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
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.
20
(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.

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Schedule 12 — Markets: time-limits
228

(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),

Enterprise and Regulatory Reform Bill
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
230

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

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Schedule 12 — Markets: time-limits
231

(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.”

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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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(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)
”,
45