Enterprise and Regulatory Reform Bill

Session 2012 - 13
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Other Bills before Parliament

Enterprise and Regulatory Reform Bill

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
29

(5)
The terms and conditions of appointment of a public interest expert
(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
5
reference concerned.
(7)
Before 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.
10
Investigation powers
30
Investigation 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
15
following—
(a)
assisting 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
20
enforcement functions, exercisable by it under or by virtue of
this 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
25
functions, including enforcement functions, of the CMA or (as
the 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).
30
(2)
The CMA may exercise any of the powers in subsections (3) to (5) for a
permitted 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
35
(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.”
40
(5)
In subsection (7), for “the purpose mentioned in subsection (1)” substitute “a
permitted purpose”.

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 2 — Markets
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(6)
After subsection (9) insert—
“(9A)
In subsection (1), “enforcement functions” means—
(a)
in relation to the CMA—
(i)
functions conferred by virtue of section 164(2)(b) on the
CMA by enforcement orders;
5
(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)
functions of the CMA under or by virtue of section 160
or 162 in relation to enforcement undertakings or
10
enforcement orders;
(b)
in relation to the Secretary of State—
(i)
functions conferred by virtue of section 164(2)(b) on the
Secretary of State by enforcement orders;
(ii)
functions of the Secretary of State in relation to the
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variation, supersession or release of enforcement
undertakings or the variation or revocation of
enforcement orders;
(iii)
functions of the Secretary of State under or by virtue of
section 160 in relation to enforcement undertakings or
20
enforcement orders.”
(7)
For the heading substitute “Attendance of witnesses and production of
documents etc.”.
(8)
Schedule 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
25
consequential amendments of that Act) has effect.
Interim measures
31
Interim measures: pre-emptive action: markets
(1)
Part 4 of the 2002 Act (market investigations) is amended as follows.
(2)
In section 157 (interim undertakings: Part 4), after subsection (2) insert—
30
“(2A)
Subsection (2B) applies where—
(a)
subsection (1)(a) to (c) applies; and
(b)
the relevant authority has reasonable grounds for suspecting
that pre-emptive action has or may have been taken.
(2B)
The relevant authority may, for the purpose of restoring the position to
35
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
persons as the relevant authority considers appropriate, undertakings
to take such action as the relevant authority considers appropriate.”
(3)
After subsection (2B) of that section insert—
40
“(2C)
A person may, with the consent of the relevant authority, take action of
a particular description where the action would otherwise constitute a
contravention of an undertaking accepted under this section.”

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 3 — Anti-trust
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(4)
In section 158 (interim orders: 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
that pre-emptive action has or may have been taken.
5
(2B)
The relevant authority 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)
impose such other obligations, prohibitions or restrictions as it
10
considers appropriate for that purpose.”
(5)
After subsection (2B) of that section insert—
“(2C)
A person may, with the consent of the relevant authority, take action of
a particular description where the action would otherwise constitute a
contravention of an order under this section.”
15
Time-limits and procedure
32
Market studies and market investigations: consultation and time-limits
Schedule 12 (which makes provision about consultation in relation to decisions
whether to make a market investigation reference and about time-limits in
relation to the conduct of market studies and the markets investigation
20
reference regime under Part 4 of the 2002 Act) has effect.
Chapter 3
Anti-trust
Investigation powers
33
Investigations: power to ask questions
25
(1)
Part 1 of the Competition Act 1998 (“the 1998 Act”) (competition) is amended
as follows.
(2)
After section 26 (powers when conducting investigations) insert—
“26A
Investigations: power to ask questions
(1)
For the purposes of an investigation, the CMA may give notice to an
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individual who has a connection with a relevant undertaking requiring
the individual to answer questions with respect to any matter relevant
to the investigation—
(a)
at a place specified in the notice, and
(b)
either at a time so specified or on receipt of the notice.
35
(2)
The CMA must give a copy of the notice under subsection (1) to each
relevant undertaking with which the individual has a current
connection at the time the notice is given to the individual.

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 3 — Anti-trust
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(3)
The CMA must take such steps as are reasonable in all the
circumstances to comply with the requirement under subsection (2)
before the time at which the individual is required to answer questions.
(4)
Where the CMA does not comply with the requirement under
subsection (2) before the time mentioned in subsection (3), it must
5
comply with that requirement as soon as practicable after that time.
(5)
A notice under subsection (1) must be in writing and must indicate—
(a)
the subject matter and purpose of the investigation, and
(b)
the nature of the offence created by section 44.
(6)
For the purposes of this section—
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(a)
an individual has a connection with an undertaking if he or she
is or was—
(i)
concerned in the management or control of the
undertaking, or
(ii)
employed by, or otherwise working for, the
15
undertaking, and
(b)
an individual has a current connection with an undertaking if,
at the time in question, he or she is so concerned, is so employed
or is so otherwise working.
(7)
In this section, a “relevant undertaking” means an undertaking whose
20
activities are being investigated as part of the investigation in
question.”
(3)
For the heading of section 26 substitute “Investigations: powers to require
documents and information”.
(4)
Section 30A (use of statements in prosecution) is amended as follows.
25
(5)
The existing text becomes subsection (1).
(6)
In subsection (1), for “26 to 28A” substitute “26 and 27 to 28A”.
(7)
After that subsection insert—
“(2)
A statement by an individual in response to a requirement imposed by
virtue of section 26A (a “section 26A statement”) may only be used in
30
evidence against the individual—
(a)
on a prosecution for an offence under section 44, or
(b)
on a prosecution for some other offence in a case falling within
subsection (3).
(3)
A prosecution falls within this subsection if, in the proceedings—
35
(a)
in giving evidence, the individual makes a statement
inconsistent with the section 26A statement, and
(b)
evidence relating to the section 26A statement is adduced, or a
question relating to it is asked, by or on behalf of the individual.
(4)
A section 26A statement may not be used in evidence against an
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undertaking with which the individual who gave the statement has a
connection on a prosecution for an offence unless the prosecution is for
an offence under section 44.
(5)
For the purposes of subsection (4), an individual has a connection with
an undertaking if he or she is or was—
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Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 3 — Anti-trust
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(a)
concerned in the management or control of the undertaking, or
(b)
employed by, or otherwise working for, the undertaking.”
34
Civil enforcement of investigation powers
(1)
Part 1 of the 1998 Act (competition) is amended as follows.
(2)
After section 40 insert—
5
“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
under section 26, 26A, 27, 28 or 28A, it may impose a penalty of such
10
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)
a combination of a fixed amount and an amount calculated by
15
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)
in the case of an amount calculated by reference to a daily rate,
20
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
amount per day as the Secretary of State may so specify.
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(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)
In imposing a penalty by reference to a daily rate—
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(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
after the penalty is imposed), the amount payable ceases to
35
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)
the day on which the CMA makes a decision (within the
40
meaning given by section 31(2)) or terminates the investigation
in question without making such a decision;

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Part 4 — Competition Reform
Chapter 3 — Anti-trust
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(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)
Before making an order under subsection (3), the Secretary of State
5
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 they apply in relation to a penalty imposed
10
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
15
considerations 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
20
preparing 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
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CMA 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.
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(4)
In 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
35
a 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”.
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