Standard view

Part I Introductory

1 Director General of Fair Trading

(1) The Secretary of State shall appoint an officer to be known as the Director General of Fair Trading (in this Act referred to as “the Director”) for the purpose of performing the functions assigned or transferred to the Director by or under this Act.

(2) An appointment of a person to hold office as the Director shall not be for a term exceeding five years; but previous appointment to that office shall not affect eligibility for re-appointment.

(3) The Director may at any time resign his office as the Director by notice in writing addressed to the Secretary of State; and the Secretary of State may remove any person from that office on the ground of incapacity or misbehaviour.

(4) Subject to subsections (2) and (3) of this section, the Director shall hold and vacate office as such in accordance with the terms of his appointment.

(5) The Director may appoint such staff as he may think fit, subject to the approval of the Minister for the Civil Service as to numbers and as to terms and conditions of service.

(6) The provisions of Schedule 1 to this Act shall have effect with respect to the Director.

2 General functions of Director

(1) Without prejudice to any other functions assigned or transferred to him by or under this Act, it shall be the duty of the Director, so far as appears to him to be practicable from time to time,—

(a) to keep under review the carrying on of commercial activities in the United Kingdom which relate to goods supplied to consumers in the United Kingdom or produced with a view to their being so supplied, or which relate to services supplied for consumers in the United Kingdom, and to collect information with respect to such activities, and the persons by whom they are carried on, with a view to his becoming aware of, and ascertaining the circumstances relating to, practices which may adversely affect the economic interests of consumers in the United Kingdom, and

(b) to receive and collate evidence becoming available to him with respect to such activities as are mentioned in the preceding paragraph and which appears to him to be evidence of practices which may adversely affect the interests (whether they are economic interests or interests with respect to health, safety or other matters) of consumers in the United Kingdom.

(2) It shall also be the duty of the Director, so far as appears to him to be practicable from time to time, to keep under review the carrying on of commercial activities in the United Kingdom, and to collect information with respect to those activities, and the persons by whom they are carried on, with a view to his becoming aware of, and ascertaining the circumstances relating to, monopoly situations or uncompetitive practices.

(3) It shall be the duty of the Director, where either he considers it expedient or he is requested by the Secretary of State to do so,—

(a) to give information and assistance to the Secretary of State with respect to any of the matters in respect of which the Director has any duties under subsections (1) and (2) of this section, or

(b) subject to the provisions of Part II of this Act in relation to recommendations under that Part of this Act, to make recommendations to the Secretary of State as to any action which in the opinion of the Director it would be expedient for the Secretary of State or any other Minister to take in relation to any of the matters in respect of which the Director has any such duties.

(4) It shall also be the duty of the Director to have regard to evidence becoming available to him with respect to any course of conduct on the part of a person carrying on a business which appears to be conduct detrimental to the interests of consumers in the United Kingdom and (in accordance with the provisions of Part III of this Act) to be regarded as unfair to them, with a view to considering what action (if any) he should take under Part III of this Act.

(5) It shall be the duty of the Director to have regard to the needs of regional development and to the desirability of dispersing administrative offices from London in making decisions on the location of offices for his staff.

3 Consumer Protection Advisory Committee

(1) There shall be established an advisory committee to be called the Consumer Protection Advisory Committee (in this Act referred to as “the Advisory Committee”) for the purpose of performing the functions assigned to that Committee by Part II of this Act.

(2) Subject to subsection (6) of this section, the Advisory Committee shall consist of not less than ten and not more than fifteen members, who shall be appointed by the Secretary of State.

(3) The Secretary of State may appoint persons to the Advisory Committee either as full-time members or as part-time members.

(4) Of the members of the Advisory Committee, the Secretary of State shall appoint one to be chairman and one to be deputy chairman of the Advisory Committee.

(5) In appointing persons to be members of the Advisory Committee, the Secretary of State shall have regard to the need for securing that the Advisory Committee will include—

(a) one or more persons appearing to him to be qualified to advise on practices relating to goods supplied to consumers in the United Kingdom or produced with a view to their being so suppied, or relating to services supplied for consumers in the United Kingdom, by virtue of their knowledge of or experience in the supply (whether to consumers or not) of such goods or by virtue of their knowledge of or experience in the supply of such services;

(b) one or more persons appearing to him to be qualified to advise on such practices as are mentioned in the preceding paragraph by virtue of their knowledge of or experience in the enforcement of the [F1 M1Weights and Measures Act 1963][F1Weights and Measures Act 1985] or the M2Trade Descriptions Act 1968 or other similar enactments; and

(c) one or more persons appearing to him to be qualified to advise on such practices by virtue of their knowledge of or experience in organisations established, or activities carried on, for the protection of consumers.

(6) The Secretary of State may by order made by statutory instrument increase the maximum number of members of the Advisory Committee to such number as he may think fit.

(7) The provisions of Schedule 2 to this Act shall have effect with respect to the Advisory Committee.

F14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Principal functions of Commission

(1) Without prejudice to any other functions assigned to the Commission by or under this Act, it shall be the duty of the Commission, subject to and in accordance with the following provisions of this Act, to investigate and report on any question which may be referred to the Commission under this Act—

(a) with respect to the existence, or possible existence, of a monopoly situation, or

(b) with respect to a transfer of a newspaper or of newspaper assets (within the meaning of Part V of this Act), or

(c) with respect to the creation, or possible creation, of a merger situation qualifying for investigation (within the meaning of Part V of this Act).

(2) It shall be the duty of the Director, for the purpose of assisting the Commission in carrying out an investigation on a reference made to them under this Act, to give to the Commission—

(a) any information which is in his possession and which relates to matters falling within the scope of the investigation, and which is either requested by the Commission for that purpose or is information which in his opinion it would be appropriate for that purpose to give to the Commission without any such request, and

(b) any other assistance which the Commission may require, and which it is within his power to give, in relation to any such matters,

and the Commission, for the purpose of carrying out any such investigation, shall take account of any information given to them for that purpose under this subsection.

(3) In this Act “monopoly reference” means any reference to the Commission under this Act which falls within paragraph (a) of subsection (1) of this section; “merger reference” (subject to section 63 of this Act) means any reference to the Commission under this Act which falls within paragraph (b) or paragraph (c) of that subsection; and “monopoly situation” (except in sections 6 to 8 of this Act) means circumstances in which, in accordance with the following provisions of this Part of this Act, a monopoly situation is for the purposes of this Act to be taken to exist in relation to any matters specified in section 6(1), section 7(1) or section 8 of this Act.

6 Monopoly situation in relation to supply of goods

(1) For the purposes of this Act a monopoly situation shall be taken to exist in relation to the supply of goods of any description in the following cases, that is to say, if—

(a) at least one-quarter of all the goods of that description which are supplied in the United Kingdom are supplied by one and the same person, or are supplied to one and the same person, or

(b) at least one-quarter of all the goods of that description which are supplied in the United Kingdom are supplied by members of one and the same group of interconnected bodies corporate, or are supplied to members of one and the same group of interconnected bodies corporate, or

(c) at least one-quarter of all the goods of that description which are supplied in the United Kingdom are supplied by members of one and the same group consisting of two or more such persons as are mentioned in subsection (2) of this section, or are supplied to members of one and the same group consisting of two or more such persons, or

(d) one or more agreements are in operation, the result or collective result of which is that goods of that description are not supplied in the United Kingdom at all.

(2) The two or more persons referred to in subsection (1)(c) of this section, in relation to goods of any description, are any two or more persons (not being a group of interconnected bodies corporate) who whether voluntarily or not, and whether by agreement or not, so conduct their respective affairs as in any way to prevent, restrict or distort competition in connection with the production or supply of goods of that description, whether or not they themselves are affected by the competition and whether the competition is between persons interested as producers or suppliers or between persons interested as customers of producers or suppliers.

7 Monopoly situation in relation to supply of services

(1) For the purposes of this Act a monopoly situation shall be taken to exist in relation to the supply of services of any description in the following cases, that is to say, if—

(a) the supply of services of that description in the United Kingdom is, to the extent of at least one-quarter, supply by one and the same person, or supply for one and the same person, or

(b) the supply of services of that description in the United Kingdom is, to the extent of at least one-quarter, supply by members of one and the same group of interconnected bodies corporate, or supply for members of one and the same group of interconnected bodies corporate, or

(c) the supply of services of that description in the United Kingdom is, to the extent of at least one-quarter, supply by members of one and the same group consisting of two or more such persons as are mentioned in subsection (2) of this section, or supply for members of one and the same group consisting of two or more such persons, or

(d) one or more agreements are in operation, the result or collective result of which is that services of that description are not supplied in the United Kingdom at all.

(2) The two or more persons referred to in subsection (1)(c) of this section, in relation to services of any description, are any two or more persons (not being a group of interconnected bodies corporate) who whether voluntarily or not, and whether by agreement or not, so conduct their respective affairs as in any way to prevent, restrict or distort competition in connection with the supply of services of that description, whether or not they themselves are affected by the competition, and whether the competition is between persons interested as persons by whom, or as persons for whom, services are supplied.

(3) In the application of this section for the purposes of a monopoly reference, the Commission, or the person or persons making the reference, may, to such extent as the Commission, or that person or those persons, think appropriate in the circumstances, treat services as supplied in the United Kingdom if the person supplying the services—

(a) has a place of business in the United Kingdom, or

(b) controls the relevant activities from the United Kingdom, or

(c) being a body corporate, is incorporated under the law of Great Britain or of Northern Ireland,

and may do so whether or not those services would otherwise be regarded as supplied in the United Kingdom.

8 Monopoly situation in relation to exports

(1) For the purposes of this Act a monopoly situation shall be taken to exist in relation to exports of goods of any description from the United Kingdom in the following cases, that is to say, if—

(a) at least one-quarter of all the goods of that description which are produced in the United Kingdom are produced by one and the same person, or

(b) at least one-quarter of all the goods of that description which are produced in the United Kingdom are produced by members of one and the same group of interconnected bodies corporate;

and in those cases a monopoly situation shall for the purposes of this Act be taken to exist both in relation to exports of goods of that description from the United Kingdom generally and in relation to exports of goods of that description from the United Kingdom to each market taken separately.

(2) In relation to exports of goods of any description from the United Kingdom generally, a monopoly situation shall for the purposes of this Act be taken to exist if—

(a) one or more agreements are in operation which in any way prevent or restrict, or prevent, restrict or distort competition in relation to, the export of goods of that description from the United Kingdom, and

(b) that agreement is or (as the case may be) those agreements collectively are operative with respect to at least one-quarter of all the goods of that description which are produced in the United Kingdom.

(3) In relation to exports of goods of any description from the United Kingdom to any particular market, a monopoly situation shall for the purposes of this Act be taken to exist if—

(a) one or more agreements are in operation which in any way prevent or restrict, or prevent, restrict or distort competition in relation to, the supply of goods of that description (whether from the United Kingdom or not) to that market, and

(b) that agreement is or (as the case may be) those agreements collectively are operative with respect to at least one-quarter of all the goods of that description which are produced in the United Kingdom.

9 Monopoly situation limited to part of United Kingdom

(1) For the purposes of a monopoly reference, other than a reference relating to exports of goods from the United Kingdom, the person or persons making the reference may, if it appears to him or them to be appropriate in the circumstances to do so, determine that consideration shall be limited to a part of the United Kingdom.

(2) Where such a determination is made, then for the purposes of that monopoly reference the provisions of sections 6 and 7 of this Act, or such of those provisions as are applicable for those purposes, shall have effect as if, wherever those provisions refer to the United Kingdom, they referred to that part of the United Kingdom to which, in accordance with that determination, consideration is to be limited.

(3) The preceding provisions of this section shall have effect subject to subsection (4) of section 50 of this Act in cases to which that subsection applies.

10 Supplementary provisions relating to ss. 6 to 9

(1) In the application of any of the provisions of sections 6 to 9 of this Act for the purposes of a monopoly reference, those provisions shall have effect subject to the following provisions of this section.

F1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) In relation to goods or services of any description which are the subject of different forms of supply—

(a) references in paragraphs (a) to (d) of subsection (1), and in subsection (2), of section 6 or in section 8(3) of this Act to the supply of goods, or

(b) references in paragraphs (a) to (d) of subsection (1), and in subsection (2), of section 7 of this Act to the supply of services,

shall for those purposes be construed in whichever of the following ways the Commission, or the person or persons making the monopoly reference, think appropriate in all the circumstances, that is to say, as references to any of those forms of supply taken separately, to all those forms of supply taken together, or to any of those forms of supply taken in groups.

(4) For the purposes of subsection (3) of this section the Commission, or the person or persons making the monopoly reference in question, may treat goods or services as being the subject of different forms of supply whenever the transactions in question differ as to their nature, their parties, their terms or their surrounding circumstances, and the difference is one which, in the opinion of the Commission, or the person or persons making the reference, ought for the purposes of that subsection to be treated as a material difference.

(5) For the purposes of a monopoly reference made by the Director, subsections (3) and (4) of this section shall have effect subject to section 50(3) and (4) of this Act.

(6) In determining, for the purposes of a monopoly reference, whether the proportion of one-quarter mentioned in any provision of section 6, section 7 or section 8 of this Act is fulfilled with respect to goods or services of any description, the Commission, or the person or persons making the reference, shall apply such criterion (whether it be value or cost or price or quantity or capacity or number of workers employed or some other criterion, of whatever nature) or such combination of criteria as may appear to them or him to be most suitable in all the circumstances.

(7) The criteria for determining when goods or services can be treated, for the purposes of a monopoly reference, as goods or services of a separate description shall be such as the person or persons making the reference may think most suitable in the circumstances.

(8) In construing the provisions of section 7(3) and section 9 of this Act and the provisions of subsections (1) [F2and (3) to (7)] of this section, the purposes of a monopoly reference shall be taken to include the purpose of enabling the Director, or the Secretary of State or any other Minister, to determine in any particular circumstances—

(a) whether a monopoly reference could be made under Part IV of this Act, and

(b) if so, whether in those circumstances such a reference could be made by the Director,

and references in those provisions to the person or persons making a monopoly reference shall be construed accordingly.

