Session 2012 - 13
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Enterprise and Regulatory Reform Bill


Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 3 — Anti-trust

39

 

41      

Extension of powers to issue warrants to CAT

Schedule 13 (which amends the 1998 Act to extend the powers under that Act

to issue warrants to the Competition Appeal Tribunal) has effect.

42      

Part 1 of the 1998 Act: procedural matters

(1)   

Part 1 of the 1998 Act (competition) is amended as follows.

5

(2)   

After section 25 (power to investigate) insert—

“25A    

Power of CMA to publish notice of investigation

(1)   

Where the CMA decides to conduct an investigation it may publish a

notice which may, in particular—

(a)   

state its decision to do so;

10

(b)   

indicate which of subsections (2) to (7) of section 25 the

investigation falls under;

(c)   

summarise the matter being investigated;

(d)   

identify any undertaking whose activities are being

investigated as part of the investigation;

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(e)   

identify the market which is or was affected by the matter being

investigated.

(2)   

Section 57 does not apply to a notice under subsection (1) to the extent

that it includes information other than information mentioned in that

subsection.

20

(3)   

Subsection (4) applies if—

(a)   

the CMA has published a notice under subsection (1) which

identifies an undertaking whose activities are being

investigated, and

(b)   

the CMA subsequently decides (without making a decision

25

within the meaning given by section 31(2)) to terminate the

investigation of the activities of the undertaking so identified.

(4)   

The CMA must publish a notice stating that the activities of the

undertaking in question are no longer being investigated.”

(3)   

Schedule 9 (examples of provision that may be made in rules) is amended as

30

follows.

(4)   

After paragraph 1 insert—

“Delegation of functions

1A    (1)  

Rules may provide for the exercise of a function of the CMA under

this Part on its behalf—

35

(a)   

by one or more members of the CMA Board (see Part 2 of

Schedule 4 to the Enterprise and Regulatory Reform Act

2013);

(b)   

by one or more members of the CMA panel (see Part 3 of that

Schedule to that Act);

40

(c)   

by one or more members of staff of the CMA;

(d)   

jointly by one or more of the persons mentioned in paragraph

(a), (b) or (c).

 
 

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 3 — Anti-trust

40

 

      (2)  

Sub-paragraph (1) does not apply in relation to any function

prescribed in regulations made under section 7(1) of the Civil

Aviation Act 1982 (power for Secretary of State to prescribe certain

functions of the Civil Aviation Authority which must not be

performed on its behalf by any other person).”

5

(5)   

After paragraph 13 insert—

“Oral hearings: procedure

13A   (1)  

Rules may make provision as to the procedure to be followed by the

CMA in holding oral hearings as part of an investigation.

      (2)  

Rules may, in particular, make provision as to the appointment of a

10

person mentioned in sub-paragraph (3) who has not been involved

in the investigation in question to—

(a)   

chair an oral hearing, and

(b)   

prepare a report following the hearing and give it to the

person who is to exercise on behalf of the CMA its function of

15

making a decision (within the meaning given by section

31(2)) as a result of the investigation.

      (3)  

The persons are—

(a)   

a member of the CMA Board;

(b)   

a member of the CMA panel;

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(c)   

a member of staff of the CMA.

      (4)  

The report must—

(a)   

contain an assessment of the fairness of the procedure

followed in holding the oral hearing, and

(b)   

identify any other concerns about the fairness of the

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procedure followed in the investigation which have been

brought to the attention of the person preparing the report.”

(6)   

After paragraph 13A insert—

“Procedural complaints

13B   (1)  

Rules may make provision as to arrangements to be made by the

30

CMA for dealing with complaints about the conduct by the CMA of

an investigation.

      (2)  

Rules may, in particular, make provision as to—

(a)   

the appointment of a person mentioned in sub-paragraph (3)

who has not been involved in the investigation in question to

35

consider any such complaint;

(b)   

the time-table for the consideration of any such complaint.

      (3)  

The persons are—

(a)   

a member of the CMA Board;

(b)   

a member of the CMA panel;

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(c)   

a member of staff of the CMA.”

 
 

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 3 — Anti-trust

41

 

(7)   

After paragraph 13B insert—

“Settling cases

13C        

Rules may make provision as to the procedure to be followed in a

case where, during an investigation, one or more persons notify the

CMA that they accept that there has been an infringement of a kind

5

to which the investigation relates.”

Interim measures and other sanctions

43      

Threshold for interim measures

In section 35 of the 1998 Act (interim measures), in subsection (2)(a), for

“serious, irreparable damage” substitute “significant damage”.

10

44      

Penalties: guidance etc.

(1)   

Part 1 of the 1998 Act (competition) is amended as follows.

