Enterprise and Regulatory Reform Bill (HC Bill 61)

(4) In relation to proceedings by virtue of subsection (2), the reference in
section 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) 5Where the CMA becomes under a duty to proceed as mentioned in
subsection (2), references in this Part to a reference under section 131,
so 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
10included in its report by virtue of section 141A(6), it shall not so
proceed without the consent of the Secretary of State.

(7) The 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) 15For the purposes of subsection (7) a proposed alternative way of
proceeding will operate against the public interest only if any
admissible public interest consideration or considerations outweigh
the considerations which have led the CMA to propose proceeding
in that way.

(9) 20In deciding whether to withhold consent under subsection (6), the
Secretary of State shall accept the CMA’s view of what, if the only
relevant 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,
25would be the most appropriate way to proceed.

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

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

(2) 30In subsection (1)(c), for “case” substitute “proposal to accept the
undertaking”.

(3) In 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),
35before subsection (1) insert—

“(A1) Where an intervention notice under subsection 139(1) is in force, the
CMA 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) 40Section 151 (further interaction of intervention notices with general
procedure) is amended as follows.

(2) For 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
45PI reference.”

(3) In subsection (2), for the words from “, the Commission” to the end
substitute “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
5requirements imposed by this Part).”

(4) In subsection (4), for the words from “, the Commission shall” to the end
substitute “, 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
10this Part).”

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

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

23 15In section 155 (undertakings in lieu: procedural requirements), in subsection
(3)(a), at the end insert “or (but for the effect of section 140A(3)) it would
have had power to make and which it would otherwise have intended to
make”.

24 (1) Section 157 (interim undertakings: Part 4) is amended as follows.

(2) 20In subsection (1)(b), after “143(3)” insert “or (as the case may be) 143A(3)”.

(3) In subsection (6)—

(a) in the definition of “pre-emptive action”, for “or (as the case may be)
147(2)” substitute “, 147(2) or (as the case may be) 147A(2)”, and

(b) for the definition of “relevant authority” substitute—

• 25““the relevant authority” means—

  (a)

  in the case of a restricted PI reference or a full
  PI reference, the Secretary of State;

  (b)

  in any other case, the CMA.”

25 In section 158 (interim orders: Part 4), in subsection (1)(b), after “143(3)”
30insert “or (as the case may be) 143A(3)”.

26 In section 159 (final undertakings: Part 4), in subsection (2), after “147” insert
“or (as the case may be) 147A”.

27 (1) Section 160 (order-making power where final undertakings not fulfilled:
Part 4) is amended as follows.

(2) 35In subsection (2), for “or (as the case may be) 147(2)” substitute “, 147(2) or
(as the case may be) 147A(2)”.

(3) In subsection (3), for “or (as the case may be) 147” substitute “or 147 or (as
the case may be) subsections (3) and (4) of section 147A”.

28 In section 161 (final orders: Part 4), in subsection (2), after “147” insert “or (as
40the case may be) 147A”.

29 In section 169 (certain duties of relevant authorities to consult: Part 4), in
subsection (6)—

(a) in the definition of “relevant authority”, at the end insert “or the
Secretary of State”,

(b) in the definition of “relevant decision”, in paragraph (b), after
“appropriate Minister” (in the first place where it occurs) insert
“(other than the Secretary of State acting alone)”, and

(c) also in that definition, after paragraph (b) insert—

“(ba) 5in the case of the Secretary of State, any decision by
the Secretary of State—

(i) to make a reference under section 132;

(ii) to vary under section 135 such a reference;

(iii) in a case where the Secretary of State is
10required to make a reference under section
140A, whether to make a reference under
subsection (5) or (6) of that section; or

(iv) to vary under section 140B a reference made
under section 140A(6).”

30 (1) 15Section 172 (further publicity requirements: Part 4) is amended as follows.

(2) In subsection (1), in paragraph (a), after “section 131” insert “, other than a
reference treated as so made by virtue of section 140A(5)(b)”.

(3) In subsection (2), omit paragraph (d).

(4) In subsection (3)—

(a) 20after paragraph (d) insert—

“(da) any reference made by him under section 140A(5) or
(6);

(db) any variation made by him under section 140B of a
reference under section 140A(6);”, and

(b) 25in paragraph (e), after “147(2)” insert “or (as the case may be)
147A(2)”.

(5) In subsection (7), omit “or (2)(d)”.

(6) In subsection (7A) (inserted by Schedule 12), at the end insert “or (3)(da)”.

(7) In subsection (8), in paragraph (a), after “146(2)” insert “or 146A(2)”.