11 Meaning of “complex monopoly situation”

(1) In this Act “complex monopoly situation” means circumstances in which, in accordance with the preceding provisions of this Act, a monopoly situation is for the purposes of this Act to be taken to exist in relation to the supply of goods or services of any description, or in relation to exports of goods of any description from the United Kingdom, by reason that the condition specified in paragraph (c) or in paragraph (d) of section 6(1) or of section 7(1) of this Act is fulfilled, or that the conditions specified in subsection (2) or in subsection (3) of section 8 of this Act are fulfilled.

(2) Any reference in the preceding subsection to paragraph (c) or paragraph (d) of section 6(1) or of section 7(1) of this Act shall be construed as including a reference to that paragraph as modified by section 9(2) of this Act.

12 Powers of Secretary of State in relation to functions of Director

(1) The Secretary of State may give general directions indicating considerations to which the Director should have particular regard in determining the order of priority in which—

(a) matters are to be brought under review in the performance of his duty under section 2(1) of this Act, or

(b) classes of goods or services are to be brought under review by him for the purpose of considering whether a monopoly situation exists or may exist in relation to them.

(2) The Secretary of State may also give general directions indicating—

(a) considerations to which, in cases where it appears to the Director that a practice may adversely affect the interests of consumers in the United Kingdom, he should have particular regard in determining whether to make a recommendation to the Secretary of State under section 2(3)(b) of this Act, or

(b) considerations to which, in cases where it appears to the Director that a consumer trade practice may adversely affect the economic interests of consumers in the United Kingdom, he should have particular regard in determining whether to make a reference to the Advisory Committee under Part II of this Act, or

(c) considerations to which, in cases where it appears to the Director that a monopoly situation exists or may exist, he should have particular regard in determining whether to make a monopoly reference to the Commission under Part IV of this Act.

(3) The Secretary of State, on giving any directions under this section, shall arrange for those directions to be published in such manner as the Secretary of State thinks most suitable in the circumstances.

Part II References to Consumer Protection Advisory Committee

General provisions

13 Meaning of “consumer trade practice”

In this Act “consumer trade practice” means any practice which is for the time being carried on in connection with the supply of goods (whether by way of sale or otherwise) to consumers or in connection with the supply of services for consumers and which relates—

(a) to the terms or conditions (whether as to price or otherwise) on or subject to which goods or services are or are sought to be supplied, or

(b) to the manner in which those terms or conditions are communicated to persons to whom goods are or are sought to be supplied or for whom services are or are sought to be supplied, or

(c) to promotion (by advertising, labelling or marking of goods, canvassing or otherwise) of the supply of goods or of the supply of services, or

(d) to methods of salesmanship employed in dealing with consumers, or

(e) to the way in which goods are packed or otherwise got up for the purpose of being supplied, or

(f) to methods of demanding or securing payment for goods or services supplied.

14 General provisions as to references to Advisory Committee

(1) Subject to sections 15 and 16 of this Act, the Secretary of State or any other Minister or the Director may refer to the Advisory Committee the question whether a consumer trade practice specified in the reference adversely affects the economic interests of consumers in the United Kingdom.

(2) The Secretary of State or any other Minister by whom a reference is made under this section shall transmit a copy of the reference to the Director.

(3) On any reference made to the Advisory Committee under this section the Advisory Committee shall consider the question so referred to them and shall prepare a report on that question and (except as otherwise provided by section 21(3) of this Act) submit that report to the person by whom the reference was made.

(4) Subject to the provisions of section 133 of this Act, it shall be the duty of the Director, where he is requested by the Advisory Committee to do so for the purpose of assisting the Committee in carrying out an investigation on a reference made to them under this section, to give to the Committee—

(a) any information which is in his possession and which relates to matters falling within the scope of the investigation, and

(b) any other assistance which the Committee may require, and which it is within his power to give, in relation to any such matters.

(5) The Advisory Committee shall transmit to the Secretary of State a copy of every report which is made by them under this section to a person other than the Secretary of State, and shall transmit to the Director a copy of every report which is made by them under this section to a person other than the Director.

15 Exclusion from s. 14 in respect of certain services

No reference under section 14 of this Act shall be made to the Advisory Committee by the Secretary of State or by any other Minister or by the Director if it appears to him—

(a) that the consumer trade practice in question is carried on in connection only with the supply of services of a description specified in Schedule 4 to this Act, and

(b) that a monopoly situation exists or may exist in relation to the supply of services of that description.

16 Restriction on references under s. 14 in respect of certain goods and services

(1) No reference under section 14 of this Act shall be made to the Advisory Committee by the Director except with the consent of the appropriate Minister, if it appears to the Director that the consumer trade practice in question—

(a) is carried on in connection only with the supply, by a body corporate to which this section applies, of goods or services of a description specified in Part I of Schedule 5 to this Act, . . . F1

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . [F2 F1 or

(c) is carried on in connection only with the supply of electricity by a licence holder within the meaning of Part I of the Electricity Act 1989 [F3or Part II of the Electricity (Northern Ireland) Order 1992].][F4or

(d) is carried on in connection only with the conveyance or supply of gas by a licence holder within the meaning of Part II of the Gas (Northern Ireland) Order 1996;]

(2) This section applies to any body corporate which fulfils the following conditions, that is to say—

(a) that the affairs of the body corporate are managed by its members, and

(b) that by virtue of an enactment those members are appointed by a Minister;

and in this section “Minister” includes a [F5Northern Ireland department], and “the appropriate Minister”, in relation to a body corporate, means the Minister by whom members of that body corporate are appointed.

[F6(2A) In this section “the appropriate Minister”, in relation to a licence holder within the meaning of Part I of the Electricity Act 1989, means the Secretary of State responsible for matters relating to energy.]

[F7(2B) In this section “the appropriate Minister” in relation to a licence holder within the meaning of Part II of the Electricity (Northern Ireland) Order 1992 [F8or Part II of the Gas (Northern Ireland) Order 1996], means the Department of Economic Development.]

(3) The Secretary of State may by order made by statutory instrument vary any of the provisions of Schedule 5 to this Act, either by adding one or more further entries or by altering or deleting any entry for the time being contained in it; and any reference in this Act to that Schedule shall be construed as a reference to that Schedule as for the time being in force.

17 Reference to Advisory Committee proposing recommendation to Secretary of State to make an order

(1) This section applies to any reference made to the Advisory Committee by the Director under section 14 of this Act which includes proposals in accordance with the following provisions of this section.

(2) Where it appears to the Director that a consumer trade practice has the effect, or is likely to have the effect,—

(a) of misleading consumers as to, or withholding from them adequate information as to, or an adequate record of, their rights and obligations under relevant consumer transactions, or

(b) of otherwise misleading or confusing consumers with respect to any matter in connection with relevant consumer transactions, or

(c) of subjecting consumers to undue pressure to enter into relevant consumer transactions, or

(d) of causing the terms of conditions, on or subject to which consumers enter into relevant consumer transactions, to be so adverse to them as to be inequitable,

any reference made by the Director under section 14 of this Act with respect to that consumer trade practice may, if the Director thinks fit, include proposals for recommending to the Secretary of State that he should exercise his powers under the following provisions of this Part of this Act with respect to that consumer trade practice.

(3) A reference to which this section applies shall state which of the effects specified in subsection (2) of this section it appears to the Director that the consumer trade practice in question has or is likely to have.

(4) Where the Director makes a reference to which this section applies, he shall arrange for it to be published in full in the London, Edinburgh and Belfast Gazettes.

(5) In this Part of this Act “relevant consumer transaction”, in relation to a consumer trade practice, means any transaction to which a person is, or may be invited to become, a party in his capacity as a consumer in relation to that practice.

18 No such recommendation to be made except in pursuance of reference to which s. 17 applies

The Director shall not make any recommendation to the Secretary of State to exercise his powers under the following provisions of this Part of this Act except by way of making a reference to the Advisory Committee to which section 17 of this Act applies.

19 Scope of recommendation proposed in reference to which s. 17 applies

(1) In formulating any proposals which, in accordance with the provisions of section 17 of this Act, are included in a reference to which that section applies, the Director shall have regard—

(a) to the particular respects in which it appears to him that the consumer trade practice specified in the reference may adversely affect the economic interests of consumers in the United Kingdom, and

(b) to the class of relevant consumer transactions, or the classes (whether being some or all classes) of such transactions, in relation to which it appears to him that the practice may so affect those consumers;

and the proposed recommendation shall be for an order making, in relation to relevant consumer transactions of that class or of those classes, as the case may be, such provision specified in the proposals as the Director may consider requisite for the purpose of preventing the continuance of that practice, or causing it to be modified, in so far as it may so affect those consumers in those respects.

(2) Without prejudice to the generality of the preceding subsection, for the purpose mentioned in that subsection any such proposals may in particular recommend the imposition by such an order of prohibitions or requirements of any description specified in Schedule 6 to this Act.

(3) In that Schedule, in its application to any such proposals, “the specified consumer trade practice” means the consumer trade practice specified in the reference in which the proposals are made, “specified consumer transactions” means transactions which are relevant consumer transactions in relation to that consumer trade practice and are of a description specified in the proposals, and “specified” (elsewhere than in those expressions) means specified in the proposals.

20 Time-limit and quorum for report on reference to which s. 17 applies

(1) A report of the Advisory Committee on a reference to which section 17 of this Act applies shall not have effect, and no action shall be taken in relation to it under the following provisions of this Part of this Act, unless the report is made before the end of the period of three months beginning with the date of the reference or of such further period or periods (if any) as may be allowed by the Secretary of State.

(2) The Secretary of State shall not allow any further period for such a report except after consulting the Advisory Committee and considering any representations made by them with respect to the proposal to allow a further period.

(3) No such further period shall be longer than three months; but (subject to subsection (2) of this section) two or more further periods may be allowed in respect of the same reference.

(4) The quorum necessary for a meeting of the Advisory Committee held for the final settling of a report of the Committee on a reference to which section 17 of this Act applies shall be not less than two-thirds of the members of the Committee.

21 Report of Advisory Committee on reference to which s. 17 applies

(1) A report of the Advisory Committee on a reference to which section 17 of this Act applies shall state the conclusions of the Committee on the questions—

(a) whether the consumer trade practice specified in the reference adversely affects the economic interests of consumers in the United Kingdom, and

(b) if so, whether it does so be reason, or partly by reason, that it has or is likely to have such one or more of the effects specified in section 17(2) of this Act as are specified in the report.

(2) If, in their conclusions set out in such a report, the Advisory Committee find that the consumer trade practice specified in the reference does adversely affect the economic interests of consumers in the United Kingdom, and does so wholly or partly for the reason mentioned in subsection (1)(b) of this section, the report shall state whether the Committee—

(a) agree with the proposals set out in the reference, or

(b) would agree with those proposals if they were modified in a manner specified in the report, or

(c) disagree with the proposals and do not desire to suggest any such modifications.

(3) Every report of the Advisory Committee on a reference to which section 17 of this Act applies shall be made to the Secretary of State, and shall set out in full the reference on which it is made.

Order in pursuance of report of Advisory Committee

22 Order of Secretary of State in pursuance of report on reference to which s. 17 applies

(1) The provisions of this section shall have effect where a report of the Advisory Committee on a reference to which section 17 of this Act applies has been laid before Parliament in accordance with the provisions of Part VII of this Act, and the report states that the Committee—

(a) agree with the proposals set out in the reference, or

(b) would agree with those proposals if they were modified in a manner specified in the report.

(2) In the circumstances mentioned in the preceding subsection, the Secretary of State may, if he thinks fit, by an order made by statutory instrument make such provision as—

(a) in a case falling within paragraph (a) of the preceding subsection, is in his opinion appropriate for giving effect to the proposals set out in the reference, or

(b) in a case falling within paragraph (b) of that subsection, is in his opinion appropriate for giving effect either to the proposals as set out in the reference or to those proposals as modified in the manner specified in the report, as the Secretary of State may in his discretion determine.

(3) Any such order may contain such supplementary or incidental provisions as the Secretary of State may consider appropriate in the circumstances; and (without prejudice to the generality of this subsection) any such order may restrict the prosecution of offences under the next following section in respect of contraventions of the order where those contraventions also constitute offences under another enactment.

(4) No such order, and no order varying or revoking any such order, shall be made under this section unless a draft of the order has been laid before Parliament and approved by a resolution of each House of Parliament.

23 Penalties for contravention of order under s. 22

Subject to the following provisions of this Part of this Act, any person who contravenes a prohibition imposed by an order under section 22 of this Act, or who does not comply with a requirement imposed by such an order which applies to him, shall be guilty of an offence and shall be liable—

(a) on summary conviction, to a fine not exceeding £400;

(b) on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years or both.

24 Offences due to default of other person

Where the commission by any person of an offence under section 23 of this Act is due to the act or default of some other person, that other person shall be guilty of the offence, and a person may be charged with and convicted of the offence by virtue of this section whether or not proceedings are taken against the first-mentioned person.

25 Defences in proceedings under s. 23

(1) In any proceedings for an offence under section 23 of this Act it shall, subject to subsection (2) of this section, be a defence for the person charged to prove—

(a) that the commission of the offence was due to a mistake, or to reliance on information supplied to him, or to the act or default of another person, an accident or some other cause beyond his control, and

(b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.

(2) If in any case the defence provided by the preceding subsection involves the allegation that the commission of the offence was due to the act or default of another person or to reliance on information supplied by another person, the person charged shall not, without leave of the court, be entitled to rely on that defence unless, within a period ending seven clear days before the hearing, he has served on the prosecutor a notice in writing, giving such information identifying or assisting in the identification of that other person as was then in his possession.

(3) In proceedings for an offence under section 23 of this Act committed by the publication of an advertisement, it shall be a defence for the person charged to prove that he is a person whose business it is to publish or arrange for the publication of advertisements, and that he received the advertisement for publication in the ordinary course of business and did not know and had no reason to suspect that its publication would amount to an offence under section 23 of this Act.

