Enterprise and Regulatory Reform Bill (HC Bill 61)

(3) After subsection (2) insert—

“(2A) Where the CMA has reasonable grounds for suspecting that pre-
emptive action has or may have been taken, it may by order, for the
purpose of restoring the position to what it would have been had the
5action not been taken or otherwise for the purpose of mitigating its
effects—

(a) do anything mentioned in subsection (2)(b) to (d);

(b) impose such other obligations, prohibitions or restrictions as
it considers appropriate for that purpose.”

(4) 10After subsection (2A) insert—

“(2B) A person may, with the consent of the CMA, take action or action of
a particular description where the action would otherwise constitute
a contravention of an order under this section.”

(5) Omit subsections (3) and (4).

(6) 15In subsection (5), for “Any other order” substitute “An order”.

(7) Omit subsection (6).

Interim measures: public interest and special interest cases

4 (1) Schedule 7 (enforcement regime for public interest and special public
interest cases) is amended as follows.

(2) 20Omit paragraph 1 (interim undertakings).

(3) In paragraph 2 (interim orders), after sub-paragraph (2) insert—

“(2A) Sub-paragraph (2B) applies where—

(a) an intervention notice or special intervention notice is in
force, and

(b) 25the Secretary of State or the CMA has reasonable grounds
for suspecting that pre-emptive action has or may have
been taken.

(2B) The Secretary of State or (as the case may be) the CMA may by
order, for the purpose of restoring the position to what it would
30have been had the pre-emptive action not been taken or otherwise
for the purpose of mitigating its effects—

(a) do anything mentioned in sub-paragraph (2)(b) to (d);

(b) impose such other obligations, prohibitions or restrictions
as it considers appropriate for that purpose.”

(4) 35In that paragraph, after sub-paragraph (2B) insert—

“(2C) A person may, with the consent of the Secretary of State or (as the
case may be) the CMA, take action or action of a particular
description where the action would otherwise constitute a
contravention of an order under this paragraph by the Secretary of
40State or (as the case may be) the CMA.”

(5) In that paragraph, in sub-paragraph (4)—

(a) omit “or the OFT”,

(b) for “by the OFT” substitute “by the CMA”, and

(c) omit “or (as the case may be) the OFT”.

(6) In that paragraph, in sub-paragraph (8), omit “1 or”.

(7) In that paragraph, in sub-paragraph (10), for the words from “the order” to
the end of the sub-paragraph substitute “—

(a) 5the Secretary of State or (as the case may be) the CMA has
reasonable grounds for suspecting that it is or may be the
case that two or more enterprises have ceased to be distinct
or that arrangements are in progress or in contemplation
which, if carried into effect, will result in two or more
10enterprises ceasing to be distinct; or

(b) the order relates to a special merger situation which has
been, or may have been, created.”

(8) In that paragraph, after sub-paragraph (11) insert—

“(12) In this paragraph “pre-emptive action” means action which might
15prejudice the reference or possible reference concerned under
section 45 or (as the case may be) 62 or impede the taking of any
action under this Part which may be justified by the Secretary of
State’s decisions on the reference.”

Interim measures: duration of interim orders under section 72

5 (1) 20Section 72 (initial enforcement orders: completed mergers) is amended as
follows.

(2) Omit subsection (5).

(3) In subsection (6)—

(a) in the words before paragraph (a), omit “section 81 or”, and

(b) 25in paragraph (a), for the words from “at the end of” to the end of the
paragraph substitute “—

(i) if the CMA accepts an undertaking under
section 80 or makes an order under section 81,
on the acceptance of the undertaking or the
30making of the order, and

(ii) otherwise on the final determination of the
reference concerned;”.

Section 25(2)

SCHEDULE 8 Mergers: time-limits

1 35Part 3 of the 2002 Act (mergers) is amended as follows.

2 In section 22 (duty to make references in relation to completed mergers), in
subsection (3)—

(a) before paragraph (a) insert—

“(za) the period within which the CMA is required by
40section 34ZA to decide whether the duty to make the
reference applies has expired without such a decision
having been made;”, and

(b) in paragraph (a) omit “or 96(3)”.