(8) 30In subsection (10), after “147(2)” insert “or 147A(2)”.

31 In section 177 (excisions from reports: Part 4), in subsection (5), omit “, 143(2)
and (5) to (7), 148(3) to (5)”.

32 (1) Section 183 (interpretation: Part 4) is amended as follows.

(2) In subsection (3), in paragraph (a), for the words before sub-paragraph (i)
35substitute “where the reference is made under section 131 or 132—”.

(3) In that subsection, in paragraph (b)—

(a) for the words before sub-paragraph (i) substitute “where the
reference is a restricted PI reference or a full PI reference—”,

(b) in sub-paragraph (i), after “143(1) or (3)” insert “or (as the case may
40be) 143A(2) or (3)”,

(c) in sub-paragraph (ii), omit “(disregarding the fact that the notice was
given)”,

(d) in sub-paragraph (iii), after “143(1)” insert “or (as the case may be)
143A(2)”,

(e) in sub-paragraph (iv), omit “(disregarding the fact that the notice
was given)”,

(f) for sub-paragraph (v) substitute—

“(v) the Secretary of State has failed to make and
5publish a decision under subsection (2) of
section 146 within the period permitted by
subsection (3) of that section or (as the case
may be) under subsection (2) of section 146A
within the period permitted by subsection (6)
10of that section and the reference is finally
determined under paragraph (a) above;”,

(g) in sub-paragraph (vi), omit “(disregarding the fact that the notice
was given)”,

(h) after sub-paragraph (vi) insert—

“(via) 15the Secretary of State has made no finding at
all under section 146A(2) and the reference is
finally determined under paragraph (a)
above;”,

(i) omit the “or” after sub-paragraph (vii),

(j) 20after sub-paragraph (vii) insert—

“(viia) the Secretary of State has made an adverse
public interest finding under section 146A(2)
but has decided under section 147A(2) neither
to accept an undertaking under section 159
25nor to make an order under section 161;”, and

(k) after sub-paragraph (viii) insert “; or—

(ix) the Secretary of State has made an adverse
public interest finding under section 146A(2)
and has accepted an undertaking under
30section 159 or made an order under section
161.”

(4) In subsection (4)(c), after “(b)(viii)” insert “or (ix)”.

(5) In subsection (5), for “or (vi)” substitute “(vi) or (via)”.

(6) In subsection (6), after “(b)(viii)” insert “and (ix)”.

33 (1) 35Section 184 (index of defined expressions in Part 4) is amended as follows.

(2) After the entry in the table for “Adverse effect on competition” insert—

(3) After the entry in the table for “Final determination of market investigation
reference” insert—

(4) After the entry in the table for “Public interest consideration being finalised”

insert—

(5) Before the entry in the table for “subordinate legislation” insert—

Section 29(8)

5SCHEDULE 11 Markets: investigation powers

Enforcement of investigation powers

1 After section 174 of the 2002 Act insert—

“174A Enforcement of powers under section 174: general

(1) 10Where the CMA considers that a person has, without reasonable
excuse, failed to comply with any requirement of a notice under
section 174, it may impose a penalty in accordance with section 174D.

(2) The CMA may proceed (whether at the same time or at different
times) under subsection (1) and section 138A(3) in relation to the
15same failure.

(3) Where the CMA considers that a person has intentionally obstructed
or delayed another person in the exercise of its powers under section
174(7), it may impose a penalty in accordance with section 174D.

(4) A person commits an offence if the person intentionally alters,
20suppresses or destroys any document which the person has been
required to produce by a notice under section 174.

(5) But a person does not commit an offence under subsection (4) in
relation to any act which constitutes a failure to comply with a notice
under section 174 if the CMA has proceeded against the person
25under subsection (1) in relation to that failure.

(6) A person who commits an offence under subsection (4) is liable—

(a) on summary conviction, to a fine not exceeding the statutory
maximum;

(b) on conviction on indictment, to imprisonment for a term not
30exceeding 2 years or to a fine or to both.

(7) The CMA shall not proceed against a person under subsection (1) in
relation to an act which constitutes an offence under subsection (4) if
that person has been found guilty of that offence.

(8) In deciding whether and, if so, how to proceed under subsection (1)
35or (3) or section 138A(3), the CMA shall have regard to the statement
of policy which was most recently published under section 174E at

the time the failure or (as the case may be) the obstruction or delay
concerned occurred.

(9) In this section—

(a) the reference to the production of a document includes a
5reference to the production of a legible and intelligible copy
of information recorded otherwise than in legible form; and

(b) the reference to suppressing a document includes a reference
to destroying the means of reproducing information
recorded otherwise than in legible form.

