Enterprise and Regulatory Reform Bill (HC Bill 61)

(3B) The CMA may by order, for the purpose of restoring the position to
what it would have been had the pre-emptive action not been taken or
otherwise for the purpose of mitigating its effects—

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

(b) 5impose such other obligations, prohibitions or restrictions as it
considers appropriate for that purpose.”

(6) After subsection (3B) insert—

“(3C) A person may, with the consent of the CMA, take action or action of a
particular description where the action would otherwise constitute a
10contravention of an order under this section.”

(7) In subsection (6), in each of paragraphs (a) and (d), after “section 22” insert “or
33”.

(8) After subsection (7) insert—

“(8) In this section “pre-emptive action” means action which might
15prejudice the reference concerned or impede the taking of any action
under this Part which may be justified by the CMA’s decisions on the
reference.”

(9) In the heading for “completed mergers” substitute “completed or anticipated
mergers”.

(10) 20Schedule 7 (which makes further provision about interim measures under Part
3 of the 2002 Act) has effect.

24 Interim measures: financial penalties: mergers

(1) After section 94 of the 2002 Act (rights to enforce undertakings and orders
under Part 3) insert—

“94A 25 Interim undertakings and orders under this Part: penalties

(1) Where the appropriate authority considers that a person has, without
reasonable excuse, failed to comply with an interim measure, it may
impose a penalty of such fixed amount as it considers appropriate.

(2) A penalty imposed under subsection (1) shall not exceed 5% of the total
30value of the turnover (both in and outside the United Kingdom) of the
enterprises owned or controlled by the person on whom it is imposed.

(3) For the purposes of subsection (2), the Secretary of State may by order
make provision for determining—

(a) when an enterprise is to be treated as controlled by a person;
35and

(b) the turnover (both in and outside the United Kingdom) of an
enterprise.

(a)(a)when an enterprise is to be treated as controlled by a person;
and

(b) 40the turnover (both in and outside the United Kingdom) of an
enterprise.

(4) An order under subsection (3)(b) may, in particular, make provision as
to—

(a) the amounts which are, or which are not, to be treated as
45comprising an enterprise’s turnover;

(b) the date or dates by reference to which an enterprise’s turnover
is to be determined.

(5) An order under subsection (3) may, in particular, make provision
enabling the appropriate authority to determine matters of a
description specified in the order (including any of the matters
mentioned in paragraphs (a) and (b) of subsection (4)).

(6) 5The Secretary of State may by order amend subsection (2) so as to alter
the percentage for the time being mentioned there to any percentage
not exceeding 5%.

(7) Sections 112 to 115 apply in relation to a penalty imposed under
subsection (1) as they apply in relation to a penalty of a fixed amount
10imposed under section 110(1), with the modification that any reference
in those provisions to the CMA is to be read as a reference to the person
who imposed the penalty under this section.

(8) In this section—

• “interim measure” means—

  (a)

  15an undertaking under section 80, or

  (b)

  an order under section 72 or 81 or paragraph 2 of
  Schedule 7;

• “appropriate authority” means—

• (a)

  in relation to an interim measure which is an order made
  20by the Secretary of State under paragraph 2 of Schedule
  7, the Secretary of State;

  (b)

  in relation to any other interim measure, the CMA.

94B Statement of policy in relation to powers under sections 94 and 94A

(1) The CMA shall prepare and publish a statement of policy in relation to
25the use of its powers under—

(a) section 94, insofar as they relate to interim measures; and

(b) section 94A.

(2) The CMA shall, in particular, include a statement about the
considerations relevant to the determination of the amount of any
30penalty imposed under section 94A.

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

(4) The CMA shall consult the Secretary of State and such other persons as
it considers appropriate when preparing or revising its statement of
35policy.

(5) A statement or revised statement of policy may not be published under
this section unless the Secretary of State approves the statement.

(6) In this section, “interim measure” has the same meaning as in section
94A.”

(2) 40In section 120 of that Act (review of decisions under Part 3), in subsection (2)(a),
for “section 110(1) or (3)” substitute “section 94A(1) or 110(1) or (3)”.