3 In section 33 (duty to make references in relation to anticipated mergers), in
subsection (3)—

(a) before paragraph (a) insert—

“(za) 5the period within which the CMA is required by
section 34ZA to decide whether the duty to make the
reference applies has expired without such a decision
having been made;”, and

(b) in paragraph (a) omit “or 96(3)”.

4 10After section 34 insert—

“34ZA Time-limits for decisions about references

(1) In carrying out its function of deciding whether to make a reference
under section 22 or 33, the CMA shall, within the initial period—

(a) decide whether the duty to make a reference under the
15section applies (taking account of the power under section
22(2) or (as the case may be) 33(2) and the operation of section
22(3) or (as the case may be) 33(3)); and

(b) inform the persons carrying on the enterprises concerned by
notice of the decision and of the reasons for it.

(2) 20Nothing in this section prevents the CMA from making a reference
under section 22 or 33 in the event that—

(a) it decides that the duty to make a reference does not apply
because it is considering whether to accept undertakings
under section 73; but

(b) 25no such undertakings are offered or accepted.

(3) In this section—

• “the initial period” means (subject to any extension under
  section 34ZB) the period of 40 working days beginning
  with—

  (a)

  30where the CMA is carrying out its function in
  consequence of the giving of a merger notice under
  section 96, the first working day after the day on
  which the CMA gives notice under section 96(2A) to
  the person who gave the merger notice, and

  (b)

  35in any other case, the first working day after the day
  on which the CMA informs the persons carrying on
  the enterprises concerned by notice that it has
  sufficient information to enable it to begin an
  investigation for the purposes of deciding whether to
  40make a reference;

• “working day” means any day which is not—

  (a)

  a Saturday, a Sunday, Good Friday or Christmas Day,
  or

  (b)

  a day which is a bank holiday in England and Wales.

(4) 45For the purposes of paragraph (a) in the definition of “initial period”
in subsection (3), the CMA is carrying out its functions in

consequence of the giving of a merger notice under section 96 if it is
considering whether to make a reference under section 22 or 33 in
relation to—

(a) arrangements of which notice is given in the merger notice or
5arrangements which do not differ from them in any material
respect, or

(b) the creation of any relevant merger situation which is, or may
be, created in consequence of carrying such arrangements
into effect.

(5) 10Nothing in this section applies where section 34A(2) or 46A(2)
applies (duties where case referred by the European Commission).

34ZB Extension of time-limits

(1) The CMA may extend the initial period mentioned in section
34ZA(1) if it considers that a relevant person has failed (with or
15without a reasonable excuse) to comply with any requirement of a
notice under section 109 in relation to the case in question.

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

(a) any person carrying on any of the enterprises concerned;

(b) any person who (whether alone or as a member of a group)
20owns or has control of any such person; or

(c) any officer, employee or agent of any person mentioned in
paragraph (a) or (b).

(3) For the purposes of subsection (2), a person or group of persons able,
directly or indirectly, to control or materially to influence the policy
25of a body of persons corporate or unincorporate, but without having
a controlling interest in that body of persons, may be treated as
having control of it.

(4) Where an intervention notice is in force in relation to the matter
concerned, the CMA may extend the initial period by no more than
3020 working days.

(5) The CMA may by notice extend the initial period if the European
Commission is considering a request made, in relation to the matter
concerned, by the United Kingdom (whether alone or with others)
under article 22(1) of the EC Merger Regulation (but is not yet
35proceeding with the matter in pursuance of such a request).

(6) An extension under subsection (1) or (4) comes into force when
published under section 107.

(7) An extension under subsection (1) continues in force until—

(a) the person concerned provides the information or documents
40to the satisfaction of the CMA or (as the case may be) appears
as a witness in accordance with the requirements of the CMA;
or

(b) the CMA publishes its decision to cancel the extension.

(8) An extension under subsection (5) shall be for the period which—

(a) 45begins when notice is given under that subsection, and

(b) ends when the CMA gives notice of the completion by the
European Commission of its consideration of the request of
the United Kingdom.