26 Limitation of effect of orders under s. 22

A contract for the supply of goods or services shall not be void or unenforceable by reason only of a contravention of an order made under section 22 of this Act; and, subject to the provisions of [F1section 18 of the M1Interpretation Act 1978] (which relates to offences under two or more laws), the provisions of this Part of this Act shall not be construed as—

(a) conferring a right of action in any civil proceedings (other than proceedings for the recovery of a fine) in respect of any contravention of such an order, or

(b) affecting any restriction imposed by or under any other enactment, whether public, local or private, or

(c) derogating from any right of action or other remedy (whether civil or criminal) in proceedings instituted otherwise than under this Part of this Act.

Enforcement of orders

27 Enforcing authorities

(1) It shall be the duty of every local weights and measures authority to enforce within their area the provisions of any order made under section 22 of this Act; . . . F1

(2) Nothing in subsection (1) shall be taken as authorising a local weights and measures authority in Scotland to institute proceedings for an offence.

28 Power to make test purchases

A local weights and measures authority may make, or may authorise any of their officers to make on their behalf, such purchases of goods, and may authorise any of their officers to obtain such services, as may be expedient for the purpose of determining whether or not the provisions of any order made under section 22 of this Act are being complied with.

29 Power to enter premises and inspect and seize goods and documents

(1) A duly authorised officer of a local weights and measures authority, or a person duly authorised in writing by the Secretary of State, may at all reasonable hours, and on production, if required, of his credentials, exercise the following powers, that is to say—

(a) he may, for the purpose of ascertaining whether any offence under section 23 of this Act has been committed, inspect any goods and enter any premises other than premises used only as a dwelling;

(b) if he has reasonable cause to suspect that an offence under that section has been committed, he may, for the purpose of ascertaining whether it has been committed, require any person carrying on a business or employed in connection with a business to produce any books or documents relating to the business and may take copies of, or of any entry in, any such book or document;

(c) if he has reasonable cause to believe that such an offence has been committed, he may seize and detain any goods for the purpose of ascertaining, by testing or otherwise, whether the offence has been committed;

(d) he may seize and detain any goods or documents which he has reason to believe may be required as evidence in proceedings for such an offence;

(e) he may, for the purpose of exercising his powers under this subsection to seize goods, but only if and to the extent that it is reasonably necessary in order to secure that the provisions of an order made under section 22 of this Act are duly observed, require any person having authority to do so to break open any container or open any vending machine and, if that person does not comply with the requirement, he may do so himself.

(2) A person seizing any goods or documents in the exercise of his powers under this section shall inform the person from whom they are seized and, in the case of goods seized from a vending machine, the person whose name and address are stated on the machine as being the proprietor’s or, if no name and address are so stated, the occupier of the premises on which the machine stands or to which it is affixed.

(3) If a justice of the peace, on sworn information in writing,—

(a) is satisfied that there is reasonable ground to believe either—

(i) that any goods, books or documents which a person has power under this section to inspect are on any premises and that their inspection is likely to disclose evidence of the commission of an offence under section 23 of this Act, or

(ii) that any offence under section 23 has been, is being or is about to be committed on any premises, and

(b) is also satisfied either—

(i) that admission to the premises has been or is likely to be refused and that notice of intention to apply for a warrant under this subsection has been given to the occupier, or

(ii) that an application for admission, or the giving of such a notice, would defeat the object of the entry or that the premises are unoccupied or that the occupier is temporarily absent, and it might defeat the object of the entry to await his return,

the justice may by warrant under his hand, which shall continue in force for a period of one month, authorise any such officer or other person as is mentioned in subsection (1) of this section to enter the premises, if need be by force.

In the application of this subsection to Scotland, “justice of the peace” shall be construed as including a sheriff and a magistrate.

(4) A person entering any premises by virtue of this section may take with him such other persons and such equipment as may appear to him necessary; and on leaving any premises which he has entered by virtue of a warrant under subsection (3) of this section he shall, if the premises are unoccupied or the occupier is temporarily absent, leave them as effectively secured against trespassers as he found them.

(5) Nothing in this section shall be taken to compel the production by a barrister, advocate or solicitor of a document containing a privileged communication made by or to him in that capacity or to authorise the taking of possession of any such document which is in his possession.

30 Offences in connection with exercise of powers under s. 29

(1) Subject to subsection (6) of this section, any person who—

(a) wilfully obstructs any such officer or person as is mentioned in subsection (1) of section 29 of this Act acting in the exercise of any powers conferred on him by or under that section, or

(b) wilfully fails to comply with any requirement properly made to him by such an officer or person under that section, or

(c) without reasonable cause fails to give to such an officer or person so acting any other assistance or information which he may reasonably require of him for the purpose of the performance of his functions under this Part of this Act,

shall be guilty of an offence.

(2) If any person, in giving any such information as is mentioned in subsection (1)(c) of this section, makes any statement which he knows to be false, he shall be guilty of an offence.

(3) If any person discloses to any other person—

(a) any information with respect to any manufacturing process or trade secret obtained by him in premises which he has entered by virtue of section 29 of this Act, or

(b) any information obtained by him under that section or by virtue of subsection (1) of this section,

he shall, unless the disclosure was made in the performance of his duty, be guilty of an offence.

(4) If any person who is neither a duly authorised officer of a weights and measures authority nor a person duly authorised in that behalf by the Secretary of State purports to act as such under section 29 of this Act or under this section, he shall be guilty of an offence.

(5) Any person guilty of an offence under subsection (1) of this section shall be liable on summary conviction to a fine not exceeding [F1level 3 on the standard scale]; and any person guilty of an offence under subsection (2), subsection (3) or subsection (4) of this section shall be liable—

(a) on summary conviction, to a fine not exceeding £400;

(b) on conviction on indictment, to a fine or to imprisonment for a term not exceeding two years or to both.

(6) Nothing in this section shall be construed as requiring a person to answer any question or give any information if to do so might incriminate that person or (where that person is married) the husband or wife of that person.

31 Notice of test

Where any goods seized or purchased by a person in pursuance of this Part of this Act are submitted to a test, then—

(a) if the goods were seized, he shall inform any such person as is mentioned in section 29(2) of this Act of the result of the test;

(b) if the goods were purchased and the test leads to the institution of proceedings for an offence under section 23 of this Act, he shall inform the person from whom the goods were purchased, or, in the case of goods sold through a vending machine, the person mentioned in relation to such goods in section 29(2) of this Act, of the result of the test;

and where, as a result of the test, proceedings for an offence under section 23 of this Act are instituted against any person, he shall allow that person to have the goods tested on his behalf if it is reasonably practicable to do so.

32 Compensation for loss in respect of goods seized under s. 29

(1) Where in the exercise of his powers under section 29 of this Act a person seizes and detains any goods, and their owner suffers loss by reason of their being seized or by reason that the goods, during the detention, are lost or damaged or deteriorate, unless the owner is convicted of an offence under section 23 of this Act committed in relation to the goods, the appropriate authority shall be liable to compensate him for the loss so suffered.

(2) Any disputed question as to the right to or the amount of any compensation payable under this section shall be determined by arbitration and, in Scotland, by a single arbiter appointed, failing agreement between the parties, by the sheriff.

(3) In this section “the appropriate authority”—

(a) in relation to goods seized by an officer of a local weights and measures authority, means that authority, and

(b) in any other case, means the Secretary of State.

33 Application of Part II to Northern Ireland

(1) It shall be the duty of [F1the Department of Commerce for Northern Ireland] to enforce in Northern Ireland the provisions of any order under section 22 of this Act.

(2) In the application of this Part of this Act to Northern Ireland—

(a) section 27 shall not apply;

(b) in sections 28 and 29, any reference to a local weights and measures authority shall be construed as a reference to [F1the Department of Commerce for Northern Ireland], and the provisions of sections 30 to 32 shall be construed accordingly;

(c) in section 29(3), any reference to a justice of the peace shall be construed as a reference to a resident magistrate; and

F2(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III Additional Functions of Director for Protection of Consumers

34 Action by Director with respect to course of conduct detrimental to interests of consumers

(1) Where it appears to the Director that the person carrying on a business has in the course of that business persisted in a course of conduct which—

(a) is detrimental to the interests of consumers in the United Kingdom, whether those interests are economic interests or interests in respect of health, safety or other matters, and

(b) in accordance with the following provisions of this section is to be regarded as unfair to consumers,

the Director shall use his best endeavours, by communication with that person or otherwise, to obtain from him a satisfactory written assurance that he will refrain from continuing that course of conduct and from carrying on any similar course of conduct in the course of that business.

(2) For the purposes of subsection (1)(b) of this section a course of conduct shall be regarded as unfair to consumers if it consists of contraventions of one or more enactments which impose duties, prohibitions or restrictions enforceable by criminal proceedings, whether any such duty, prohibition or restriction is imposed in relation to consumers as such or not and whether the person carrying on the business has or has not been convicted of any offence in respect of any such contravention.

(3) A course of conduct on the part of the person carrying on a business shall also be regarded for those purposes as unfair to consumers if it consists of things done, or omitted to be done, in the course of that business in breach of contract or in breach of a duty (other than a contractual duty) owed to any person by virtue of any enactment or rule of law and enforceable by civil proceedings, whether (in any such case) civil proceedings in respect of the breach of contract or breach of duty have been brought or not.

(4) For the purpose of determining whether it appears to him that a person has persisted in such a course of conduct as is mentioned in subsection (1) of this section, the Director shall have regard to either or both of the following, that is to say—

(a) complaints received by him, whether from consumers or from other persons;

(b) any other information collected by or furnished to him, whether by virtue of this Act or otherwise.

35 Proceedings before Restrictive Practices Court

If, in the circumstances specified in subsection (1) of section 34 of this Act,—

(a) the Director is unable to obtain from the person in question such an assurance as is mentioned in that subsection, or

(b) that person has given such an assurance and it appears to the Director that he has failed to observe it,

the Director may bring proceedings against him before [F1a relevant Court].

36 Evidence in proceedings under s. 35

(1) For the purposes of section 11 of the M1Civil Evidence Act 1968, section 10 of the M2Law Reform (Miscellaneous Provisions) (Scotland) Act 1968 or section 7 of the M3Civil Evidence Act (Northern Ireland) 1971 (each of which relates to convictions as evidence in civil proceedings), proceedings under section 35 of this Act shall (without prejudice to the generality of the relevant definition) be taken to be civil proceedings within the meaning of the Act in question.

(2) Where in any proceedings under section 35 of this Act the Director alleges such a breach of contract or breach of duty as is mentioned in section 34(3) of this Act, a judgment of any court given in civil proceedings, which includes a finding that the breach of contract or breach of duty in question was committed,—

(a) shall be admissible in evidence for the purpose of proving the breach of contract or breach of duty, and

(b) shall, unless the contrary is proved, be taken to be sufficient evidence that the breach of contract or breach of duty was committed.

(3) For the purposes of subsection (2) of this section no account shall be taken of a judgment given in any civil proceedings if it has subsequently been reversed on appeal, or has been varied on appeal so as to negative the finding referred to in that subsection.

(4) In subsection (1) of this section “the relevant definition” means section 18(1) of the M4Civil Evidence Act 1968, section 17(1) of the M5Law Reform (Miscellaneous Provisions) (Scotland) Act 1968 or section 14(1) of the M6Civil Evidence Act (Northern Ireland) 1971, as the case may be.

37 Order of, or undertaking given to, Court in proceedings under s. 35

(1) Where in any proceedings before [F1a relevant Court] under section 35 of this Act—

(a) the Court finds that the person against whom the proceedings are brought (in this section referred to as “the respondent”) has in the course of a business carried on by him persisted in such a course of conduct as is mentioned in section 34(1) of this Act, and

(b) the respondent does not give an undertaking to the Court under subsection (3) of this section which is accepted by the Court, and

(c) it appears to the Court that, unless an order is made against the respondent under this section, he is likely to continue that course of conduct or to carry on a similar course of conduct,

the Court may make an order against the respondent under this section.

(2) An order of the Court under this section shall (with such degree of particularity as appears to the Court to be sufficient for the purposes of the order) indicate the nature of the course of conduct to which the finding of the Court under subsection (1)(a) of this section relates, and shall direct the respondent—

(a) to refrain from continuing that course of conduct, and

(b) to refrain from carrying on any similar course of conduct in the course of his business.

(3) Where in any proceedings under section 35 of this Act the Court makes such a finding as is mentioned in subsection (1)(a) of this section, and the respondent offers to give to the Court an undertaking either—

(a) to refrain as mentioned in paragraphs (a) and (b) of subsection (2) of this section, or

(b) to take particular steps which, in the opinion of the Court, would suffice to prevent a continuance of the course of conduct to which the complaint relates and to prevent the carrying on by the respondent of any similar course of conduct in the course of his business,

the Court may, if it thinks fit, accept that undertaking instead of making an order under this section.

38 Provisions as to persons consenting to or conniving at courses of conduct detrimental to interests of consumers

(1) The provisions of this section shall have effect where it appears to the Director—

(a) that a body corporate has in the course of a business carried on by that body persisted in such a course of conduct as is mentioned in section 34(1) of this Act, and

(b) that the course of conduct in question has been so persisted in with the consent or connivance of a person (in this and the next following section referred to as “the accessory”) who at a material time fulfilled the relevant conditions in relation to that body.

(2) For the purposes of this section a person shall be taken to fulfil the relevant conditions in relation to a body corporate at any time if that person either—

(a) is at that time a director, manager, secretary or other similar officer of the body corporate or a person purporting to act in any such capacity, or

(b) whether being an individual or a body of persons, corporate or unincorporate, has at that time a controlling interest in that body corporate.

(3) If, in the circumstances specified in subsection (1) of this section,—

(a) the Director has used his best endeavours to obtain from the accessory such an assurance as is mentioned in the next following subsection and has been unable to obtain such an assurance from him, or

(b) the accessory has given such an assurance to the Director and it appears to the Director that he has failed to observe it,

the Director may bring proceedings against the accessory before [F1a relevant Court].

