Session 2012 - 13
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Enterprise and Regulatory Reform Bill


Enterprise and Regulatory Reform Bill
Schedule 11 — Markets: investigation powers

227

 

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

may be—

5

(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)   

In the case of a penalty imposed under section 174A(3), the amount

10

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)   

in the case of an amount calculated by reference to a daily

15

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

amount per day as the Secretary of State may so specify.

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(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)   

in the case of an amount calculated by reference to a daily

25

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)   

Before making an order under subsection (4) or (5), the Secretary of

30

State shall consult—

(a)   

the CMA; and

(b)   

such other persons as the Secretary of State considers

appropriate.

(8)   

In imposing a penalty by reference to a daily rate—

35

(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

or after the penalty is imposed), the amount payable ceases to

40

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

under section 174 is satisfied;

45

(b)   

the day which is the relevant day in the case in question for

the purposes of section 174B.

 
 

Enterprise and Regulatory Reform Bill
Schedule 12 — Markets: time-limits

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(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)   

The CMA shall prepare and publish a statement of policy in relation

5

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)   

The CMA may revise its statement of policy and, where it does so, it

10

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          

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

15

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)

or (3)”.

20

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)  

In subsection (10)—

25

(a)   

omit “111(4) or (6) or”, and

(b)   

for “176” substitute “174D”.

Schedule 12

Section 38

 

Markets: time-limits

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

30

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)   

Where the CMA is proposing to carry out its functions under section

35

5 in relation to a matter for the purposes mentioned in subsection (2),

 
 

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Schedule 12 — Markets: time-limits

229

 

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

acquisition or supply of goods or services of one or more than

5

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)   

A market study notice shall, in particular, specify—

10

(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)   

the dates by which the CMA is required to comply with the

15

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

study notice and—

20

(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

that such a reference should be made but the CMA is

25

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

manner as it considers practicable, before deciding whether

30

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

the CMA considers that its decision whether to make a reference is

35

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

CMA shall, in particular, have regard to—

40

(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.

 
 

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Schedule 12 — Markets: time-limits

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131B    

Market studies and the making of decisions to refer: time-limits

(1)   

Where the CMA has published a market study notice in a case to

which section 131A applies, the CMA shall, within the period of 6

months beginning with the date on which it publishes the notice—

(a)   

publish the notice under section 131A(2)(a); and

5

(b)   

begin the process of consultation under section 131A(2)(b)

(but the CMA need not complete the process within that

period).

(2)   

Subsection (3) applies where—

(a)   

the CMA has published a market study notice;

10

(b)   

no representation has been made to the CMA within the

period specified in the notice under section 130A(3)(b) to the

effect that a reference under section 131 should be made in

relation to the matter specified in the notice; and

(c)   

the CMA has decided not to make such a reference.

15

(3)   

The CMA shall, within the period of 6 months beginning with the

date on which it publishes the market study notice, publish notice of

the decision not to make a reference.

(4)   

Where the CMA has published a market study notice it shall, within

the period of 12 months beginning with the date on which it

20

publishes the notice, prepare and publish a report (referred to in this

Part as a “market study report”) which sets out—

(a)   

the findings of the CMA in relation to the matter specified in

the notice; and

(b)   

the action (if any) which the CMA proposes to take in relation

25

to the matter.

(5)   

In a case to which section 131A applies, the market study report

shall, in particular, contain—

(a)   

the decision of the CMA to make a reference under section

131 in relation to the matter specified in the market study

30

notice, the decision to accept an undertaking under section

154 instead of making such a reference or (as the case may be)

the decision otherwise not to make such a reference;

(b)   

the CMA’s reasons for the decision; and

(c)   

such information as the CMA considers appropriate for

35

facilitating a proper understanding of its reasons for the

decision.

(6)   

Where a market study report contains a decision of the CMA to make

a reference under section 131 in relation to a matter, the CMA shall,

at the same time as it publishes the report, make the reference.

40

(7)   

This section is subject to section 140A (duty of Secretary of State to

refer in public interest intervention cases).

131C    

Time-limits under section 131B: supplementary

(1)   

The Secretary of State may by order amend section 131B so as to alter

one or more of the following periods—

45

 
 

Enterprise and Regulatory Reform Bill
Schedule 12 — Markets: time-limits

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(a)   

the period of 6 months mentioned in subsection (1) or (3) or

any period for the time being mentioned in either of those

subsections in substitution for that period;

(b)   

the period of 12 months mentioned in subsection (4) or any

period for the time being there mentioned in substitution for

5

that period.

(2)   

But no alteration may be made by virtue of subsection (1) which

results in—

(a)   

the period for the time being mentioned in subsection (1) or

(3) exceeding 6 months; or

10

(b)   

the period for the time being mentioned in subsection (4)

exceeding 12 months.

(3)   

Before making an order under this section the Secretary of State shall

consult the CMA and such other persons as the Secretary of State

considers appropriate.”

15

Market investigations and reports

3     (1)  

Section 137 of the 2002 Act (time-limits for market investigations and

reports) is amended as follows.