(9) In this section, “working day” has the same meaning as in section
534ZA.

34ZC Sections 34ZA and 34ZB: supplementary

(1) An extension of the period mentioned in section 34ZA(1) may be
made under each of subsections (1), (4) or (5) of section 34ZB.

(2) No more than one extension is possible under section 34ZA(4).

(3) 10Where a period is extended or further extended under section
34ZB(1), (4) or (5), the period as extended or (as the case may be)
further extended shall, subject to subsections (4) and (5), be
calculated by taking the period being extended and adding to it the
period of the extension (whether or not those periods overlap in
15time).

(4) Subsection (5) applies where—

(a) the period mentioned in section 34ZA(1) is further extended;

(b) the further extension and at least one previous extension is
made under one or more of subsections (1) and (5) of section
2034ZB; and

(c) the same days or fractions of days are included in or comprise
the further extension and are included in or comprise at least
one such previous extension.

(5) In calculating the period of the further extension, any days or
25fractions of days of the kind mentioned in subsection (4)(c) are to be
disregarded.

(6) The Secretary of State may by order do either or both of the
following—

(a) amend section 34ZA so as to alter the period of 40 working
30days mentioned in subsection (3) of that section or any period
for the time being mentioned in that subsection in
substitution for that period;

(b) amend section 34ZB so as to alter the period of 20 working
days mentioned in subsection (4) of that section or any period
35for the time being mentioned in that subsection in
substitution for that period.

(7) But no alteration may be made by virtue of subsection (6) which
results in—

(a) the period for the time being mentioned in section 34ZA(3)
40exceeding 40 working days; or

(b) the period for the time being mentioned in section 34ZB(4)
exceeding 20 working days.

(8) Before making an order under subsection (6), the Secretary of State
shall consult the CMA and such other persons as the Secretary of
45State considers appropriate.

(9) In this section, “working day” has the same meaning as in section
34ZA.”

5 (1) Section 39 (time-limits for investigations and reports) is amended as follows.

(2) In subsection (5) for “subsection (4)” substitute “this section”.

(3) After subsection (8) insert—

“(8A) In the case of a report on a reference under section 33, the CMA may
5provide that a specified period of no more than 3 weeks is to be
disregarded for the purposes of any time-limit for the preparation
and publication of the report which applies by virtue of this section
if—

(a) a relevant person has so requested before the end of the
10period of 3 weeks beginning with the date of the reference
concerned; and

(b) the CMA reasonably believes that the arrangements in
question might be abandoned.

(8B) If the CMA exercises the power under subsection (8A), the CMA
15shall publish a notice to that effect.”

6 After section 41 (duty to remedy effects of completed or anticipated
mergers) insert—

“41A Time-limit for discharging duty under section 41

(1) The CMA shall discharge its duty under section 41(2) within the
20period of 12 weeks beginning with the date on which it publishes the
report concerned under section 38.

(2) The CMA may extend, by no more than 6 weeks, the period within
which its duty under section 41(2) shall be discharged if it considers
that there are special reasons for doing so.

(3) 25The CMA may extend the period within which its duty under section
41(2) shall be discharged if it considers that a relevant person has
failed (whether with or without reasonable excuse) to comply with
any requirement of a notice under section 109 which is given in
relation to the reference.

(4) 30In subsection (3), “relevant person” means—

(a) any person carrying on any of the enterprises concerned;

(b) any person who (whether alone or as a member of a group)
owns or has control of any such person; or

(c) any officer, employee or agent of any person mentioned in
35paragraph (a) or (b).

(5) For the purposes of subsection (4), a person or group of persons able,
directly or indirectly, to control or materially to influence the policy
of a body of persons corporate or unincorporate, but without having
a controlling interest in that body of persons, may be treated as
40having control of it.

(6) An extension under subsection (2) or (3) comes into force when
published under section 107.

(7) An extension under subsection (3) continues in force until—

(a) the person concerned provides the information or documents
45to the satisfaction of the CMA or (as the case may be) appears

as a witness in accordance with the requirements of the CMA;
or

(b) the CMA publishes its decision to cancel the extension.

