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The key point is that action should not be prejudicial to the eventual outcome of the market reference. That clearly covers action that is intended to evade or obstruct. It may also, in the circumstances that I have set out, cover pre-emptive action of a more positive nature, but which if unchecked may not result in the best outcome for competition and consumers. I appreciate the hon. Gentleman's remarks about the nature of his amendments. I hope that they are probing, and that I have reassured him that they are not necessary.
Mr. Djanogly: Having heard what the Minister has had to say, I am more satisfied about how the wording will be interpreted. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Column Number: 485
Clause 149 ordered to stand part of the Bill.
Clauses 150 and 151 ordered to stand part of the Bill.
Clause 152
Order-making power where final undertakings not fulfilled: Part 4
Amendment made:No. 194, in page 110, line 5, after `authority' insert `or the OFT'.—[Miss Melanie Johnson.]
Clause 152, as amended, ordered to stand part of the Bill.
Clauses 153 to 158 ordered to stand part of the Bill.
Clause 159
Rights to enforce undertakings and orders under this part
Question proposed, That the clause stand part of the Bill.
Mr. Waterson: You probably need a rest from putting the questions, Mr. Conway.
I have a couple of queries, particularly about subsections (4) and (9), with which I would be grateful if the Under-Secretary dealt, although I would be happy for her to write if that is easier. The clause concerns enforcement of undertakings or orders. Clearly, there has to be a mechanism for enforcement. I am concerned about the wider possibility of those affected by subsection (3), which states:
"any person who may be affected by a contravention of the undertaking or the order."
It does not say "directly", of course. On what basis will people be able to bring claims? Where will they bring them?
I have three specific questions. First, how closely related to the undertaking would people have to be to be able to claim damages, and do the normal rules of remoteness and so on apply when calculating damages? Secondly, where would they normally be expected to bring those proceedings? I presume that it would be in the commercial court. Thirdly, what measure of damages would normally apply for that sort of claim? Presumably, such claims would be on a tortious basis. I presume that there is a body of law relating to similar breaches and claims under fair trading legislation, which would assist us, and the Under-Secretary, on those questions.
Miss Johnson: I am grateful to the hon. Gentleman for his points, which I have listened to carefully, and also for his suggestion that I might write to him. I will indeed do so, and give copies to Committee members.
Question put and agreed to.
Clause 159 ordered to stand part of the Bill.
Column Number: 486
Clause 160
Regulated markets
12.45 pm
Miss Melanie Johnson: I beg to move amendment No. 370, in page 115, line 4, at end insert—
"(ca) modifying networking arrangements (within the meaning given by section 39(1) of the Broadcasting Act 1990 (c.42));".
The Chairman: With this it will be convenient to take Government amendments Nos. 371, 372 and 375.
Miss Johnson: The Broadcasting Act 1990 contains a power, in section 193, for the Secretary of State to amend networking agreements by order as a result of a merger or a monopoly report under the Fair Trading Act. The Broadcasting Act requires the regional channel 3 licensees to enter into networking arrangements for the purpose of enabling regional channel 3 services, taken as a whole, to be a nationwide system able to compete effectively with other television programme licences provided in the UK. An application for a channel 3 licence must be accompanied by networking arrangement proposals. When an application has been duly made, the Independent Television Commission, the economic regulator for the sector, must send details of the networking proposals to the OFT and must not award a licence unless it appears to the ITC that the proposals are satisfactory.
The order-making power in section 193 of the Broadcasting Act is similar to the order-making power given to the Secretary of State to amend licences in other regulatory regimes as a result of an FTA report. Schedule 8 to this Bill contains amendments to other sectoral legislation to extend the order-making power to allow the OFT and the Competition Commission to modify licences and to allow that order-making power to be triggered following a report under the powers in the Enterprise Bill, rather than an FTA report. Amendment No. 375 brings the Broadcasting Act regime, which deals with the networking arrangements, into line with the other regulatory statutes. That is because, under the new regime, the OFT and the Competition Commission will be the decision makers in most cases.
Amendments Nos. 370 and 371 require both the Secretary of State and the Competition Commission to have regard to the duties of the ITC, as stated in section 2(2) of the Broadcasting Act, when considering amending networking arrangements as a remedy in a market investigation. Parliament has given the ITC those duties, and it is right that the Competition Commission and the Secretary of State, when considering modifying networking arrangements, should act with regard to them. Amendment No. 372 amends the definition of "sectoral regulator" in clause 160 to include the ITC.
Column Number: 487
These sensible amendments will bring the provisions in the Broadcasting Act into line with the new regime. I commend them to the Committee.
Amendment agreed to.
Mr. Waterson: I beg to move amendment No. 314, in page 115, line 19, at end insert—
Miss Johnson: Perhaps I can help the hon. Gentleman, having listened carefully to what he has said. He suggests that the Competition Commission and the Secretary of State should take account of relevant statutory functions when considering
"modifying the conditions of a licence granted under the Wireless Telegraphy Act."
I think that the amendment is misconceived. The licences granted are not comparable to those granted, for example, under section 7 of the Telecommunications Act 1984. The hon. Gentleman's amendment is, therefore, unnecessary, although not for the reasons that he gave.