(2)   

In section 36 (penalties), after subsection (7) insert—

“(7A)   

In fixing a penalty under this section the CMA must have regard to—

(a)   

the seriousness of the infringement concerned, and

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(b)   

the desirability of deterring both the undertaking on whom the

penalty is imposed and others from—

(i)   

entering into agreements which infringe the Chapter 1

prohibition or the prohibition in Article 81(1), or

(ii)   

engaging in conduct which infringes the Chapter 2

20

prohibition or the prohibition in Article 82.”

(3)   

In section 38 (guidance on level of penalties), in subsection (8), before “must

have regard” insert “and the Tribunal”.

Miscellaneous

45      

Power for Secretary of State to impose time-limits on investigations etc.

25

After section 31E of the 1998 Act insert—

“31F    

Power for Secretary of State to impose time-limits on investigations

etc.

(1)   

The Secretary of State may by order impose time-limits in relation to—

(a)   

the conduct by the CMA of investigations or investigations of a

30

description specified in the order;

(b)   

the making by the CMA of decisions (within the meaning given

by section 31(2)) as a result of investigations or investigations of

such a description.

(2)   

Before making an order under subsection (1), the Secretary of State

35

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

considers appropriate.”

 
 

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 4 — Cartels

42

 

46      

Review of operation of Part 1 of 1998 Act

(1)   

The Secretary of State must—

(a)   

review the operation of Part 1 of the 1998 Act, and

(b)   

prepare and publish a report on the outcome of the review.

(2)   

The report must be published before the end of the period of 5 years beginning

5

with the day on which Part 1 of Schedule 5 (which transfers the functions of the

Office of Fair Trading under Part 1 of the 1998 Act to the Competition and

Markets Authority) comes into force.

(3)   

The Secretary of State must lay the report before Parliament.

Chapter 4

10

Cartels

47      

Cartel offence

(1)   

Section 188 of the 2002 Act (cartel offence) is amended as follows.

(2)   

In subsection (1), omit “dishonestly”.

(3)   

Omit subsection (6).

15

(4)   

After subsection (7) insert—

“(8)   

This section is subject to section 188A.”

(5)   

After that section insert—  

“188A   

 Circumstances in which cartel offence not committed

(1)   

An individual does not commit an offence under section 188(1) if,

20

under the arrangements—

(a)   

in a case where the arrangements would (operating as the

parties intend) affect the supply in the United Kingdom of a

product or service, customers would be given relevant

information about the arrangements before they enter into

25

agreements for the supply to them of the product or service so

affected,

(b)   

in the case of bid-rigging arrangements, the person requesting

bids would be given relevant information about them at or

before the time when a bid is made, or

30

(c)   

in any case, relevant information about the arrangements

would be published, before the arrangements are implemented,

in the manner specified at the time of the making of the

agreement in an order made by the Secretary of State.

(2)   

In subsection (1), “relevant information” means—

35

(a)   

the names of the undertakings to which the arrangements

relate,

(b)   

a description of the nature of the arrangements which is

sufficient to show why they are or might be arrangements of the

kind to which section 188(1) applies,

40

(c)   

the products or services to which they relate, and

 
 

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 4 — Cartels

43

 

(d)   

such other information as may be specified in an order made by

the Secretary of State.

(3)   

An individual does not commit an offence under section 188(1) if the

agreement is made in order to comply with a legal requirement.

(4)   

In subsection (3), “legal requirement” has the same meaning as in

5

paragraph 5 of Schedule 3 to the Competition Act 1998.

(5)   

A power to make an order under this section—

(a)   

is exercisable by statutory instrument,

(b)   

may be exercised so as to make different provision for different

cases or different purposes, and

10

(c)   

includes power to make such incidental, supplementary,

consequential, transitory, transitional or saving provision as the

Secretary of State considers appropriate.

(6)   

A statutory instrument containing an order under this section is subject

to annulment in pursuance of a resolution of either House of

15

Parliament.”

(6)   

After section 188A (as inserted by subsection (5) above) insert—

“188B   

Defences to commission of cartel offence

(1)   

In a case where the arrangements would (operating as the parties

intend) affect the supply in the United Kingdom of a product or service,

20

it is a defence for an individual charged with an offence under section

188(1) to show that, at the time of the making of the agreement, he or

she did not intend that the nature of the arrangements would be

concealed from customers at all times before they enter into agreements

for the supply to them of the product or service.

25

(2)   

It is a defence for an individual charged with an offence under section

188(1) to show that, at the time of the making of the agreement, he or

she did not intend that the nature of the arrangements would be

concealed from the CMA.

(3)   

It is a defence for an individual charged with an offence under section

30

188(1) to show that, before the making of the agreement, he or she took

reasonable steps to ensure that the nature of the arrangements would

be disclosed to professional legal advisers for the purposes of obtaining

advice about them before their making or (as the case may be) their

implementation.”