(4) The assurance referred to in subsection (3) of this section is a satisfactory written assurance given by the accessory that he will refrain—

(a) from continuing to consent to or connive at the course of conduct in question;

(b) from carrying on any similar course of conduct in the course of any business which may at any time be carried on by him; and

(c) from consenting to or conniving at the carrying on of any such course of conduct by any other body corporate in relation to which, at any time when that course of conduct is carried on, he fulfils the relevant conditions.

(5) Proceedings may be brought against the accessory under this section whether or not any proceedings are brought under section 35 of this Act against the body corporate referred to in subsection (1) of this section.

(6) Section 36 of this Act shall have effect in relation to proceedings under this section as it has effect in relation to proceedings under section 35 of this Act.

(7) For the purposes of this section a person (whether being an individual or a body of persons, corporate or unincorporate) has a controlling interest in a body corporate if (but only if) that person can, directly or indirectly, determine the manner in which one-half of the votes which could be cast at a general meeting of the body corporate are to be cast on matters, and in circumstances, not of such a description as to bring into play any special voting rights or restrictions on voting rights.

39 Order of, or undertaking given to, Court in proceedings under s. 38

(1) Where in any proceedings brought against the accessory before [F1a relevant Court] under section 38 of this Act—

(a) the Court finds that the conditions specified in paragraphs (a) and (b) of subsection (1) of that section are fulfilled in the case of the accessory, and

(b) the accessory does not give an undertaking to the Court under subsection (3) of this section which is accepted by the Court, and

(c) it appears to the Court that, unless an order is made against the accessory under this section, it is likely that he will not refrain from acting in one or more of the ways mentioned in paragraphs (a) to (c) of subsection (4) of that section,

the Court may make an order against the accessory under this section.

(2) An order of the Court under this section shall (with such degree of particularity as appears to the Court to be sufficient for the purposes of the order) indicate the nature of the course of conduct to which the finding of the Court under subsection (1)(a) of this section relates, and shall direct the accessory, in relation to the course of conduct so indicated, to refrain from acting in any of the ways mentioned in paragraphs (a) to (c) of subsection (4) of section 38 of this Act.

(3) Where in any proceedings under section 38 of this Act the Court makes such a finding as is mentioned in subsection (1)(a) of this section, and the accessory offers to give to the Court an undertaking either—

(a) to refrain from acting in any of the ways mentioned in paragraphs (a) to (c) of subsection (4) of that section, or

(b) to take particular steps which, in the opinion of the Court, would suffice to prevent him from acting in any of those ways,

the Court may, if it thinks fit, accept that undertaking instead of making an order under this section.

40 Provisions as to interconnected bodies corporate

(1) This section applies to any order made under section 37 or section 39 of this Act.

(2) Where an order to which this section applies is made against a body corporate which is a member of a group of interconnected bodies corporate, [F1a relevant Court], on making the order, may direct that it shall be binding upon all members of the group as if each of them were the body corporate against which the order is made.

(3) Where an order to which this section applies has been made against a body corporate, and at a time when that order is in force—

(a) the body corporate becomes a member of a group of interconnected bodies corporate, or

(b) a group of interconnected bodies corporate of which it is a member is increased by the addition of one or more further members,

the Restrictive Practices Court, on the application of the Director, may direct that the order shall thereafter be binding upon each member of the group as if it were the body corporate against which the order was made.

(4) The power conferred by subsection (3) of this section shall be exercisable—

(a) whether, at the time when the original order was made, the body corporate against which it was made was a member of a group of interconnected bodies corporate or not, and

(b) if it was such a member, whether a direction under subsection (2) of this section was given or not.

41 Concurrent Jurisdiction of other courts in certain cases

(1) In any case where—

(a) the Director could bring proceedings against a person before [F1a relevant Court] under section 35 or section 38 of this Act, and

(b) it appears to the Director that the conditions specified in the next following subsection are fulfilled,

the Director may, if he thinks fit, bring those proceedings in an appropriate alternative court instead of bringing them before the Restrictive Practices Court; and, in relation to any proceedings brought by virtue of this section, the appropriate alternative court in which they are brought shall have the like jurisdiction as the Restrictive Practices Court would have had if they had been brought in that Court.

(2) The conditions referred to in the preceding subsection are—

(a) that neither the person against whom the proceedings are to be brought nor the person against whom any associated proceedings have been or are intended to be brought is a body corporate having a share capital, paid up or credited as paid up, of an amount exceeding £10,000, and

(b) that neither those proceedings nor any associated proceedings involve or are likely to involve the determination of a question (whether of law or of fact) of such general application as to justify its being reserved for determination by the Restrictive Practices Court.

(3) For the purposes of this section, the following shall be appropriate alternative courts in relation to proceedings in respect of a course of conduct maintained in the course of a business, that is to say, the county court for any district (or, in Northern Ireland, any division) in which, or, in Scotland, any sheriff court within whose jurisdiction, that business is carried on.

(4) In relation to any proceedings brought in an appropriate alternative court by virtue of this section, or to any order made in any such proceedings, any reference in section 37, in section 39 or section 40 of this Act to the Restrictive Practices Court shall be construed as a reference to the appropriate alternative court in which the proceedings are brought.

(5) In this section “associated proceedings”—

(a) in relation to proceedings under section 35 of this Act, means proceedings under section 38 of this Act against a person as being a person consenting to or conniving at the course of conduct in question, and

(b) in relation to proceedings under section 38 of this Act, means proceedings under section 35 of this Act against a person as being the person by whom the course of conduct in question has been maintained.

[ F141A Meaning of “relevant Court”

In this Part of this Act, “relevant Court”, in relation to proceedings in respect of a course of conduct maintained in the course of a business, means any of the following courts in whose jurisdiction that business is carried on—

(a) in England and Wales or Northern Ireland, the High Court;

(b) in Scotland, the Court of Session.]

42 Appeals from decisions or orders of courts under Part III

(1) Notwithstanding anything in any other enactment, an appeal, whether on a question of fact or on a question of law, shall lie from any decision or order of any court in proceedings under Part III of this Act [F1; but this subsection is subject to subsection (3) of this section].

(2) Any such appeal shall lie—

(a) in the case of proceedings in England and Wales, to the Court of Appeal;

(b) in the case of proceedings in Scotland [F2from the sheriff court], to the Court of Session;

(c) in the case of proceedings in Northern Ireland, to the Court of Appeal in Northern Ireland.

[ F3(3) A decision or order of the Court of Session as the relevant Court may be reviewed, whether on a question of fact or on a question of law, by reclaiming to the Inner House.]

43 Legal aid in proceedings under Part III in Restrictive Practices Court

(1) The paragraph set out in the next following subsection shall be inserted—

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F1

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2

(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F3

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F4

Part IV Functions of Director and Commission in Relation to Monopoly Situations and Uncompetitive Practices

Powers for Director to require information

44 General power for Director to require information

(1) Where it appears to the Director that there are grounds for believing—

(a) that a monopoly situation may exist in relation to the supply of goods or services of any description, or in relation to exports of goods of any description from the United Kingdom, and

(b) that in accordance with the following provisions of this Part of this Act he would not be precluded from making a monopoly reference to the Commission with respect to the existence or possible existence of that situation,

[ F1the Director may exercise the powers conferred by subsection (2) below for the purpose of assisting him in determining whether to take either of the following decisions with regard to that situation.]

[F2(1A) Those decisions are—

(a) whether to make a monopoly reference with respect to the existence or possible existence of the situation;

(b) whether, instead, to make a proposal under section 56A below for the Secretary of State to accept undertakings.]

[F3(2) In the circumstances and for the purpose mentioned in subsection (1) above, the Director may—

(a) require any person within subsection (3) below to produce to the Director, at a specified time and place—

(i) any specified documents, or

(ii) any document which falls within a specified category,

which are in his custody or under his control and which are relevant;

(b) require any person within subsection (3) below who is carrying on a business to give the Director specified estimates, forecasts, returns, or other information, and specify the time at which and the form and manner in which the estimates, forecasts, returns or information are to be given;

(c) enter any premises used by a person within subsection (3) below for business purposes, and—

(i) require any person on the premises to produce any documents on the premises which are in his custody or under his control and which are relevant;

(ii) require any person on the premises to give the Director such explanation of the documents as he may require.

(3) A person is within this subsection if—

(a) he produces goods of the description in question in the United Kingdom;

(b) he supplies goods or (as the case may be) services of the description in question in the United Kingdom; or

(c) such goods (or services) are supplied to him in the United Kingdom.

(4) The power to impose a requirement under subsection (2)(a) or (b) above is to be exercised by notice in writing served on the person on whom the requirement is imposed; and “specified” in those provisions means specified or otherwise described in the notice, and “specify” is to be read accordingly.

(5) The power under subsection (2)(a) above to require a person (“the person notified”) to produce a document includes power—

(a) if the document is produced—

(i) to take copies of it or extracts from it;

(ii) to require the person notified, or any person who is a present or past officer of his, or is or was at any time employed by him, to provide an explanation of the document;

(b) if the document is not produced, to require the person notified to state, to the best of his knowledge and belief, where it is.

(6) Nothing in this section confers power to compel any person—

(a) to produce any document which he could not be compelled to produce in civil proceedings before the High Court or, in Scotland, the Court of Session; or

(b) in complying with any requirement for the giving of information, to give any information which he could not be compelled to give in evidence in such proceedings.

(7) No person has to comply with a requirement imposed under subsection (2) above by a person acting under an authorisation under paragraph 7 of Schedule 1 to this Act unless evidence of the authorisation has, if required, been produced.

(8) For the purposes of subsection (2) above—

(a) a document is relevant if—

(i) it is relevant to a decision mentioned in subsection (1A) above; and

(ii) the powers conferred by this section are exercised in relation to the document for the purpose of assisting the Director in determining whether to take that decision;

(b) “document” includes information recorded in any form; and

(c) in relation to information recorded otherwise than in legible form, the power to require its production includes power to require production of it in legible form, so far as the means to do so are within the custody or under the control of the person on whom the requirement is imposed.]

F145 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

46 Supplementary provisions as to requirements to furnish information

F1(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2

[F3(4) Any person who refuses or wilfully neglects to comply with a requirement imposed under section 44(2) above is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the prescribed sum, or

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.

(5) If a person is charged with an offence under subsection (4) in respect of a requirement to produce a document, it is a defence for him to prove—

(a) that the document was not in his possession or under his control; and

(b) that it was not reasonably practicable for him to comply with the requirement.

(6) If a person is charged with an offence under subsection (4) in respect of a requirement—

(a) to provide an explanation of a document, or

(b) to state where a document is to be found,

it is a defence for him to prove that he had a reasonable excuse for failing to comply with the requirement.

(7) A person who intentionally obstructs the Director in the exercise of his powers under section 44 is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the prescribed sum;

(b) on conviction on indictment, to a fine.

(8) A person who wilfully alters, suppresses or destroys any document which he has been required to produce under section 44(2) is guilty of an offence and liable—

(a) on summary conviction, to a fine not exceeding the prescribed sum;

(b) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.]

Monopoly references

47 General provisions as to monopoly references

(1) A monopoly reference—

(a) shall specify the description of goods or services to which it relates;

(b) in the case of a reference relating to goods, shall state whether it relates to the supply of goods or to exports of goods from the United Kingdom or to both; and

(c) if, for the purposes of the reference, consideration is to be limited to a part of the United Kingdom, shall specify the part of the United Kingdom to which consideration is to be limited,

and (subject to the next following subsection) shall be framed in one or other of the ways specified in section 48 or section 49 of this Act.

(2) A monopoly reference (whether it falls within section 48 or within section 49 of this Act) may be so framed as to require the Commission to exclude from consideration, or to limit consideration to,—

(a) such agreements as are mentioned in paragraph (d) of section 6(1) or paragraph (d) of section 7(1) of this Act (or in either of those paragraphs as modified by section 9(2) of this Act) or as are mentioned in subsection (2) or subsection (3) of section 8 of this Act, or

(b) agreements or practices whereby persons conduct their affairs as mentioned in section 6(2) or section 7(2) of this Act,

or to exclude from consideration, or to limit consideration to, such one or more agreements or practices falling within paragraph (a) or paragraph (b) of this subsection as are specified in the reference.

48 Monopoly reference limited to the facts

A monopoly reference may be so framed as to require the Commission only to investigate and report on the questions whether a monopoly situation exists in relation to the matters set out in the reference in accordance with section 47 of this Act and, if so,—

(a) by virtue of which provisions of sections 6 to 8 of this Act that monopoly situation is to be taken to exist;

(b) in favour of what person or persons that monopoly situation exists;

(c) whether any steps (by way of uncompetitive practices or otherwise) are being taken by that person or those persons for the purpose of exploiting or maintaining the monopoly situation and, if so, by what uncompetitive practices or in what other way; and

(d) whether any action or omission on the part of that person or those persons is attributable to the existence of the monopoly situation and, if so, what action or omission and in what way it is so attributable;

and a monopoly reference so framed is in this Act referred to as a “monopoly reference limited to the facts”.

49 Monopoly reference not limited to the facts

(1) A monopoly reference may be so framed as to require the Commission to investigate and report on the question whether a monopoly situation exists in relation to the matters set out in the reference in accordance with section 47 of this Act and, if so, to investigate and report—

(a) on the questions mentioned in paragraphs (a) to (d) of section 48 of this Act, and

(b) on the question whether any facts found by the Commission in pursuance of their investigations under the preceding provisions of this subsection operate, or may be expected to operate, against the public interest.

(2) A monopoly reference may be so framed as to require the Commission to investigate and report on the questions whether a monopoly situation exists in relation to the matters set out in the reference in accordance with section 47 of this Act and, if so,—

(a) by virtue of which provisions of sections 6 to 8 of this Act that monopoly situation is to be taken to exist;

(b) in favour of what person or persons that monopoly situation exists; and

(c) whether any action or omission on the part of that person or those persons in respect of matters specified in the reference for the purposes of this paragraph operates, or may be expected to operate, against the public interest.

