons in connection with concurrent cases.

(6C) 5For the purposes of subsection (6B), “a concurrent case” is a case in
respect of which—

(a) the CMA considers that Part 1 functions are, or (but for
provision made under subsection (5)(e)) would be, exercisable
by both it and any regulator;

(b) 10any regulator considers that Part 1 functions are, or (but for
provision made under subsection (5)(e)) would be, exercisable
by it.”

(5) Schedule 14 (which makes provision governing the relationship between the
powers of regulators under the 1998 Act and those under sector-specific
15legislation) has effect.

Miscellaneous

44 Recovery of CMA’s costs in respect of price control references

After section 193 of the Communications Act 2003 (reference of price control
matters) insert—

“193A 20 Recovery of CMA’s costs in respect of price control references

(1) Where a determination is made on a price control matter referred by
virtue of section 193, the CMA may make an order in respect of the
costs incurred by it in connection with the reference (a “costs order”).

(2) A costs order may require the payment to the CMA of some or all of
25those costs by such parties to the appeal which gave rise to the
reference, other than OFCOM, as the CMA considers appropriate.

(3) A costs order must—

(a) set out the total costs incurred by the CMA in connection with
the reference, and

(b) 30specify the proportion of those costs to be paid by each party to
the appeal in respect of whom the order is made.

(4) In deciding on the proportion of costs to be paid by a party to the appeal
the CMA must, in particular, consider—

(a) the extent to which the determination on the reference upholds
35OFCOM’s decision in relation to the price control matter in
question,

(b) the extent to which the costs were attributable to the
involvement in the appeal of the party, and

(c) the conduct of the party.

(5) 40A costs order—

(a) must be made as soon as reasonably practicable after the
making of the determination on the reference, but

(b) does not take effect unless the Tribunal, in deciding the appeal
which gave rise to the reference, decides the price control matter