174B 10Restriction on powers to impose penalties under section 174A

(1) No penalty shall be imposed by virtue of section 174A(1) or (3) if
more than 4 weeks have passed since the day which is the relevant
day in the case in question; but this subsection shall not apply in
relation to any variation or substitution of the penalty which is
15permitted by virtue of this Part.

(2) In the following provisions of this section, “the section 174 power”
means the power under section 174 to which the failure or (as the
case may be) the obstruction or delay in question relates.

(3) Where the section 174 power is exercised for the purpose mentioned
20in section 174(1)(a), the relevant day is the day when the CMA finally
concludes the carrying out of its section 5 functions.

(4) Where the section 174 power is exercised in connection with an
enforcement function (within the meaning of that section), the
relevant day is the day when the enforcement undertaking
25concerned is superseded or released or (as the case may be) the
enforcement order concerned is revoked.

(5) Except where subsection (3) or (4) applies, the relevant day is the day
determined in accordance with the following provisions of this
section.

(6) 30Where the section 174 power is exercised for the purpose mentioned
in section 174(1)(b) in connection with a matter that is the subject of
a possible reference under section 131, the relevant day is the day
when the CMA finally decides whether to make the reference.

(7) Where the section 174 power is exercised for the purpose mentioned
35in section 174(1)(b) in connection with a matter that is the subject of
a reference under section 131 or 132, the relevant day is the day when
the reference is finally determined (see section 183).

(8) Where the section 174 power is exercised for the purpose mentioned
in section 174(1)(c) in connection with a matter that is the subject of a
40possible reference under section 140A(5) or (6), the relevant day is
the day when the Secretary of State makes the reference.

(9) Where the section 174 power is exercised for the purpose mentioned
in section 174(1)(c) in connection with a matter that is the subject of a
reference under section 140A(6), the relevant day is the day when the
45reference is finally determined (see section 183).

174C Section 174B: supplementary provision

(1) For the purpose of section 174B(3), the CMA finally concludes the
carrying out of its section 5 functions if—

(a) the CMA publishes the market study report under section
5131B(4) or (as the case may be) gives it to the Secretary of
State under section 140A(3)(b); or

(b) the period permitted for the preparation by the CMA of the
market study report and for the report to be published under
section 131B(4) or (as the case may be) given to the Secretary
10of State under section 140A(3)(b) expires and no such report
has been so prepared or no such action has been taken.

(2) For the purpose of section 174B(3), the time when the CMA finally
concludes the carrying out of its section 5 functions is—

(a) in a case falling within subsection (1)(a), the publication of
15the report or (as the case may be) the giving of it to the
Secretary of State;

(b) in a case falling within subsection (1)(b), the expiry of the
period concerned.

(3) For the purpose of section 174B(6), the CMA finally decides whether
20to make a reference under section 131 if—

(a) the CMA makes such a reference;

(b) the CMA accepts an undertaking under section 154 instead of
making such a reference;

(c) the CMA publishes notice that it has otherwise decided not to
25make such a reference; or

(d) the period permitted for the preparation by the CMA of a
market study report in relation to the matter and for the
report to be published under section 131B(4) has expired and
no such report has been so prepared or published.

(4) 30For the purpose of section 174B(6), the time when the CMA finally
decides whether to make a reference under section 131 is—

(a) in a case falling within subsection (2)(a), the making of the
reference;

(b) in a case falling within subsection (2)(b), the acceptance of the
35undertaking concerned;

(c) in a case falling within subsection (2)(c), the publication of the
notice concerned;

(d) in a case falling within subsection (2)(d), the expiry of the
period concerned.

(5) 40In subsection (4)(b) 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
undertakings which vary, supersede or revoke earlier undertakings
45shall be disregarded for the purposes of subsections (2)(b) and
(4)(b).”

174D Penalties

(1) A penalty imposed under section 174A(1) or (3) shall be of such
amount as the CMA considers appropriate.

(2) In the case of a penalty imposed under section 174A(1), the amount
5may be—

(a) a fixed amount;

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

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

(3) 10In the case of a penalty imposed under section 174A(3), the amount
shall be a fixed amount.

(4) A penalty imposed under section 174A(1) shall not—

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

(b) 15in 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; and

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

(5) A penalty imposed under section 174A(3) shall not exceed such
amount as the Secretary of State may by order specify.

(6) An order under subsection (4) or (5) shall not specify—

(a) in the case of a fixed amount, an amount exceeding £30,000;

(b) 25in the case of an amount calculated by reference to a daily
rate, an amount per day exceeding £15,000; and

(c) in the case of a fixed amount and an amount calculated by
reference to a daily rate, a fixed amount exceeding £30,000
and an amount per day exceeding £15,000.