(3) In section 124 of that Act (orders and regulations under Part 3)—

(a) in subsection (4), before “or 102” insert “, 94A(6)”, and

(b) in subsection (5), before “114(4) or (6),” insert “94A(3) or (6),”.

Time-limits

25 Time-limits etc: mergers

(1) In section 103 of the 2002 Act (duty of expedition in relation to references), in
subsection (1), for the words from the beginning to “the OFT” substitute “In
5making any decision for the purposes of its functions of making and
determining references under this Part, the CMA”.

(2) Schedule 8 (which makes provision about time-limits in relation to the mergers
reference regime under Part 3 of the 2002 Act) has effect.

CHAPTER 2 Markets

10Cross-market investigations

26 Power of CMA to make cross-market references

(1) Section 131 of the 2002 Act (power to make market investigation references) is
amended as follows.

(2) After subsection (2) insert—

“(2A) 15In a case where the feature or each of the features concerned falls within
subsection (2)(b) or (c), a reference under subsection (1) may be made
in relation to more than one market in the United Kingdom for goods
or services.”

(3) In subsection (4)(a), for “section 156(1)” substitute “section 156(A1) or (1)”.

(4) 20In subsection (6)—

(a) before the definition of “market in the United Kingdom” insert—

• ““cross-market reference” means a reference under this
  section which falls within subsection (2A) or a reference
  under section 132 which falls within subsection (3A) of
  25that section (and see section 140A);”, and

(b) after the definition of “market investigation reference” insert—

• ““ordinary reference” means a reference under this section
  or section 132 which is not a cross-market reference (and
  see section 140A);”.

27 30Ministerial power to make cross-market references

(1) Section 132 of the 2002 Act (ministerial power to make market investigation
references) is amended as follows.

(2) After subsection (3) insert—

“(3A) In a case where the feature or each of the features concerned falls within
35section 131(2)(b) or (c), a reference under subsection (3) may be made in
relation to more than one market in the United Kingdom for goods or
services.”

(3) In subsection (4), for “section 156(1)” substitute “section 156(A1) or (1)”.

(4) Schedule 9 (which contains amendments of Part 4 of the 2002 Act which are
consequential on section 26 and this section) has effect.

Public interest interventions

28 Public interest interventions in markets investigations

(1) 5Part 4 of the 2002 Act (market investigations) is amended as follows.

(2) Section 139 (power of Secretary of State to give public interest intervention
notices) is amended as follows.

(3) For subsection (1) substitute—

“(A1) This section applies where—

(a) 10the CMA has published a market study notice in relation to a
matter; or

(b) the CMA has begun the process of consultation under section
169 in respect of a decision of the kind mentioned in subsection
(6)(a)(i) of that section.

(1) 15The Secretary of State may, within the permitted period, give a notice
to the CMA if the Secretary of State believes that it is or may be the case
that one or more than one public interest consideration is relevant to the
matter.

(1A) For the purposes of subsection (1), the permitted period, in a case to
20which this section applies by virtue of paragraph (a) of subsection (A1),
is the period beginning with the publication of the market study notice
and ending with—

(a) the acceptance by the CMA of an undertaking under section 154
instead of the making of a reference under section 131 in
25relation to the matter;

(b) the publication of notice of the fact that the CMA has otherwise
decided not to make such a reference in relation to the matter;

(c) the making of such a reference in relation to the matter; or

(d) in a case where the period permitted by section 131B for the
30preparation and publication by the CMA of the market study
report in relation to the matter has expired and no such report
has been prepared or published, the end of that period.

(1B) For the purposes of subsection (1), the permitted period, in a case to
which this section applies by virtue of paragraph (b) of subsection (A1),
35is the period beginning with the date on which the CMA begins the
process of consultation concerned and ending with—

(a) the acceptance by the CMA of an undertaking under section 154
instead of the making of a reference under section 131 in
relation to the matter concerned;

(b) 40the publication of notice of the fact that the CMA has otherwise
decided not to make such a reference in relation to the matter; or

(c) the making of such a reference in relation to the matter.”