Mr. Waterson: That was a spectacular own goal. I shall plough on by saying that the role of the Radiocommunications Agency, and the licences that it issues under the Wireless Telegraphy Act and the associated regulations, are covered neither by the Bill nor by the Government amendments, as the Under-Secretary has been good enough to confirm. I think that the CBI raised the point that the issue is very important in many markets that use electronic information technology. It is not entirely clear why it should not be included in the Bill, but clearly the Under-Secretary has given the matter deep thought, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendments made: No. 371, in page 115, line 31, at end insert—
`(ca) in relation to any networking arrangements (within the meaning given by section 39(1) of the Broadcasting Act 1990 (c.42)), the duties of the Independent Television Commission under section 2(2) of that Act;'
No. 372 in page 116, line 16, at end insert—
`(fa) the Independent Television Commission;'.—[Miss Melanie Johnson.]
Mr. Waterson: I beg to move amendment No. 315, in page 116, line 32, leave out subsection (9).
Again, this is a short point. It is not clear to us why subsection (9) says that the commission
"shall not have regard . . . to any relevant customer benefits".
Relevant customer benefits are by now a useful and clear concept that rightly appears in a number of clauses. Why do the Government believe that they should not apply it in this case?
Column Number: 488
Miss Johnson: Again, I can help the hon. Gentleman. Subsection (9) ensures that the commission must take into account only those issues that fall within the scope of the relevant statutory functions and not the standard set of customer benefits. The amendment gives the Competition Commission discretion to consider customer benefits alongside its duty to take account of regulator statutory functions. A standard set of customer benefits is set out in clause 126.
The benefits to consumers are defined in terms of lower prices, higher quality and greater choice of goods and services, and are covered in some form in most regulator statutory duties. For example, Oftel has a duty to promote the interests of consumers in respect of price, quality and choice, and a duty to promote research into the development and use of new techniques. Parliament has given the regulator its statutory duties, which must be taken into account when the regulator performs its function. It is right that the Competition Commission should have regard to those duties when considering relevant action.
However, although all the regulators have a duty to promote or facilitate effective competition, certain regulators do not have an explicit duty covering each of the standard set of customer benefits. For example, Ofwat has no specific duty relating to innovation. It is likely that in practice the regulator would consider the benefits of innovation in his duty to promote or facilitate effective competition, but it is not always explicit in the statutory functions.
The Competition Commission has discretion to take into account the standard set of customer benefits in market investigations in "normal" sectors. In regulated sectors, the discretion to consider customer benefits is replaced by a duty to take into account regulator statutory functions. However, if it is uncertain whether the standard set of customer benefits is included in the regulator statutory functions, we agree with the hon. Gentleman that we need to revisit the wording in subsection (9) to clarify that. Therefore, I agree to consider his amendment further. In the light of my remarks, I hope that the hon. Gentleman will seek to withdraw the amendment.
Mr. Waterson: I am most grateful to the Under-Secretary and I look forward to seeing her amendments later. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 160, as amended, ordered to stand part of the Bill.
Schedule 8
Certain amendments of sectoral enactmentsMiss Johnson
: I beg to move amendment No. 271, in page 212, line 35, at end insert
Column Number: 489
This is a drafting amendment to ensure consistency with other sectoral legislation. I ask the Committee to support it.
Amendment agreed to.
Amendment made, No. 375, in page 213, line 32, at end insert—
`Broadcasting Act 1990 (c. 42)
4A For section 193 of the Broadcasting Act 1990 (modification of networking arrangements in consequence of reports under competition legislation) there shall be substituted—
"193 Modification of networking arrangements in consequence of competition legislation
(1) Where the Office of Fair Trading, the Competition Commission or (as the case may be) the Secretary of State (in this section "the relevant authority") makes a relevant order, the order may also provide for the modification of any networking arrangements to such extent as may appear to the relevant authority to be requisite or expedient for the purpose of giving effect to, or taking account of, any provision made by the order.
(2) In subsection (1) "relevant order" means—
(a) an order under section 71, 79 or 80 of, or paragraph 5, 10 or 11 of Schedule 6 to, the Enterprise Act 2002 where—
(i) one or more than one of the enterprises which have, or may have, ceased to be distinct enterprises was engaged in the provision of programmes for broadcasting in regional Channel 3 services; or
(ii) one or more than one of the enterprises which will or may cease to be distinct enterprises is engaged in the provision of such programmes; or
(b) an order under section 152 or 153 of that Act where the feature, or combination of features, of the market in the United Kingdom for goods or services which prevents, restricts or distorts competition relates to the provision of programmes for broadcasting in regional Channel 3 services.
(3) Expressions used in subsection (2) and in Part 3 or (as the case may be) Part 4 of the Enterprise Act 2002 have the same meanings in that subsection as in that Part.
(4) In this section —
"networking arrangements" means any such arrangements as are mentioned in section 39(1) above; and
"regional Channel 3 service" has the meaning given by section 14(6) above."'.—[Miss Melanie Johnson.]
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