(3) For the purposes of subsection (2)(c) of this section any matter may be specified in a monopoly reference if it relates to any of the following, that is to say—

(a) prices charged, or proposed to be charged, for goods or services of the description specified in the reference;

(b) any recommendation or suggestion made as to such prices;

(c) any refusal to supply goods or services of the description specified in the reference;

(d) any preference given to any person (whether by way of discrimination in respect of prices or in respect of priority of supply or otherwise) in relation to the supply of goods or services of that description;

and any matter not falling within any of the preceding paragraphs may be specified for those purposes in a monopoly reference if, in the opinion of the person or persons making the reference, it is of a kind such that (if a monopoly situation is found to exist) that matter might reasonably be regarded as a step taken for the purpose of exploiting or maintaining that situation or as being attributable to the existence of that situation.

(4) A monopoly reference framed in either of the ways mentioned in subsections (1) and (2) of this section is in this Act referred to as a “monopoly reference not limited to the facts”.

50 Monopoly references by Director

(1) Where it appears to the Director that a monopoly situation exists or may exist in relation to—

(a) the supply of goods of any description, or

(b) the supply of services of any description, or

(c) exports of goods of any description from the United Kingdom, either generally or to any particular market,

the Director, subject to section 12 of this Act and to the following provisions of this section, may if he thinks fit make a monopoly reference to the Commission with respect to the existence or possible existence of such a monopoly situation.

(2) [F1Subject to subsection (2A) of this section] no monopoly reference shall be made by the Director with respect to the existence or possible existence of a monopoly situation in relation to the supply of goods or services of any description specified in Part I of Schedule 5 or in Part I of Schedule 7 to this Act.

[F2(2A) Subsection (2) of this section shall not preclude the making of a monopoly reference by the Director with respect to the existence or possible existence of a monopoly situation in relation to the supply of such services as are specified in paragraph 5 of Schedule 5 to this Act in Great Britain, except in relation to the supply of any such services by—

(a) a body corporate to which section 16 of this Act applies;

(b) a subsidiary, within the meaning of section 736 of the M1Companies Act 1985, of any such body corporate; or

(c) a publicly owned railway company, within the meaning of the Railways Act 1993.]

(3) Notwithstanding anything in subsections (3) and (4) of section 10 of this Act—

(a) for the purposes of any monopoly reference made by the Director the supply of goods or services of any description specified in the first column . . . F3 of Part II of Schedule 7 to this Act in any manner specified in relation to that description of goods or services in the second column of Part II of the relevant Schedule shall be taken to be a separate form of supply, and

(b) any monopoly reference made by the Director in relation to the supply of goods or services of any such description shall be limited so as to exclude that form of supply.

(4) For the purposes of any monopoly reference made by the Director in relation to goods of any description specified in the first column of Part III of Schedule 7 to this Act—

(a) the supply of goods of that description in Northern Ireland in any manner specified in relation to that description of goods in the second column of that Part of that Schedule shall be taken to be a separate form of supply, and, notwithstanding anything in section 10(3) and (4) of this Act, any monopoly reference so made in relation to the supply of goods of any such description in Northern Ireland shall be limited so as to exclude that form of supply, and

(b) for the purposes of any such monopoly reference the Director shall so exercise his powers under section 9 of this Act as to comply with the requirements of the preceding paragraph.

(5) The Secretary of State may by order made by statutory instrument vary any of the provisions of Schedule 7 to this Act, either by adding one or more further entries or by altering or deleting any entry for the time being contained in it; and any reference in this Act to that Schedule shall be construed as a reference to that Schedule as for the time being in force.

(6) On making a monopoly reference to the Commission, the Director shall send a copy of it to the Secretary of State; and if, before the end of the period of fourteen days from the day on which the reference is first published in the Gazette in accordance with section 53 of this Act, the Secretary of State directs the Commission not to proceed with the reference,—

(a) the Commission shall not proceed with that reference, but

(b) nothing in the preceding paragraph shall prevent the Commission from proceeding with any subsequent monopoly reference, notwithstanding that it relates wholly or partly to the same matters.

51 Monopoly references by Ministers

(1) Subject to the following provisions of this section, the Secretary of State, or the Secretary of State and any other Minister acting jointly, where it appears to him or them that a monopoly situation exists or may exist in relation to—

(a) the supply of goods of any description, or

(b) the supply of services of any description, or

(c) exports of goods of any description from the United Kingdom, either generally or to any particular market,

may, if the Secretary of State (or, in the case of joint action by the Secretary of State and another Minister, each of them) thinks fit, make a monopoly reference to the Commission with respect to the existence or possible existence of such a monopoly situation.

(2) Where it appears to the Secretary of State that a monopoly situation exists or may exist as mentioned in the preceding subsection, and that the goods or services in question are of a description specified in Part I of, . . . F1, Schedule 5 or Schedule 7 to this Act, the Secretary of State shall not make a monopoly reference with respect to the existence or possible existence of that situation except jointly with such one or more of the Ministers mentioned in the next following subsection as appear to him to have functions directly relating—

(a) to the supply of goods or services of that description in the area (whether consisting of the whole or part of the United Kingdom) in relation to which the question arises, or

(b) to exports of goods of that description from the United Kingdom,

as the case may be.

(3) The Ministers referred to in subsection (2) of this section are the Secretary of State for Scotland, the Secretary of State for Wales, the Secretary of State for Northern Ireland, [F2the Secretary of State for Transport] the Minister of Agriculture, Fisheries and Food, the Minister of Agriculture for Northern Ireland, the Minister of Commerce for Northern Ireland . . . . . . F3

(4) Where it appears to the Secretary of State that a monopoly situation exists or may exist as mentioned in subsection (1) of this section in relation to the supply in Northern Ireland of goods of a description specified in the first column of Part III of Schedule 7 to this Act, the Secretary of State shall not make a monopoly reference with respect to the existence or possible existence of that situation except jointly with the Minister of Agriculture for Northern Ireland.

52 Variation of monopoly reference

(1) Subject to the following provisions of this section, the Director may at any time vary a monopoly reference made by him, and the Secretary of State (or, in the case of a monopoly reference made by the Secretary of State jointly with one or more other Ministers, the Secretary of State and that Minister or those Ministers acting jointly) may vary a monopoly reference made by him or them.

(2) A monopoly reference not limited to the facts shall not be varied so as to become a monopoly reference limited to the facts; but (subject to the following provisions of this section) a monopoly reference limited to the facts may be varied so as to become a monopoly reference not limited to the facts, whether the Commission have already reported on the reference as originally made or not.

(3) A monopoly reference made by the Director shall not be varied so as to become a reference which he is precluded from making by any provisions of section 50 of this Act.

(4) On varying a monopoly reference made by him, the Director shall send a copy of the variation to the Secretary of State; and if, before the end of the period of fourteen days from the day on which the variation is first published in the Gazette in accordance with the next following section, the Secretary of State directs the Commission not to give effect to the variation,—

(a) the Commission shall proceed with the reference as if that variation had not been made, but

(b) nothing in the preceding paragraph shall prevent the Commission from proceeding with any subsequent monopoly reference, or from giving effect to any subsequent variation, notwithstanding that it relates wholly or partly to the matters to which that variation related.

(5) In this section and in sections 53 to 55 of this Act “Minister” includes [F1the Department of Agriculture for Northern Ireland and the Department of Commerce for Northern Ireland].

53 Publication of monopoly references and variations, and of directions relating to them

(1) On making a monopoly reference, or a variation of a monopoly reference, the Director or, as the case may be, the Secretary of State (or, in the case of a monopoly reference or variation made by the Secretary of State acting jointly with one or more other Ministers, the Secretary of State and that Minister or those Ministers acting jointly) shall arrange for the reference or variation to be published in full in the Gazette, and shall arrange for the reference or variation to be published in such other manner as he or they may think most suitable for bringing it to the attention of persons who, in his or their opinion, would be affected by it.

(2) Where the Secretary of State gives a direction under section 50(6) of this Act with respect to a monopoly reference, or gives a direction under section 52(4) of this Act with respect to a variation of a monopoly reference, the Secretary of State shall arrange for the direction to be published in the Gazette and otherwise in the same manner as the monopoly reference or variation was published in accordance with the preceding subsection.

(3) In this section “the Gazette” means the London, Edinburgh and Belfast Gazettes, except that, in relation to a monopoly reference under which consideration is limited to a particular part of the United Kingdom in accordance with section 9 of this Act (including a reference under which consideration is required to be so limited by section 50(4)(b) of this Act), it means such one or more of those Gazettes as are appropriate to that part of the United Kingdom.

(4) In sections 50 and 52 of this Act any reference to publication in the Gazette is a reference to publication in the London Gazette, the Edinburgh Gazette or the Belfast Gazette, whichever first occurs.

54 Report of Commission on monopoly reference

(1) A report of the Commission on a monopoly reference—

(a) if the reference was made by the Director, shall be made to the Secretary of State, and

(b) in any other case, shall be made to the Minister or Ministers by whom the reference was made.

(2) In making their report on a monopoly reference, the Commission shall include in it definite conclusions on the questions comprised in the reference, together with—

(a) such an account of their reasons for those conclusions, and

(b) such a survey of the general position with respect to the subject-matter of the reference, and of the developments which have led to that position,

as in their opinion are expedient for facilitating a proper understanding of those questions and of their conclusions.

(3) Where, on a monopoly reference not limited to the facts, the Commission find that a monopoly situation exists and that facts found by the Commission in pursuance of their investigations under subsection (1) or subsection (2) of section 49 of this Act operate, or may be expected to operate, against the public interest, the report shall specify those facts, and the conclusions to be included in the report, in so far as they relate to the operation of those facts, shall specify the particular effects, adverse to the public interest, which in their opinion those facts have or may be expected to have; and the Commission—

(a) shall, as part of their investigations, consider what action (if any) should be taken for the purpose of remedying or preventing those adverse effects, and

(b) may, if they think fit, include in their report recommendations as to such action.

(4) In paragraph (a) of subsection (3) of this section the reference to action to be taken for the purpose mentioned in that paragraph is a reference to action to be taken for that purpose either—

(a) by one or more Ministers (including [F1Northern Ireland departments]) or other public authorities, or

(b) by the person or (as the case may be) one or more of the persons in whose favour, in accordance with the findings of the Commission, the monopoly situation in question exists.

F2(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

55 Time-limit for report on monopoly reference

(1) A monopoly reference shall specify a period within which the Commission are to report on the reference; and, if a report of the Commission on the reference—

(a) is not made before the end of the period so specified, or

(b) if one or more extended periods are allowed under the next following subsection, is not made before the end of that extended period or of the last of those extended periods, as the case may be,

the reference shall cease to have effect and no action, or (if action has already been taken) no further action, shall be taken in relation to that reference under this Act.

(2) Directions may be given—

(a) in the case of a monopoly reference made by the Director or by the Secretary of State otherwise than jointly with one or more Ministers, by the Secretary of State, or

(b) in the case of a monopoly reference made by the Secretary of State jointly with one or more other Ministers, by the Secretary of State and that Minister or those Ministers acting jointly,

allowing to the Commission such extended period for the purpose of reporting on the reference as may be specified in the directions, or, if the period has already been extended once or more than once by directions under this subsection, allowing to the Commission such further extended period for that purpose as may be so specified.

56 Order of appropriate Minister on report on monopoly reference

(1) The provisions of this section shall have effect where a report of the Commission on a monopoly reference not limited to the facts has been laid before Parliament in accordance with the provisions of Part VII of this Act, and the conclusions of the Commission set out in the report, as so laid,—

(a) include conclusions to the effect that a monopoly situation exists and that facts found by the Commission in pursuance of their investigations under section 49 of this Act operate, or may be expected to operate, against the public interest, and

(b) specify particular effects, adverse to the public interest, which in their opinion those facts have or may be expected to have.

(2) In the circumstances mentioned in the preceding subsection the appropriate Minister may (subject to subsection (6) of this section) by order made by statutory instrument exercise such one or more of the powers specified in Parts I and II of Schedule 8 to this Act as he considers it requisite to exercise for the purpose of remedying or preventing the adverse effects specified in the report as mentioned in the preceding subsection; and those powers may be so exercised to such extent and in such manner as the appropriate Minister considers requisite for that purpose.

(3) In determining whether, or to what extent or in what manner, to exercise any of those powers, the appropriate Minister shall take into account any recommendations included in the report of the Commission in pursuance of section 54(3)(b) of this Act and any advice given by the Director under section 88 of this Act.

(4) Subject to the next following subsection, in this section “the appropriate Minister” means the Secretary of State.

(5) Where, in any such report as is mentioned in subsection (1) of this section, the person or one of the persons specified as being the person or persons in whose favour the monopoly situation in question exists is a body corporate fulfilling the following conditions, that is to say—

(a) that the affairs of the body corporate are managed by its members, and

(b) that by virtue of an enactment those members are appointed by a Minister,

then for the purpose of making any order under this section in relation to that body corporate (but not for the purpose of making any such order in relation to any other person) “the appropriate Minister” in this section means the Minister by whom members of that body corporate are appointed.

(6) In relation to any such body corporate as is mentioned in subsection (5) of this section, the powers exercisable by virtue of subsection (2) of this section shall not include the powers specified in Part II of Schedule 8 to this Act.

[F1 Undertakings as alternative to monopoly reference by Director]

[F1 56A Proposals by Director

(1) The Director may propose that the Secretary of State accept undertakings in lieu of the Director making a monopoly reference if—

(a) he considers that a monopoly situation exists and that there are facts relating to the monopoly situation which may now or in future operate against the public interest,

(b) he intends, apart from the question of undertakings being accepted in lieu, to make a monopoly reference with respect to the existence of the monopoly situation and that the reference should be a monopoly reference not limited to the facts, and

(c) he considers that undertakings offered to be given by particular persons would be sufficient to deal with such of the relevant adverse effects of the monopoly situation as he thinks need to be dealt with.

(2) A proposal under this section shall include—

(a) a statement of the terms of the proposed undertakings and the persons by whom they are proposed to be given,

(b) a statement of the facts relating to the monopoly situation which the Director considers may now or in future operate against the public interest, and

(c) a statement of the effects identified by the Director as the relevant adverse effects of the monopoly situation.