(4) In subsection (2)—

(a) in the words before paragraph (a), after “may” insert “, within the
45permitted period,”,

(b) in paragraph (a)(i), after “131” insert “in relation to the matter”, and

(c) in paragraph (c), for “case” (in the second place where it occurs)
substitute “proposal to accept the undertaking”.

(5) After subsection (2) insert—

“(2A) 5For the purposes of subsection (2), the permitted period is—

(a) where the CMA publishes a notice under section 155(1), the
period within which representations may be made in relation to
the proposed undertaking (as to which, see section 155(2)(f));

(b) where the CMA publishes a notice under section 155(4), the
10period within which representations may be made in relation to
the proposed modifications to the proposed undertaking (as to
which, see section 155(5)(c)).”

(6) For subsection (4) substitute—

“(4) No more than one intervention notice shall be given under subsection
15(1) in relation to the same matter.

(4A) An intervention notice shall not be given under subsection (2) in
relation to a proposal to accept an undertaking if the proposal relates to
a matter in respect of which an intervention notice under subsection (1)
has already been given.

(4B) 20No more than one intervention notice shall be given under subsection
(2) in relation to the same proposed undertaking or in relation to
proposed undertakings which do not differ from each other in any
material respect.”

(7) After subsection (4B) insert—

“(4C) 25In this section, a reference to the acceptance of an undertaking 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 shall be disregarded for the purposes of
30this section.”

(8) After section 140 insert—

“140A Section 139(1) intervention notices: Secretary of State’s duty to refer

(1) This section applies where—

(a) the CMA has prepared a market study report in relation to a
35matter within the period permitted by section 131B(4);

(b) an intervention notice under section 139(1) is in force in relation
to the matter at the time when the CMA would (but for this
section) be required to publish the report; and

(c) the report contains the decision of the CMA that it should make
40an ordinary reference or a cross-market reference in relation to
the matter under section 131.

(2) This section also applies where—

(a) the CMA has conducted a consultation under section 169 in
respect of a decision of the kind mentioned in subsection
45(6)(a)(i) of that section;

(b) the CMA has decided that it should make an ordinary reference
or a cross-market reference in relation to the matter concerned
under section 131; and

(c) an intervention notice under section 139(1) is in force in relation
5to the matter at the time when the CMA makes that decision.

(3) The CMA—

(a) shall not exercise the power under section 131 to refer the
matter;

(b) in a case falling within subsection (1), shall not publish the
10market study report under section 131B(4) and shall instead,
within the period mentioned in section 131B(4), give the report
to the Secretary of State; and

(c) in a case falling within subsection (2), shall give to the Secretary
of State a document containing—

(i) 15its decision and the reasons for its decision; and

(ii) such information as the CMA considers appropriate for
facilitating a proper understanding of the reasons for its
decision.

(4) The Secretary of State shall decide whether any public interest
20consideration which was mentioned in the intervention notice is
relevant to the matter in question.

(5) Where the Secretary of State decides that there is no relevant public
interest consideration—

(a) the Secretary of State shall (in accordance with the CMA’s
25decision) make a reference in relation to the matter to the chair
of the CMA for the constitution of a group under Schedule 4 to
the Enterprise and Regulatory Reform Act 2012; and

(b) the reference is to be treated for the purposes of this Part as an
ordinary reference or (as the case may be) a cross-market
30reference made under section 131 in accordance with the
requirements imposed by this Part.

(6) Where the Secretary of State decides that there is one or more than one
relevant public interest consideration, the Secretary of State shall (in
accordance with the CMA’s decision) make a reference in relation to
35the matter to the chair of the CMA for the constitution of a group under
Schedule 4 to the Enterprise and Regulatory Reform Act 2012.

(7) The Secretary of State shall specify in a reference made under
subsection (6)—

(a) the relevant public interest consideration or considerations; and

(b) 40whether the reference is a restricted PI reference or a full PI
reference (as to which, see sections 141 and 141A respectively).

(8) Where the Secretary of State makes a full PI reference under subsection
(6), the reference shall also specify whether the Secretary of State
proposes to appoint a public interest expert under section 141B.