      (2)  

In subsection (1), for “two years” substitute “18 months”.

      (3)  

After subsection (2) insert—

20

“(2A)   

The CMA may extend, by no more than 6 months, the period within

which its report under section 136 is to be prepared and published if

it considers that there are special reasons for doing so.

(2B)   

An extension under subsection (2A) shall come into force when

published under section 172.

25

(2C)   

No more than one extension is possible under subsection (2A).”

      (4)  

For subsection (3) substitute—

“(3)   

The Secretary of State may by order amend this section so as to alter

one or more of the following periods—

(a)   

the period of 18 months mentioned in subsection (1) or any

30

period for the time being there mentioned in substitution for

that period;

(b)   

the period of 6 months mentioned in subsection (2A) or any

period for the time being there mentioned in substitution for

that period.”

35

      (5)  

For subsection (4) substitute—

“(4)   

But no alteration shall be made by virtue of subsection (3) which

results in—

(a)   

the period for the time being mentioned in subsection (1)

exceeding 18 months; or

40

(b)   

the period for the time being mentioned in subsection (2A)

exceeding 6 months.”

 
 

Enterprise and Regulatory Reform Bill
Schedule 12 — Markets: time-limits

232

 

Remedies implementation

4          

In section 138 of the 2002 Act (duty to remedy adverse effects), in subsection

(2), after “shall,” insert “within the period permitted by section 138A,”.

5          

After section 138 of that Act insert—

“138A   

Time-limits for discharging duty under section 138

5

(1)   

The CMA shall discharge its duty under section 138(2) within the

period of 6 months beginning with the date on which it publishes the

report concerned under section 136.

(2)   

The CMA may extend, by no more than 4 months, the period within

which its duty under section 138(2) is required to be discharged if it

10

considers that there are special reasons for doing so.

(3)   

The CMA may extend the period within which its duty under section

138(2) is required to be discharged if it considers that—

(a)   

a person has failed (whether with or without reasonable

excuse) to comply with any requirement of a notice under

15

section 174 which was given in relation to the reference; and

(b)   

the failure is preventing the CMA from properly discharging

its duty under section 138(2).

(4)   

An extension under subsection (2) or (3) shall come into force when

published under section 172.

20

(5)   

An extension under subsection (3) 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

25

(b)   

the CMA publishes its decision to cancel the extension.

138B    

Section 138A: supplementary

(1)   

A period extended under section 138A(2) may also be extended

under section 138A(3), and a period extended under section 138A(3)

may also be extended under section 138A(2).

30

(2)   

No more than one extension is possible under section 138A(2).

(3)   

Where a period is extended or further extended under section

138A(2) or (3), 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

35

extension (whether or not those periods overlap in time).

(4)   

Subsection (5) applies where—

(a)   

the period within which the CMA shall discharge its duty

under section 138(2) is further extended;

(b)   

the further extension and at least one previous extension is

40

made under section 138A(3); 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.

 
 

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Schedule 12 — Markets: time-limits

233

 

(5)   

In calculating the period of the further extension, any days or

fractions of days of the kind mentioned in subsection (4)(c) shall be

disregarded.

(6)   

The Secretary of State may by order amend section 138A so as to alter

one or more of the following periods—

5

(a)   

the period of 6 months mentioned in subsection (1) or any

period for the time being there mentioned in substitution for

that period;

(b)   

the period of 4 months mentioned in subsection (2) or any

period for the time being there mentioned in substitution for

10

that period.

(7)   

But no alteration shall be made by virtue of subsection (6) which

results in—

(a)   

the period for the time being mentioned in section 138A(1)

exceeding 6 months; or

15

(b)   

the period for the time being mentioned in section 138A(2)

exceeding 4 months.

(8)   

Before making an order under subsection (6) the Secretary of State

shall consult the CMA and such other persons as the Secretary of

State considers appropriate.”

20

Time-limits: public interest intervention cases

6     (1)  

Section 144 of the 2002 Act (time-limits for investigations and reports in

public interest intervention cases) is amended as follows.

      (2)  

In subsection (1), for “two years” substitute “18 months”.

      (3)  

After subsection (1A) (inserted by Schedule 10) insert—

25

“(1B)   

The CMA may extend, by no more than 6 months, the period within

which its report under section 142 is to be prepared and action is to

be taken in relation to it under section 143(1) or (3) or (as the case may

be 143A(2) or (3) if it considers that there are special reasons for

doing so.

30

(1C)   

An extension under subsection (1B) shall come into force when

published under section 172.

(1D)   

No more than one extension is possible under subsection (1B).”

      (4)  

In subsection (2)—

(a)   

after “amend” insert “—

35

(a)   

”,

(b)   

for “two years” substitute “18 months”, and

(c)   

at the end insert “;

(b)   

subsection (1B) so as to alter the period of 6 months

mentioned in that subsection or any period for the

40

time being mentioned in that subsection in

substitution for that period.”

      (5)  

In subsection (3)—

(a)   

after “results in” insert “—

(a)   

”,

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Revised 19 March 2013