(3) For the purposes of the law relating to defamation, absolute privilege shall attach to anything included in a proposal under this section pursuant to subsection (2)(b) or (c) of this section.

(4) In this section, references to the relevant adverse effects of a monopoly situation are to the particular effects, adverse to the public interest, which the facts relating to the monopoly situation may now or in future have.]

[F1 56B Proposals under section 56A: preparatory steps

(1) The Director may only make a proposal under section 56A of this Act if—

(a) the first or second condition is met, and

(b) the third condition is met.

(2) The first condition is that the Director has published in an appropriate manner a notice containing—

(a) each of the matters mentioned in subsection (5) of this section, and

(b) the invitation mentioned in subsection (6) of this section.

(3) The second condition is that the Director has published in an appropriate manner—

(a) a notice containing the matters mentioned in paragraphs (a) and (b) of subsection (5) of this section, and

(b) a notice containing—

(i) the matters mentioned in paragraphs (c), (d), (e) and (f) of that subsection, and

(ii) the invitation mentioned in subsection (6) of this section.

(4) The third condition is that the Director has considered any representations made to him in accordance with the notice under this section which contains the invitation mentioned in subsection (6) of this section.

(5) The matters referred to above are—

(a) the identity of the person or persons in whose favour the Director considers the monopoly situation exists,

(b) the terms of the proposed monopoly reference,

(c) the facts relating to the monopoly situation which the Director considers may now or in future operate against the public interest,

(d) the effects identified by the Director as the particular effects, adverse to the public interest, which the facts relating to the monopoly situation may now or in future have,

(e) the terms of the undertakings which the Director is, at the time of the notice, considering proposing the Secretary of State accept in lieu of the Director making the proposed monopoly reference (“the potential undertakings”), and

(f) the identity of the persons by whom the potential undertakings would be given.

(6) The invitation referred to above is an invitation to make representations to the Director, within such time as he may specify, about the potential undertakings being the subject of a proposal under section 56A of this Act.

(7) For the purposes of the law relating to defamation, absolute privilege shall attach to anything contained in a notice published under this section.

(8) In this section, references to an appropriate manner, in relation to the publication of a notice by the Director, are to such manner as he considers most suitable for the purpose of bringing the notice to the attention of persons who, in his opinion, are likely to be interested in it.]

[F1 56C Proposals under section 56A: exclusion of sensitive information

(1) The Director shall—

(a) in formulating the statement required by section 56A(2)(b) or (c) of this Act, and

(b) in publishing a notice under section 56B of this Act containing the matters mentioned in subsection (5)(c) and (d) of that section,

have regard to the need for excluding, so far as practicable, any matter to which subsection (2) or (3) of this section applies.

(2) This subsection applies to any matter which relates to the private affairs of an individual, where publication of that matter would or might, in the opinion of the Director, seriously and prejudicially affect the interests of that individual.

(3) This subsection applies to any matter which relates specifically to the affairs of a particular body of persons, whether corporate or unincorporate, where publication of that matter would or might, in the opinion of the Director, seriously and prejudicially affect the interests of that body, unless in his opinion the inclusion of that matter relating specifically to that body is necessary for the purposes of the statement or notice, as the case may be.]

[F1 56D Acceptance by Secretary of State of proposals under section 56A

(1) Where the Secretary of State accepts a proposal under section 56A of this Act, then, within the period of twelve months from the date of acceptance of the undertakings to which the proposal relates, no monopoly reference may be made in the same, or substantially the same, terms as those published by the Director under section 56B of this Act preparatory to making the proposal.

(2) Subsection (1) of this section shall not prevent a reference being made if the Director—

(a) considers that any of the undertakings has been breached, or needs to be varied or superseded, and

(b) has given notice of that fact to the person responsible for giving the undertaking.

(3) The Secretary of State shall send to the Director a copy of every undertaking accepted pursuant to a proposal under section 56A of this Act.

(4) For the purposes of subsection (1) of this section, the Secretary of State shall be treated as accepting a proposal under section 56A of this Act if he accepts the undertakings to which the proposal relates, either in the form in which they were proposed or with such modifications as he thinks fit; and references in this Act to an undertaking accepted pursuant to a proposal under that section shall be construed accordingly.]

[F1 56E Review of undertakings

(1) The Director shall keep the carrying out of an undertaking to which this section applies under review, and from time to time consider whether, by reason of any change of circumstances, the undertaking is no longer appropriate and either—

(a) one or more of the parties to it can be released from it, or

(b) it needs to be varied or to be superseded by a new undertaking.

(2) If it appears to the Director—

(a) that any one or more of the parties to an undertaking to which this section applies can be released from it,

(b) that such an undertaking needs to be varied or to be superseded by a new undertaking, or

(c) that there has been any failure to carry out such an undertaking,

he shall give to the Secretary of State such advice as he may think proper in the circumstances.

(3) Where the Director advises the Secretary of State under subsection (2) of this section that an undertaking needs to be varied or to be superseded by a new undertaking, he shall propose the terms of variation or, as the case may be, the new undertaking.

(4) The Director shall, if the Secretary of State so requests, give him advice with respect to the release, variation or superseding of an undertaking to which this section applies.

(5) In this section, references to an undertaking to which this section applies are to an undertaking accepted—

(a) pursuant to a proposal under section 56A of this Act, or

(b) under section 56F of this Act.]

[F1 56F Release, variation and replacement of undertakings

(1) The Secretary of State may only—

(a) accept a new undertaking in place of an undertaking to which this section applies,

(b) release a person from such an undertaking, or

(c) agree to the variation of such an undertaking,

after considering the advice of the Director on the subject.

(2) The Secretary of State shall send to the Director—

(a) a copy of every undertaking accepted under this section,

(b) particulars of every variation of an undertaking agreed under this section, and

(c) particulars of every release of a person from an undertaking under this section.

(3) In this section, references to an undertaking to which this section applies are to an undertaking accepted—

(a) pursuant to a proposal under section 56A of this Act, or

(b) under this section.]

[F1 56G Publication of undertakings etc

(1) The Secretary of State shall arrange for the publication in such manner as he considers appropriate of—

(a) every undertaking accepted—

(i) pursuant to a proposal under section 56A of this Act, or

(ii) under section 56F of this Act, and

(b) every variation or release under that section.

(2) Where the Secretary of State accepts undertakings pursuant to a proposal under section 56A of this Act, he shall arrange for the statements included in the proposal under subsection (2)(b) and (c) of that section to be published in such manner as he considers appropriate.

(3) If it appears to the Secretary of State that the publication of any matter contained in a statement which falls to be published under subsection (2) of this section would be against the public interest, he shall exclude that matter from the statement as published under that subsection.

(4) Without prejudice to subsection (3) of this section, if the Secretary of State considers that it would not be in the public interest to disclose—

(a) any matter contained in a statement which falls to be published under subsection (2) of this section relating to the private affairs of an individual whose interests would, in the opinion of the Secretary of State, be seriously and prejudicially affected by the publication of that matter, or

(b) any matter contained in such a statement relating specifically to the affairs of a particular person whose interests would, in the opinion of the Secretary of State, be seriously and prejudicially affected by the publication of that matter,

the Secretary of State shall exclude that matter from the statement as published under subsection (2) of this section.]

Part V Mergers

Newspaper merger references

57 Meaning of “newspaper”, “transfer of newspaper or of newspaper assets” and related expressions

(1) In this Part of this Act—

(a) “newspaper” means a daily, Sunday or local (other than daily or Sunday) newspaper circulating wholly or mainly in the United Kingdom or in a part of the United Kingdom;

[F1(b) “newspaper proprietor” includes (in addition to an actual proprietor of a newspaper) any member of a group of persons of which another member is an actual proprietor of a newspaper.

(1A) In this Part of this Act, any reference to the newspapers of a newspaper proprietor (“NP”) is to—

(a) all newspapers of which NP is an actual proprietor, and

(b) all newspapers of which a member of a group of persons of which NP is a member is an actual proprietor.]

and any reference to the newspapers of a newspaper proprietor includes all newspapers in relation to which he is a newspaper proprietor and, in the case of a body corporate, all newspapers in relation to which a person having a controlling interest in that body corporate is a newspaper proprietor.

(2) In this Part of this Act “transfer of a newspaper or of newspaper assets” means any of the following transactions, that is to say—

(a) any transaction (whether involving a transfer or not) by virtue of which a person would become, or would acquire the right to become [F2—

(i) an actual proprietor of a newspaper, or

(ii) a person with a primary or secondary controlling interest in an actual proprietor of a newspaper;]

(b) any transfer of assets necessary to the continuation of a newspaper as a separate newspaper (including goodwill or the right to use the name of the newspaper);

(c) any transfer of plant or premises used in the publication of a newspaper, other than a transfer made without a view to a change in the ownership or control of the newspaper or to its ceasing publication;

and “the newspaper concerned in the transfer”, in relation to any transaction falling within paragraph (a), paragraph (b) or paragraph (c) of this subsection, means the newspaper in relation to which (as mentioned in that paragraph) the transaction is or is to be effected.

(3) In this Part of this Act “average circulation per day of publication”, in relation to a newspaper, means its average circulation for the appropriate period, ascertained by dividing the number of copies to which its circulation amounts for that period by the number of days on which the newspaper was published during that period (circulation being calculated on the basis of actual sales in the United Kingdom of the newspaper as published on those days); and for the purposes of this subsection “the appropriate period”—

(a) in a case in which an application is made for consent under the next following section, means the period of six months ending six weeks before the date of the application, or

(b) in a case in which a transfer or purported transfer is made without any such application for consent, means the period of six months ending six weeks before the date of the transfer or purported transfer.

(4) For the purposes of this section a person has a [F3primary]controlling interest in a body corporate if (but only if) he can, directly or indirectly, determine the manner in which one-quarter of the votes which could be cast at a general meeting of the body corporate are to be cast on matters, and in circumstances, not of such a description as to bring into play any special voting rights or restrictions on voting rights.

[F4(5) For the purposes of this section a person (“A”) has a secondary controlling interest in a body corporate (“B”) if, without having a primary controlling interest in B—

(a) A has a primary controlling interest in a body corporate which has a primary controlling interest in B, or

(b) A is connected to B by a chain of any number of other bodies corporate, in the first of which A has a primary controlling interest, in the second of which the first has a primary controlling interest, and so on, the last such body corporate having a primary controlling interest in B.

(6) For the purposes of this section a group of persons consists of any number of persons of whom the first is—

(a) a person other than a body corporate, or

(b) a body corporate in which no other person has a primary controlling interest,

and the others are the bodies corporate in which the first has a primary or secondary controlling interest.

(7) In determining for the purposes of subsection (6)(b) of this section whether a body corporate (“X”) is one in which another person has a primary controlling interest, there shall be disregarded any body corporate in which X has a primary or secondary controlling interest.]

58 Prohibition of certain newspaper mergers

(1) Subject to the following provisions of this section, a transfer of a newspaper or of newspaper assets to a newspaper proprietor whose newspapers have an average circulation per day of publication amounting, together with that of the newspaper concerned in the transfer, to 500,000 or more copies shall be unlawful and void, unless the transfer is made with written consent given (conditionally or unconditionally) by the Secretary of State.

(2) Except as provided by subsections (3) and (4) of this section and by section 60(3) of this Act, the consent of the Secretary of State under the preceding subsection shall not be given in respect of a transfer until after the Secretary of State has received a report on the matter from the Commission.

(3) Where the Secretary of State is satisfied that the newspaper concerned in the transfer is not economic as a going concern and as a separate newspaper, then—

(a) if he is also satisfied that, if the newspaper is to continue as a separate newspaper, the case is one of urgency, he may give his consent to the transfer without requiring a report from the Commission under this section;

(b) if he is satisfied that the newspaper is not intended to continue as a separate newspaper, he shall give his consent to the transfer, and shall give it unconditionally, without requiring such a report.

(4) If the Secretary of State is satisfied that the newspaper concerned in the transfer has an average circulation per day of publication of not more than [F150,000]copies, he may give his consent to the transfer without requiring a report from the Commission under this section.

(5) The Secretary of State may by order made by statutory instrument provide, subject to any transitional provisions contained in the order, that for any number specified in subsection (1) or subsection (4) of this section (whether as originally enacted or as previously varied by an order under this subsection) there shall be substituted such other number as is specified in the order.

(6) In this section “satisfied” means satisfied by such evidence as the Secretary of State may require.

59 Newspaper merger reference

(1) Where an application is made to the Secretary of State for his consent to a transfer of a newspaper or of newspaper assets, the Secretary of State, subject to the next following subsection, shall, within one month after receiving the application, refer the matter to the Commission for investigation and report.

(2) The Secretary of State shall not make a reference to the Commission under the preceding subsection in a case where—

(a) by virtue of subsection (3) of section 58 of this Act he is required to give his consent unconditionally without requiring a report from the Commission under this section, or

(b) by virtue of subsection (3) or subsection (4) of that section he has power to give his consent without requiring such a report from the Commission, and determines to exercise that power,

or where the application is expressed to depend on the operation of subsection (3) or subsection (4) of that section.

(3) On a reference made to them under this section (in this Act referred to as a “newspaper merger reference”) the Commission shall report to the Secretary of State whether the transfer in question may be expected to operate against the public interest, taking into account all matters which appear in the circumstances to be relevant and, in particular, the need for accurate presentation of news and free expresseion of opinion.

60 Time-limit for report on newspaper merger reference

(1) A report of the Commission on a newspaper merger reference shall be made before the end of [F1such period (not being longer than three months beginning with the date of the reference) as may be specified in the] reference or of such further period (if any) as the Secretary of State may allow for the purpose in accordance with the next following subsection.

(2) The Secretary of State shall not allow any further period for a report on such a reference except on representations made by the Commission and on being satisfied that there are special reasons why the report cannot be made within the [F2period specified in the newspaper merger reference]; and the Secretary of State shall allow only one such further period on any one reference, and no such further period shall be longer than three months.

(3) If on such a reference the Commission have not made their report before the end of the period specified in [F3the newspaper merger reference] or of any further period allowed under subsection (2) of this section, the Secretary of State may, without waiting for the report, give his consent to the transfer to which the reference relates.