(9) 45For the purposes of this Part, a reference under subsection (6) is to be
treated—

(a) in a case where the decision of the CMA was that it should make
an ordinary reference, as an ordinary reference;

(b) in a case where the decision of the CMA was that it should make
a cross-market reference, as a cross-market reference.

(10) In a case falling within subsection (1), the Secretary of State shall
publish the market study report concerned at the same time as the
5Secretary of State makes a reference under this section.

(11) In a case falling within subsection (2), the Secretary of State shall
publish the document given to the Secretary of State by the CMA under
subsection (3)(c), at the same time as the Secretary of State makes a
reference under this section.

(12) 10In this Part—

• “full PI reference” means a reference made by the Secretary of
  State under subsection (6) which specifies that it is a full PI
  reference;

• “restricted PI reference” means a reference made by the Secretary
  15of State under subsection (6) which specifies that it is a restricted
  PI reference.”

(9) After section 141 insert—

“141A Full PI references: questions to be decided by CMA

(1) This section applies where the Secretary of State makes a full PI
20reference.

(2) The CMA shall, on an ordinary reference, decide whether any feature,
or combination of features, of each relevant market (within the
meaning given by section 134(3)) prevents, restricts or distorts
competition in connection with the supply or acquisition of any goods
25or services in the United Kingdom or a part of the United Kingdom.

(3) The 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,
30prevents, restricts or distorts competition in connection with the supply
or acquisition of any goods or services in the United Kingdom or a part
of the United Kingdom.

(4) The CMA shall, if it has decided that there is an adverse effect on
competition, decide whether, taking account only of any adverse effect
35on competition and the admissible public interest consideration or
considerations concerned, 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.

(5) The CMA shall, if it has decided that any such feature or combination
40of features operates or may be expected to operate against the public
interest, also decide separately the following additional questions—

(a) whether action should be taken by the Secretary of State under
section 147A for the purpose of remedying, mitigating or
preventing any of the effects adverse to the public interest
45concerned;

(b) whether the CMA should recommend the taking of other action
by the Secretary of State, or action by persons other than itself
and the Secretary of State, for the purpose of remedying,

mitigating or preventing any of the effects adverse to the public
interest concerned; and

(c) in either case, if action should be taken, what action should be
taken and what is to be remedied, mitigated or prevented.

(6) 5The CMA shall, if it has decided that there is an adverse effect on
competition, also decide separately the following questions (on the
assumption that it is proceeding as mentioned in section 148A(2))—

(a) whether action should be taken by it under section 138 for the
purpose of remedying, mitigating or preventing the adverse
10effect on competition concerned or any detrimental effect on
customers so far as it has resulted from, or may be expected to
result from, the adverse effect on competition;

(b) whether the CMA should recommend the taking of action by
other persons for the purpose of remedying, mitigating or
15preventing the adverse effect on competition concerned or any
detrimental effect on customers so far as it has resulted from, or
may be expected to result from, the adverse effect on
competition; and

(c) in either case, if action should be taken, what action should be
20taken and what is to be remedied, mitigated or prevented.

(7) In a case where the Secretary of State has appointed a public interest
expert under section 141B in relation to a full PI reference, the CMA
shall, in deciding the questions mentioned in subsections (4) and (5),
have regard, in particular, to the views of the expert.

(8) 25In deciding the questions mentioned in subsection (5), the CMA shall,
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 interest
concerned; and

(b) 30any detrimental effects on customers so far as resulting from
those effects.

(9) In deciding the questions mentioned in subsection (6), the CMA shall,
in particular, have regard to—

(a) the need to achieve as comprehensive a solution as is reasonable
35and practicable to the adverse effect on competition concerned;
and

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

(10) In deciding the questions mentioned in subsections (5) and (6), the
CMA may, in particular, have regard to the effect of any action on any
40relevant customer benefits of the feature or features of the market or
markets concerned.

(11) In this section, “admissible public interest consideration” means any
public interest consideration specified in the reference concerned and
which the CMA is not under a duty to disregard.