35

(7)   

After section 190 of the 2002 Act insert—

“190A   

Cartel offence: prosecution guidance

(1)   

The CMA must prepare and publish guidance on the principles to be

applied in determining, in any case, whether proceedings for an offence

under section 188(1) should be instituted.

40

(2)   

The CMA may at any time issue revised or new guidance.

(3)   

Guidance published by the CMA under this section is to be published

in such manner as it considers appropriate.

(4)   

In preparing guidance under this section the CMA must consult—

 
 

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 4 — Cartels

44

 

(a)   

the Director of the Serious Fraud Office;

(b)   

the Lord Advocate; and

(c)   

such other persons as it considers appropriate.”

(8)   

The amendments made by subsections (1) to (6) apply only in relation to

agreements falling within section 188(1) of the 2002 Act which—

5

(a)   

are made after the commencement of this section, and

(b)   

relate to arrangements made or to be made after that commencement.

48      

Extension of power to issue warrants to CAT

(1)   

Section 194 of the 2002 Act (power to enter premises under a warrant) is

amended as follows.

10

(2)   

In subsection (1), for the words from the beginning to “if he is satisfied”

substitute “On an application made to it by the CMA or, in Scotland, the

procurator fiscal, the appropriate body may issue a warrant if it is satisfied”.

(3)   

After subsection (1) insert—

“(1A)   

In subsection (1), “appropriate body” means—

15

(a)   

in England and Wales and Northern Ireland, the High Court or

the Competition Appeal Tribunal;

(b)   

in Scotland, the sheriff.”

(4)   

After subsection (4) insert—

“(4A)   

An application for a warrant under this section must be made—

20

(a)   

in the case of an application to the High Court or the sheriff, in

accordance with rules of court;

(b)   

in the case of an application to the Competition Appeal

Tribunal, in accordance with rules made under section 15.”

(5)   

In Schedule 4 to that Act, before paragraph 11, but after the cross-heading

25

immediately preceding it, insert—

“10A  (1)  

Tribunal rules may make provision as to proceedings on an

application for a warrant under section 194 of this Act or section 28,

28A, 62, 62A, 63, 65G or 65H of the 1998 Act, including provision—

(a)   

for the Tribunal dealing with the proceedings to consist only

30

of the President or a member of the panel of chairmen;

(b)   

as to the manner in which the proceedings are to be

conducted, including provision—

(i)   

for such applications to be determined without a

hearing;

35

(ii)   

in cases where there is a hearing, for it to be held in

private if the Tribunal considers it appropriate

because it is considering information of a kind

mentioned in paragraph 1(2);

(c)   

as to the persons entitled to be heard in such proceedings

40

(where there is a hearing);

(d)   

for requiring persons to attend to give evidence and produce

documents, and for authorising the administration of oaths

to witnesses;

 
 

Enterprise and Regulatory Reform Bill
Part 4 — Competition Reform
Chapter 5 — Miscellaneous

45

 

(e)   

as to the evidence which may be required or admitted and the

extent to which it should be oral or written;

(f)   

allowing the Tribunal to fix time-limits with respect to any

aspect of the proceedings and to extend any time-limit

(before or after its expiry).

5

      (2)  

Paragraphs 2 to 8, and 11 to 17, of this Schedule do not apply in

relation to the institution or conduct of proceedings for a warrant

mentioned in sub-paragraph (1).”

(6)   

In section 14 of that Act (constitution of Tribunal for particular proceedings

and its decisions), in subsection (5), for “paragraph 18” substitute “paragraphs

10

10A(1)(a) and 18”.

Chapter 5

Miscellaneous

Enforcement orders: markets and mergers

49      

Enforcement orders: monitoring compliance and determination of disputes

15

In Schedule 8 to the 2002 Act (provision that may be contained in certain

enforcement orders made under Part 3 or 4 of that Act), after paragraph 20B

insert—

“Monitoring of compliance and determination of disputes

20C   (1)  

An order may provide for the appointment of one or more than one

20

person (referred to in this paragraph as an “appointee”) by the

relevant authority or by such other persons as may be specified or

described in the order to—

(a)   

monitor compliance with such terms of the order as are so

specified or described or terms of any directions given under

25

the order;

(b)   

determine any dispute between persons who are subject to

the order about what is required by any such terms.

      (2)  

An order made by virtue of this paragraph must make provision as

to the terms of an appointee’s appointment.

30

      (3)  

A determination made by virtue of an order under this paragraph is

binding on—

(a)   

any person who is subject to the order;

(b)   

the relevant authority; and

(c)   

in the case where the relevant authority is the Secretary of

35

State, the CMA.”

50      

Enforcement orders: provision of information

(1)   

Schedule 8 to the 2002 Act (provision that may be contained in certain

enforcement orders made under Part 3 or 4 of that Act) is amended as follows.

(2)   

Omit paragraph 15 (publication etc. of price information).

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Revised 19 March 2013