61 Report on newspaper merger reference

(1) In making their report on a newspaper merger reference, the Commission shall include in it definite conclusions on the questions comprised in the reference, together with—

(a) such an account of their reasons for those conclusions, and

(b) such a survey of the general position with respect to the transfer of a newspaper or of newspaper assets to which the reference relates, and of the developments which have led to that position,

as in their opinion are expedient for facilitating a proper understanding of those questions and of their conclusions.

(2) Where on such a reference the Commission find that the transfer of a newspaper or of newspaper assets in question might operate against the public interest, the Commission shall consider whether any (and, if so, what) conditions might be attached to any consent to the transfer in order to prevent the transfer from so operating, and may, if they think fit, include in their report recommendations as to such conditions.

62 Enforcement provisions relating to newspaper mergers

(1) Any person who is knowingly concerned in, or privy to, a purported transfer of a newspaper or of newspaper assets which is unlawful by virtue of section 58 of this Act shall be guilty of an offence.

(2) Where under that section the consent of the Secretary of State is given to a transfer of a newspaper or of newspaper assets, but is given subject to one or more conditions, any person who is knowingly concerned in, or privy to, a breach of that condition, or of any of those conditions, as the case may be, shall be guilty of an offence.

(3) A person guilty of an offence under this section shall be liable, on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or to both.

(4) No proceedings for an offence under this section shall be instituted—

(a) in England or Wales, except by, or with the consent of, the Director of Public Prosecutions, or

(b) in Northern Ireland, except by, or with the consent of, the Director of Public Prosecutions for Northern Ireland.

Other merger references

63 Mergers references to which ss. 64 to 75 apply

(1) Sections 64 [F1to 75K of this Act shall not have effect in relation to]newspaper merger references; and accordingly in those sections “merger reference” shall be construed—

(a) as not including a reference made under section 59 of this Act, but

(b) as including any merger reference relating to a transfer of a newspaper or of newspaper assets, if the reference is made under section 64 or section 75 of this Act in a case falling within section 59(2) of this Act.

(2) In the following provisions of this Part of this Act “enterprise” means the activities, or part of the activities, of a business.

64 Merger situation qualifying for investigation

(1) A merger reference may be made to the Commission by the Secretary of State where it appears to him that it is or may be the fact that two or more enterprises (in this section referred to as “the relevant enterprises”), of which one at least was carried on in the United Kingdom or by or under the control of a body corporate incorporated in the United Kingdom, have, at a time or in circumstances falling within subsection (4) of this section, ceased to be distinct enterprises, and that either—

(a) as a result, the condition specified in subsection (2) or in subsection (3) of this section prevails, or does so to a greater extent, with respect to the supply of goods or services of any description, or

(b) the value of the assets taken over exceeds [F170 million].

(2) The condition referred to in subsection (1)(a) of this section, in relation to the supply of goods of any description, is that at least one-quarter of all the goods of that description which are supplied in the United Kingdom, or in a substantial part of the United Kingdom, either—

(a) are supplied by one and the same person or are supplied to one and the same person, or

(b) are supplied by the persons by whom the relevant enterprises (so far as they continue to be carried on) are carried on, or are supplied to those persons.

(3) The condition referred to in subsection (1)(a) of this section, in relation to the supply of services of any description, is that the supply of services of that description in the United Kingdom, or in a substantial part of the United Kingdom, is, to the extent of at least one-quarter, either—

(a) supply by one and the same person, or supply for one and the same person, or

(b) supply by the persons by whom the relevant enterprises (so far as they continue to be carried on) are carried on, or supply for those persons.

(4) For the purposes of subsection (1) of this section enterprises shall be taken to have ceased to be distinct enterprises at a time or in circumstances falling within this subsection if either—

(a) they did so not earlier than [F2four months]before the date on which the merger reference relating to them is to be made, or

(b) they did so under or in consequence of arrangements or transactions which were entered into without prior notice being given to the Secretary of State or to the Director of material facts about the proposed arrangements or transactions and in circumstances in which those facts had not been made public, and notice of those facts was not given to the Secretary of State or to the Director or made public more than [F2four months] before the date mentioned in the preceding paragraph.

(5) In determining whether to make a merger reference to the Commission the Secretary of State shall have regard, with a view to the prevention or removal of uncertainty, to the need for making a determination as soon as is reasonably practicable.

(6) On making a merger reference, the Secretary of State shall arrange for it to be published in such manner as he thinks most suitable for bringing it to the attention of persons who in his opinion would be affected by it.

(7) The Secretary of State may by order made by statatutory instrument provide, subject to any transitional provisions contained in the order, that for the sum specified in subsection (1)(b) of this section (whether as originally enacted or as previously varied by an order under this subsection) there shall be substituted such other sum (not being less than £5 million) as is specified in the order.

(8) The fact that two or more enterprises have ceased to be distinct enterprises in the circumstances described in subsection (1) of this section (including in those circumstances the result specified in paragraph (a), or fulfilment of the condition specified in paragraph (b), of that subsection) shall, for the purposes of this Act, be regarded as creating a merger situation qualifying for investigation; and in this Act “merger situation qualifying for investigation” and any reference to the creation of such a situation shall be construed accordingly.

(9) In this section “made public” means so publicised as to be generally known or readily ascertainable.

65 Enterprises ceasing to be distinct enterprises

(1) For the purposes of this Part of this Act any two enterprises shall be regarded as ceasing to be distinct enterprises if either—

(a) they are brought under common ownership or common control (whether or not the business to which either of them formerly belonged continues to be carried on under the same or different ownership or control), or

(b) either of the enterprises ceases to be carried on at all and does so in consequence of any arrangements or transaction entered into to prevent competition between the enterprises.

(2) For the purposes of the preceding subsection enterprises shall (without prejudice to the generality of the words “common control” in that subsection) be regarded as being under common control if they are—

(a) enterprises of interconnected bodies corporate, or

(b) enterprises carried on by two or more bodies corporate of which one and the same person or group of persons has control, or

(c) an enterprise carried on by a body corporate and an enterprise carried on by a person or group of persons having control of that body corporate.

(3) A person or group of persons able, directly or indirectly, to control or materially to influence the policy of a body corporate, or the policy of any person in carrying on an enterprise, but without having a controlling interest in that body corporate or in that enterprise, may for the purposes of subsections (1) and (2) of this section be treated as having control of it.

(4) For the purposes of subsection (1)(a) of this section, in so far as it relates to bringing two or more enterprises under common control, a person or group of persons may be treated as bringing an enterprise under his or their control if—

(a) being already able to control or materially to influence the policy of the person carrying on the enterprise, that person or group of persons acquires a controlling interest in the enterprise or, in the case of an enterprise carried on by a body corporate, acquires a controlling interest in that body corporate, or

(b) being already able materially to influence the policy of the person carrying on the enterprise, that person or group of persons becomes able to control that policy.

66 Time when enterprises cease to be distinct

(1) Where under or in consequence of the same arrangements or transaction, or under or in consequence of successive arrangements or transactions between the same parties or interests, successive events to which this subsection applies occur within a period of two years, then for the purposes of a merger reference those events may, if the Secretary of State [F1or the Commission]thinks fit, be treated as having occurred simultaneously on the date on which the latest of them occurred.

(2) The preceding subsection applies to any event whereby, under or in consequence of the arrangements or the transaction or transactions in question, any enterprises cease as between themselves to be distinct enterprises.

(3) For the purposes of subsection (1) of this section any arrangements or transactions may be treated by the Secretary of State [F1or the Commission] as arrangements or transactions between the same interests if it appears to him to be appropriate that they should be so treated, having regard to the persons who are substantially concerned in them.

(4) Subject to the preceding provisions of this section [F2and to section 66A of this Act], the time at which any two enterprises cease to be distinct enterprises, where they do so under or in consequence of any arrangements or transaction not having immediate effect, or having immediate effect in part only, shall be taken to be the time when the parties to the arrangements or transaction become bound to such extent as will result, on effect being given to their obligations, in the enterprises ceasing to be distinct enterprises.

(5) In accordance with subsection (4) of this section (but without prejudice to the generality of that subsection) for the purpose of determining the time at which any two enterprises cease to be distinct enterprises no account shall be taken of any option or other conditional right until the option is exercised or the condition is satisfied.

[F166A Obtaining control by stages

(1) Where an enterprise is brought under the control of a person or group of persons in the course of two or more transactions (referred to in this section as a “series of transactions”) falling within subsection (2) of this section, those transactions may, if the Secretary of State or, as the case may be, the Commission thinks fit, be treated for the purposes of a merger reference as having occurred simultaneously on the date on which the latest of them occurred.

(2) The transactions falling within this subsection are—

(a) any transaction which—

(i) enables that person or group of persons directly or indirectly to control or materially to influence the policy of any person carrying on the enterprise,

(ii) enables that person or group of persons to do so to a greater degree, or

(iii) is a step (whether direct or indirect) towards enabling that person or group of persons to do so, and

(b) any transaction whereby that person or group of persons acquires a controlling interest in the enterprise or, where the enterprise is carried on by a body corporate, in that body corporate.

(3) Where a series of transactions includes a transaction falling within subsection (2)(b) of this section, any transaction occurring after the occurrence of that transaction is to be disregarded for the purposes of subsection (1) of this section.

(4) Where the period within which a series of transactions occurs exceeds two years, the transactions that may be treated as mentioned in subsection (1) of this section are any of those transactions that occur within a period of two years.

(5) Sections 65(2) to (4) and 77(1) and (4) to (6) of this Act apply for the purposes of this section to determine whether an enterprise is brought under the control of a person or group of persons and whether a transaction falls within subsection (2) of this section as they apply for the purposes of section 65 of this Act to determine whether enterprises are brought under common control.

(6) In determining for the purposes of this section the time at which any transaction occurs, no account shall be taken of any option or other conditional right until the option is exercised or the condition is satisfied.]

67 Valuation of assets taken over

(1) The provisions of this section shall have effect for the purposes of section 64(1)(b) of this Act.

(2) Subject to subsection (4) of this section, the value of the assets taken over—

(a) shall be determined by taking the total value of the assets employed in, or appropriated to, the enterprises which cease to be distinct enterprises, except

[F1(i) any enterprise which remains under the same ownership and control, or

(ii) if none of the enterprises remains under the same ownership and control, the enterprise having the assets with the highest value, and]

(b) shall be so determined by reference to the values at which, on the enterprises ceasing to be distinct enterprises or (if they have not then done so) on the making of the merger reference to the Commission, the assets stand in the books of the relevant business, less any relevant provisions for depreciation, renewals or diminution in value.

(3) For the purposes of subsection (2) of this section any assets of a body corporate which, on a change in the control of the body corporate or of any enterprise of it, are dealt with in the same way as assets appropriated to any such enterprise shall be treated as appropriated to that enterprise.

(4) Where in accordance with subsection (1) of section 66 [F2or subsection (1) of section 66A] of this Act events to which [F3either of those subsections] applies are treated as having occurred simultaneously, subsection (2) of this section shall apply with such adjustments as appear to the Secretary of State or to the Commission to be appropriate.

68 Supplementary provisions as to merger situations qualifying for investigation

(1) In relation to goods or services of any description which are the subject of different forms of supply—

(a) references in subsection (2) of section 64 of this Act to the supply of goods, or

(b) references in subsection (3) of that section to the supply of services,

shall be construed in whichever of the following ways appears to the Secretary of State or the Commission, as the case may be, to be appropriate in all the circumstances, that is to say, as references to any of those forms of supply taken separately, to all those forms of supply taken together, or to any of those forms of supply taken in groups.

(2) For the purposes of the preceding subsection the Secretary of State or the Commission may treat goods or services as being the subject of different forms of supply whenever the transactions in question differ as to their nature, their parties, their terms or their surrounding circumstances, and the difference is one which, in the opinion of the Secretary of State or of the Commission, as the case may be, ought for the purposes of that subsection to be treated as a material difference.

(3) For the purpose of determining whether the proportion of one-quarter mentioned in subsection (2) or subsection (3) of section 64 of this Act is fulfilled with respect to goods or services of any description, the Secretary of State or the Commission, as the case may be, shall apply such criterion (whether it be value or cost or price or quantity or capacity or number of workers employed or some other criterion, of whatever nature) or such combination of criteria as may appear to the Secretary of State or the Commission to be most suitable in all the circumstances.

(4) The criteria for determining when goods or services can be treated, for the purposes of section 64 of this Act, as goods or services of a separate description shall be such as in any particular case the Secretary of State [F1or, as the case may be, the Commission] thinks most suitable in the circumstances of that case.

69 Different kinds of merger references

(1) Subject to the following provisions of this Part of this Act, on a merger reference the Commission shall investigate and report on the questions—

(a) whether a merger situation qualifying for investigation has been created, and

(b) if so, whether the creation of that situation operates, or may be expected to operate, against the public interest.

(2) A merger reference may be so framed as to require the Commission, in relation to the question whether a merger situation qualifying for investigation has been created, to exclude from consideration paragraph (a) of subsection (1) of section 64 of this Act, or to exclude from consideration paragraph (b) of that subsection, or to exclude one of those paragraphs if the Commission find the other satisfied.

(3) In relation to the question whether any such result as is mentioned in section 64(1)(a) of this Act has arisen, a merger reference may be so framed as to require the Commission to confine their investigation to the supply of goods or services in a specified part of the United Kingdom.

(4) A merger reference may require the Commission, if they find that a merger situation qualifying for investigation has been created, to limit their consideration thereafter to such elements in, or possible consequences of, the creation of that situation as may be specified in the reference, and to consider whether, in respect only of those elements or possible consequences, the situation operates, or may be expected to operate, against the public interest.

70 Time-limit for report on merger reference

(1) Every merger reference shall specify a period (not being longer than six months beginning with the date of the reference) within which a report on the reference is to be made; and a report of the Commission on a merger reference shall not have effect, and no action shall be taken in relation to it under this Act, unless the report is made before the end of that period or of such further period (if any) as may be allowed by the Secretary of State in accordance with the next following subsection.