41B Section 41A: supplementary

(1) 5A period extended under section 41A(2) may also be extended under
section 41A(3), and a period extended under section 41A(3) may also
be extended under section 41A(2).

(2) No more than one extension is possible under section 41A(2).

(3) Where a period is extended or further extended under section 41A(2)
10or (3), the period as extended or (as the case may be) further
extended is, subject to subsections (4) and (5), to be calculated by
taking the period being extended and adding to it the period of the
extension (whether or not those periods overlap in time).

(4) Subsection (5) applies where—

(a) 15the period within which the CMA must discharge its duty
under section 41(2) is further extended;

(b) the further extension and at least one previous extension is
made under section 41A(3); and

(c) the same days or fractions of days are included in or comprise
20the further extension and are included in or comprise at least
one such previous extension.

(5) In calculating the period of the further extension, any days or
fractions of days of the kind mentioned in subsection (4)(c) are to be
disregarded.

(6) 25The Secretary of State may by order amend section 41A so as to alter
either or both of the following periods—

(a) the period of 12 weeks mentioned in subsection (1) of that
section or any period for the time being mentioned in that
subsection in substitution for that period;

(b) 30the period of 6 weeks mentioned in subsection (2) of that
section or any period for the time being mentioned in that
subsection in substitution for that period.

(7) But no alteration may be made by virtue of subsection (6) which
results in—

(a) 35the period for the time being mentioned in section 41A(1)
exceeding 12 weeks; or

(b) the period for the time being mentioned in section 41A(2)
exceeding 6 weeks.

(8) Before making an order under subsection (6) the Secretary of State
40shall consult the CMA and such other persons as the Secretary of
State considers appropriate.”

7 After section 73 (undertakings in lieu of references under section 22 or 33)

insert—

“73A Time-limits for consideration of undertakings

(1) A party concerned who wishes to offer an undertaking to the CMA
for the purposes of section 73(2) must do so before the end of the
5period of 5 working days beginning with—

(a) the day after the CMA gives the person the notice required by
section 34ZA(1)(b); or

(b) in a case where subsection (2) of section 34A applies, the day
after the CMA gives the person the notice required by
10paragraph (b) of that subsection.

(2) If an undertaking is offered for those purposes, the CMA shall,
before the end of the period of 10 working days beginning with the
day mentioned in subsection (1)—

(a) decide whether there are reasonable grounds for believing
15that the undertaking or a modified version of it might be
accepted by the CMA under section 73(2), and

(b) if it considers that it might be, give notice to the person who
offered the undertaking that it is considering it.

(3) If such a notice is given, the CMA shall decide whether to accept the
20undertaking before the end of the period of 50 working days
beginning with the day mentioned in subsection (1).

(4) The CMA may extend the period mentioned in subsection (3), by no
more than 40 working days, if it considers that there are special
reasons for doing so.

(5) 25The CMA shall prepare and publish guidance in relation to the
exercise of its power under subsection (4).

(6) The CMA may revise any such guidance and, where it does so, shall
publish the revised statement.

(7) The CMA may extend the period mentioned in subsection (3) if it
30considers that a relevant person has failed (with or without
reasonable excuse) to comply with any requirement of a notice given
under section 109 in relation to the case in question.

(8) In subsection (7), “relevant person” means—

(a) any person carrying on any of the enterprises concerned;

(b) 35any person who (whether alone or as a member of a group)
owns or has control of any such person; or

(c) any officer, employee or agent of any person mentioned in
paragraph (a) or (b).

(9) For the purposes of subsection (8), a person or group of persons able,
40directly or indirectly, to control or materially influence the policy of
a body of persons corporate or unincorporate, but without having a
controlling interest in that body of persons, may be treated as having
control of it.

(10) An extension under subsection (4) or (7) comes into force when
45published under section 107.

(11) An extension under subsection (7) continues in force until—

(a) the person concerned provides the information or documents
to the satisfaction of the CMA or (as the case may be) appears
as a witness in accordance with the requirements of the CMA;
or

(b) 5the CMA publishes its decision to cancel the extension.