(7) 30Before making an order under subsection (4) or (5), the Secretary of
State shall consult—

(a) the CMA; and

(b) such other persons as the Secretary of State considers
appropriate.

(8) 35In imposing a penalty by reference to a daily rate—

(a) no account is to be taken of any days before the service on the
person concerned of notice of the penalty under section 112
(as applied by subsection (10)); and

(b) unless the CMA determines an earlier date (whether before
40or after the penalty is imposed), the amount payable ceases to
accumulate at the beginning of the earliest of the days
mentioned in subsection (9).

(9) Those days are—

(a) the day on which the requirement of the notice concerned
45under section 174 is satisfied;

(b) the day which is the relevant day in the case in question for
the purposes of section 174B.

(10) Sections 112 to 115 apply in relation to a penalty imposed under
section 174A(1) or (3) as they apply in relation to a penalty imposed
under section 110(1) or (3).

174E Statement of policy on penalties

(1) 5The CMA shall prepare and publish a statement of policy in relation
to the enforcement of notices given under section 174.

(2) The statement shall, in particular, include a statement about the
considerations relevant to the determination of the nature and
amount of any penalty imposed under section 174A(1) or (3).

(3) 10The CMA may revise its statement of policy and, where it does so, it
shall publish the revised statement.

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

Investigation powers: miscellaneous consequential amendments

2 15Part 4 of the 2002 Act (market investigations) is amended as follows.

3 Omit section 175 (enforcement of powers under section 174: offences).

4 Omit section 176 (investigation powers of the Commission).

5 In section 179 (review of decisions under Part 4), in subsection (2)(a), for
“section 110(1) or (3) as applied by section 176” substitute “section 174A(1)
20or (3)”.

6 (1) Section 181 (orders under Part 4) is amended as follows.

(2) In subsection (4), for the words from “or 161,” to “section 176” substitute “,
161, 174D(4) or (5), or under section 114(3)(b) or (4)(b) as applied by section
174D”.

(3) 25In subsection (10)—

(a) omit “111(4) or (6) or”, and

(b) for “176” substitute “174D”.

Section 31

SCHEDULE 12 Markets: time-limits

30Market studies and decisions whether to make a reference under section 131

1 Before section 131 of the 2002 Act (power to make market investigation
references) insert—

“Market studies

130A Duty to publish market study notice

(1) 35Where the CMA is proposing to carry out its functions under section
5 in relation to a matter for the purposes mentioned in subsection (2),

the CMA must publish a notice under this section (referred to in this
Part as a “market study notice”).

(2) The purposes are—

(a) to consider the extent to which a matter in relation to the
5acquisition or supply of goods or services of one or more than
one description in the United Kingdom has or may have
effects adverse to the interests of consumers; and

(b) to assess the extent to which steps can and should be taken to
remedy, mitigate or prevent any such adverse effects.

(3) 10A market study notice shall, in particular, specify—

(a) the matter in relation to which the CMA is proposing to carry
out its functions under section 5;

(b) the period during which representations may be made to the
CMA in relation to the matter; and

(c) 15the dates by which the CMA is required to comply with the
requirements imposed on it by sections 131A and 131B.”

2 After section 131 of that Act insert—

“131A Decisions about references under section 131: consultation

(1) This section applies to a case where the CMA has published a market
20study notice and—

(a) the CMA is proposing to make a reference under section 131
in relation to the matter specified in the notice; or

(b) a representation has been made to the CMA within the period
specified in the notice under section 130A(3)(b) to the effect
25that such a reference should be made but the CMA is
proposing not to make such a reference.

(2) The CMA shall—

(a) publish notice of the proposal concerned; and

(b) consult the relevant persons about the proposal, in such
30manner as it considers practicable, before deciding whether
to make a reference.

(3) The CMA may, for the purposes of subsection (1), ignore any
representation which it considers to be frivolous or vexatious.

(4) For the purposes of subsection (2), a person is a “relevant person” if
35the CMA considers that its decision whether to make a reference is
likely to have a substantial impact on the person’s interests.

(5) In consulting a person for the purposes of this section, the CMA
shall, so far as practicable, give its reasons for the proposal.

(6) In considering what is practicable for the purposes of this section, the
40CMA shall, in particular, have regard to—

(a) the restrictions imposed by the time-table for making the
decision (see section 131B); and

(b) any need to keep what is proposed, or the reasons for it,
confidential.