141B 45 Full PI references: power of Secretary of State to appoint expert

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

(2) The Secretary of State may appoint one or more than one person to
advise the CMA on the questions mentioned in subsections (4) and (5)
of section 141A in relation to the reference.

(3) A person so appointed shall be a person who appears to the Secretary
5of State to have particular knowledge of, or expertise in, matters
relating to a public interest consideration specified in the reference.

(4) Each person so appointed is referred to in this Part as a “public interest
expert”.

(5) The terms and conditions of appointment of a public interest expert
10(including, in particular, as to remuneration) are to be determined by
the Secretary of State.

(6) Any appointment of a public interest expert under this section shall be
made within the period of 2 months beginning with the date of the
reference concerned.

(7) 15Before appointing a public interest expert the Secretary of State shall
consult the chair of the CMA.”

(10) Schedule 10 (which contains amendments of Part 4 of the 2002 Act which are
consequential on or otherwise related to this section) has effect.

Investigation powers

29 20Investigation powers: markets

(1) Section 174 of the 2002 Act (investigation powers) is amended as follows.

(2) For subsections (1) and (2) substitute—

“(1) For the purposes of this section, the permitted purposes are the
following—

(a) 25assisting the CMA in carrying out its functions under section 5
in relation to a matter in a case where it has published a market
study notice;

(b) assisting the CMA in carrying out any functions, including
enforcement functions, exercisable by it under or by virtue of
30this Part in connection with a matter that is or has been the
subject of a reference under section 131 or 132 or possible
reference under section 131;

(c) assisting the CMA or the Secretary of State in carrying out any
functions, including enforcement functions, of the CMA or (as
35the case may be) the Secretary of State under or by virtue of this
Part in connection with a matter that is or has been the subject
of a reference under section 140A(6) or possible reference under
section 140A(5) or (6).

(2) The CMA may exercise any of the powers in subsections (3) to (5) for a
40permitted purpose.”

(3) In subsection (6), after “shall” insert “—

(a) specify the permitted purpose for which the notice is given,
including the function or functions in question; and

(b)”.

(4) After subsection (6) insert—

“(6A) The CMA or any person nominated by it for the purpose may, for a
permitted purpose, take evidence on oath and for that purpose may
administer oaths.”

(5) 5In subsection (7), for “the purpose mentioned in subsection (1)” substitute “a
permitted purpose”.

(6) After subsection (9) insert—

“(9A) In subsection (1), “enforcement functions” means—

(a) in relation to the CMA—

(i) 10functions conferred by virtue of section 164(2)(b) on the
CMA by enforcement orders;

(ii) functions of the CMA in relation to the variation,
supersession or release of enforcement undertakings or
the variation of revocation of enforcement orders;

(iii) 15functions of the CMA under or by virtue of section 160
or 162 in relation to enforcement undertakings or
enforcement orders;

(b) in relation to the Secretary of State—

(i) functions conferred by virtue of section 164(2)(b) on the
20Secretary of State by enforcement orders;

(ii) functions of the Secretary of State in relation to the
variation, supersession or release of enforcement
undertakings or the variation or revocation of
enforcement orders;

(iii) 25functions of the Secretary of State under or by virtue of
section 160 in relation to enforcement undertakings or
enforcement orders.”

(7) For the heading substitute “Attendance of witnesses and production of
documents etc.”.

(8) 30Schedule 11 (which makes provision about the enforcement of the powers
under section 174 of the 2002 Act, as amended by this section, and which makes
consequential amendments of that Act) has effect.

Interim measures

30 Interim measures: pre-emptive action: markets

(1) 35Part 4 of the 2002 Act (market investigations) is amended as follows.

(2) In section 157 (interim undertakings: Part 4), after subsection (2) insert—

“(2A) Subsection (2B) applies where—

(a) subsection (1)(a) to (c) applies; and

(b) the relevant authority has reasonable grounds for suspecting
40that pre-emptive action has or may have been taken.

(2B) The relevant authority may, for the purpose of restoring the position to
what it would have been had the pre-emptive action not been taken or
otherwise for the purpose of mitigating its effects, accept, from such