(12) In this section and section 73B, “working day” means any day which
is not—

(a) a Saturday, a Sunday, Good Friday or Christmas Day, or

(b) a day which is a bank holiday in England and Wales.

73B 10Section 73A: supplementary

(1) A period extended under section 73A(4) may also be extended under
section 73A(7), and a period extended under section 73A(7) may also
be extended under section 73A(4).

(2) No more than one extension is possible under section 73A(4).

(3) 15Where a period is extended or further extended under section 73A(4)
or (7), the period as extended or (as the case may be) further
extended is, subject to subsections (4) and (5), to be calculated by
taking the period being extended and adding to it the period of the
extension (whether or not those periods overlap in time).

(4) 20Subsection (5) applies where—

(a) the period within which the CMA must discharge its duty
under section 73A(3) is further extended,

(b) the further extension and at least one previous extension is
made under section 73A(7), and

(c) 25the same days or fractions of days are included in or comprise
the further extension and are included in or comprise at least
one such previous extension.

(5) In calculating the period of the further extension, any days or
fractions of days of the kind mentioned in subsection (4)(c) are to be
30disregarded.

(6) The Secretary of State may by order amend section 73A so as to alter
one or more of the periods for the time being mentioned in the
section.

(7) But no alteration may be made by virtue of subsection (6) which
35results in—

(a) the period mentioned in section 73A(1) exceeding 5 working
days;

(b) the period mentioned in section 73A(2) exceeding 10 working
days;

(c) 40the period mentioned in section 73A(3) exceeding 50 working
days;

(d) the period mentioned in section 73A(4) exceeding 40 working
days.

(8) Before making an order under subsection (6) the Secretary of State
45shall consult the CMA and such other persons as the Secretary of
State considers appropriate.”

8 (1) Section 96 (merger notices) is amended as follows.

(2) In subsection (1), for the words from “of proposed arrangements” to the end
of the subsection substitute “of arrangements or proposed arrangements
which might have resulted or might result in the creation of a relevant
5merger situation.”

(3) In subsection (2) after paragraph (a) (and before the “and” immediately
following it) insert—

“(aa) shall contain the prescribed information;”.

(4) After subsection (2) insert—

“(2A) 10Where the CMA is satisfied that a merger notice meets the
requirements of subsection (2), it shall give notice to that effect to the
person who gave the merger notice.”

(5) Omit subsections (3) and (4).

9 Sections 97 and 98 (period for considering merger notices) are omitted.

10 (1) 15Section 99 (certain functions in relation to merger notices) is amended as
follows.

(2) In subsection (1), for “the period for considering any merger notice begins”
substitute “the initial period (within the meaning of section 34ZA) begins in
relation to the merger notice”.

(3) 20In subsection (5), for “the period for considering any merger notice”
substitute “the initial period (within the meaning of section 34ZA) in relation
to a merger notice”.

11 (1) Section 100 (exceptions to protection given by merger notices) is amended as
follows.

(2) 25In subsection (1)—

(a) in the words before paragraph (a), for “Section 96(3) does not”
substitute “Sections 22(3)(za) and 33(3)(za) do not”,

(b) in those words, for “to the Commission” substitute “under section 22
or (as the case may be) 33”,

(c) 30in paragraph (a), for “the period for considering the merger notice”
substitute “the initial period (within the meaning of section 34ZA) in
relation to the merger notice”,

(d) in paragraph (c), omit the words from “by such time” to the end of
the paragraph, and

(e) 35in paragraph (e), for “the period for considering the merger notice”
substitute “the initial period (within the meaning of section 34ZA) in
relation to the merger notice”.

(3) In subsection (2)—

(a) in paragraph (a), for “section 22, 33 or 45” substitute “section 22 or
4033”, and

(b) in paragraph (b), for “section 96(3) does not” substitute “sections
22(3)(za) and 33(3)(za) do not”.

(4) In subsection (3), for “Section 96(3) does not” substitute “Sections 22(3)(za)
and 33(3)(za) do not”.