(2) The Secretary of State shall not allow any further period for a report on a merger reference except on representations made by the Commission and on being satisfied that there are special reasons why the report cannot be made within the period specified in the reference; and the Secretary of State shall allow only one such further period on any one reference, and no such further period shall be longer than three months.

71 Variation of certain merger references

(1) Subject to the following provisions of this section, the Secretary of State may at any time vary a merger reference . . . F1

(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F2

(3) Without prejudice to the powers of the Secretary of State under section 70 of this Act, a merger reference shall not be varied so as to specify a period within which a report on the reference is to be made which is different from the period specified in the reference in accordance with that section.

72 Report of Commission on merger reference

(1) In making their report on a merger reference, the Commission shall include in it definite conclusions on the questions comprised in the reference, together with—

(a) such an account of their reasons for those conclusions, and

(b) such a survey of the general position with respect to the subject-matter of the reference, and of the developments which have led to that position,

as in their opinion are expedient for facilitating a proper understanding of those questions and of their conclusions.

(2) Where on a merger reference the Commission find that a merger situation qualifying for investigation has been created and that the creation of that situation operates or may be expected to operate against the public interest (or, in a case falling within subsection (4) of section 69 of this Act, find that one or more elements in or consequences of that situation which were specified in the reference in accordance with that subsection so operate or may be expected so to operate) the Commission shall specify in their report the particular effects, adverse to the public interest, which in their opinion the creation of that situation (or, as the case may be, those elements in or consequences of it) have or may be expected to have; and the Commission—

(a) shall, as part of their investigations, consider what action (if any) should be taken for the purpose of remedying or preventing those adverse effects, and

(b) may, if they think fit, include in their report recommendations as to such action.

(3) In paragraph (a) of subsection (2) of this section the reference to action to be taken for the purpose mentioned in that paragraph is a reference to action to be taken for that purpose either—

(a) by one or more Ministers (including [F1Northern Ireland departments]) or other public authorities, or

(b) by one or more persons specified in the report as being persons carrying on, owning or controlling any of the enterprises which, in accordance with the conclusions of the Commission, have ceased to be distinct enterprises.

73 Order of Secretary of State on report on merger reference

(1) The provisions of this section shall have effect where a report of the Commission on a merger reference has been laid before Parliament in accordance with the provisions of Part VII of this Act, and the conclusions of the Commission set out in the report, as so laid,—

(a) include conclusions to the effect that a merger situation qualifying for investigation has been created and that its creation, or particular elements in or consequences of it specified in the report, operate or may be expected to operate against the public interest, and

(b) specify particular effects, adverse to the public interest, which in the opinion of the Commission the creation of that situation, or (as the case may be) those elements in or consequences of it, have or may be expected to have.

(2) In the circumstances mentioned in the preceding subsection the Secretary of State may by order made by statutory instrument exercise such one or more of the powers specified in Parts I and II of Schedule 8 to this Act as he may consider it requisite to exercise for the purpose of remedying or preventing the adverse effects specified in the report as mentioned in the preceding subsection; and those powers may be so exercised to such extent and in such manner as the Secretary of State considers requisite for that purpose.

(3) In determining whether, or to what extent or in what manner, to exercise any of those powers, the Secretary of State shall take into account any recommendations included in the report of the Commission in pursuance of section 72(2)(b) of this Act and any advice given by the Director under section 88 of this Act.

74 Interim order in respect of merger reference

(1) Where a merger reference has been made to the Commission, . . . F1, then, with a view to preventing action to which this subsection applies, the Secretary of State, subject to subsection (3) of this section, may by order made by statutory instrument—

(a) prohibit or restrict the doing of things which in his opinion would constitute action to which this subsection applies, or

(b) impose on any person concerned obligations as to the carrying on of any activities or the safeguarding of any assets, or

(c) provide for the carrying on of any activities or the safeguarding of any assets either by the appointment of a person to conduct or supervise the conduct of any activities (on such terms and with such powers as may be specified or described in the order) or in any other manner, or

(d) exercise any of the powers which, by virtue of [F2paragraph 12 and 12A] of Schedule 8 to this Act, are exercisable by an order under section 73 of this Act.

(2) In relation to a merger reference the preceding subsection applies to any action which might prejudice the reference or impede the taking of any action under this Act which may be warranted by the Commission’s report on the reference.

(3) No order shall be made under this section in respect of a merger reference after whichever of the following events first occurs, that is to say—

(a) the time (including any further period) allowed to the Commission for making a report on the reference expires without their having made such a report;

(b) the period of forty days beginning with the day on which a report of the Commission on the reference is laid before Parliament expires.

(4) An order under this section made in respect of a merger reference (if it has not previously ceased to have effect) shall cease to have effect on the occurrence of whichever of those events first occurs, but without prejudice to anything previously done under the order.

(5) Subsection (4) of this section shall have effect without prejudice—

(a) to the operation, in relation to any such order, of section 134(1) of this Act, or

(b) to the operation of any order made under section 73 of this Act which exercises the same or similar powers to those exercised by the order under this section.

75 Reference in anticipation of merger

(1) A merger reference may be made to the Commission by the Secretary of State where it appears to him that it is or may be the fact that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a merger situation qualifying for investigation.

(2) Subject to the following provisions of this section, on a merger reference under this section the Commission shall proceed in relation to the prospective and (if events so require) the actual results of the arrangements proposed or made as, in accordance with the preceding provisions of this Part of this Act, they could proceed if the arrangements in question had actually been made, and the results in question had followed immediately before the date of the reference under this section.

(3) A merger reference under this section may require the Commission, if they find that a merger situation qualifying for investigation has been created, or will be created if the arrangements in question are carried into effect, to limit their consideration thereafter to such elements in, or possible consequences of, the creation of that situation as may be specified in the reference, and to consider whether, in respect only of those elements or possible consequences, the situation might be expected to operate against the public interest.

(4) In relation to a merger reference under this section, sections 66, [F166A], 67, 69, 71, 72, 73 and 74 of this Act shall apply subject to the following modifications, that is to say—

[F2(a) section 66 shall apply, where an event by which any enterprises cease as between themselves to be distinct enterprises will occur if the arrangements are carried into effect, as if the event had occurred immediately before the date of the reference;

(aa) section 66A shall apply, where a transaction falling within subsection (2) of that section will occur if the arrangements are carried into effect, as if the transaction had occurred immediately before the date of the reference;

(b) in section 67(4) the references to subsection (1) of section 66 and subsection (1) of section 66A shall be construed as references to those subsections as modified in accordance with paragraph (a) or (aa) of this subsection;]

(c) in section 69, subsection (1) shall be construed as modified by subsection (2) of this section; in subsections (2) and (3) any reference to the question whether a merger situation qualifying for investigation has been created, or whether a result mentioned in section 64(1)(a) of this Act has arisen, shall be construed as including a reference to the question whether such a situation will be created or such a result will arise if the arrangements in question are carried into effect; and subsection (4) of that section shall not apply;

(d) in section 71, in section 72(2) and in section 74(1), the references to section 69(4) of this Act shall be construed as references to subsection (3) of this section; and

(e) in section 73(1), the reference to conclusions to the effect that a merger situation qualifying for investigation has been created shall be construed as including a reference to conclusions to the effect that such a situation will be created if the arrangements in question are carried into effect.

[F3(4A) Where a merger reference is made under this section, it shall be unlawful, except with the consent of the Secretary of State under subsection (4C) of this section—

(a) for any person carrying on any enterprise to which the reference relates or having control of any such enterprise or for any subsidiary of his, or

(b) for any person associated with him or for any subsidiary of such a person,

directly or indirectly to acquire, at any time during the period mentioned in subsection (4B) of this section, an interest in shares in a company if any enterprise to which the reference relates is carried on by or under the control of that company.

(4B) The period referred to in subsection (4A) of this section is the period beginning with the announcement by the Secretary of State of the making of the merger reference concerned and ending—

(a) where the reference is laid aside at any time, at that time,

(b) where the time (including any further period) allowed to the Commission for making a report on the reference expires without their having made such a report, on the expiration of that time,

(c) where a report of the Commission on the reference not including such conclusions as are referred to in section 73(1)(b) of this Act is laid before Parliament, at the end of the day on which the report is so laid,

(d) where a report of the Commission on the reference including such conclusions is laid before Parliament, at the end of the period of forty days beginning with the day on which the report is so laid,

and where such a report is laid before each House on different days, it is to be treated for the purposes of this subsection as laid on the earlier day.

(4C) The consent of the Secretary of State—

(a) may be either general or special,

(b) may be revoked by the Secretary of State, and

(c) shall be published in such way as, in the opinion of the Secretary of State, to give any person entitled to the benefit of it an adequate opportunity of getting to know of it, unless in the Secretary of State’s opinion publication is not necessary for that purpose.

(4D) Section 93 of this Act applies to any contravention or apprehended contravention of subsection (4A) of this section as it applies to a contravention or apprehended contravention of an order to which section 90 of this Act applies.

(4E) Subsections (4F) to (4K) of this section apply for the interpretation of subsection (4A).

(4F) The circumstances in which a person acquires an interest in shares include those where—

(a) he enters into a contract to acquire the shares (whether or not for cash),

(b) not being the registered holder, he acquires a right to exercise, or to control the exercise of, any right conferred by the holding of the shares, or

(c) he acquires a right to call for delivery of the shares to himself or to his order or to acquire an interest in the shares or assumes an obligation to acquire such an interest,

but does not include those where he acquires an interest in pursuance of an obligation assumed before the announcement by the Secretary of State of the making of the merger reference concerned.

(4G) The circumstances in which a person acquires a right mentioned in subsection (4F) of this section—

(a) include those where he acquires a right or assumes an obligation the exercise or fulfilment of which would give him that right, but

(b) does not include those where he is appointed as proxy to vote at a specified meeting of a company or of any class of its members or at any adjournment of the meeting or he is appointed by a corporation to act as its representative at any meeting of the company or of any class of its members,

and references to rights and obligations in this subsection and subsection (4F) of this section include conditional rights and conditional obligations.

(4H) Any reference to a person carrying on or having control of any enterprise includes a group of persons carrying on or having control of an enterprise and any member of such a group.

(4J) Sections 65(2) to (4) and 77(1) and (4) to (6) of this Act apply to determine whether any person or group of persons has control of any enterprise and whether persons are associated as they apply for the purposes of section 65 of this Act to determine whether enterprises are brought under common control.

(4K) “Subsidiary” has the meaning given by section 736 of the Companies Act 1985, but that section and section 736A of that Act also apply to determine whether a company is a subsidiary of an individual or of a group of persons as they apply to determine whether it is a subsidiary of a company and references to a subsidiary in subsections (8) and (9) of section 736A as so applied are to be read accordingly.

(4L) In this section—

• “company”includes any body corporate, and

• “share”means share in the capital of a company, and includes stock.

(4M) Nothing in subsection (4A) of this section makes anything done by a person outside the United Kingdom unlawful unless he is—

(a) a British citizen, a British Dependent Territories citizen, a British Overseas citizen or a British National (Overseas),

(b) a body corporate incorporated under the law of the United Kingdom or of a part of the United Kingdom, or

(c) a person carrying on business in the United Kingdom, either alone or in partnership with one or more other persons.]

(5) If, in the course of their investigations on a merger reference under this section, it appears to the Commission that the proposal to make arrangements such as are mentioned in the reference has been abandoned, the Commission—

(a) shall, if the Secretary of State consents, lay the reference aside, but

(b) shall in that case furnish to the Secretary of State such information as he may require as to the results until then of the investigations.

[F1 Restriction on power to make merger reference where prior notice has been given

75A General rule where notice given by acquirer and no reference made within period for considering notice

(1) Notice may be given to the Director by a person authorised by regulations to do so of proposed arrangements which might result in the creation of a merger situation qualifying for investigation.

(2) The notice must be in the prescribed form and state that the existence of the proposal has been made public.

(3) If the period for considering the notice expires without any reference being made to the Commission with respect to the notified arrangements, no reference may be made under this Part of this Act to the Commission with respect to those arrangements or to the creation or possible creation of any merger situation qualifying for investigation which is created in consequence of carrying those arrangements into effect.

(4) Subsection (3) of this section is subject to sections 75B(5) and 75C of this Act.

(5) A notice under subsection (1) of this section is referred to in sections 75B to 75F of this Act as a “merger notice”.

75B The role of the Director

(1) The Director shall, when the period for considering any merger notice begins, take such action as he considers appropriate to bring the existence of the proposal, the fact that the merger notice has been given and the date on which the period for considering the notice may expire to the attention of those who in his opinion would be affected if the arrangements were carried into effect.

(2) The period for considering a merger notice is the period of twenty days, determined in accordance with subsection (9) of this section, beginning with the first day after—

(a) the notice has been received by the Director, and

(b) any fee payable to the Director in respect of the notice has been paid.

(3) The Director may, and shall if required to do so by the Secretary of State, by notice to the person who gave the merger notice [F1extend the period mentioned in subsection (2) of this section by a further fifteen days].

(4) The Director may by notice to the person who gave the merger notice request him to provide the Director within such period as may be specified in the notice with such information as may be so specified.

(5) If the Director gives to the person who gave the merger notice (in this subsection referred to as “the relevant person”) a notice stating that the Secretary of State is seeking undertakings under section 75G of this Act, section 75A(3) of this Act does not prevent a reference being made to the Commission unless—

(a) after the Director has given that notice, the relevant person has given a notice to the Director stating that he does not intend to give such undertakings, and

(b) the period of ten days beginning with the first day after the notice under paragraph (a) of this subsection was received by the Director has expired.

(6) A notice by the Director under subsection (3), (4) or (5) of this section must either be given to the person who gave the merger notice before the period for considering the merger notice expires or be sent in a properly addressed and pre-paid letter posted to him at such time that, in the ordinary course of post, it would be delivered to him before that period expires.

(7) The Director may, at any time before the period for considering any merger notice expires, reject the notice if—

(a) he suspects that any information given in respect of the notified arrangements, whether in the merger notice or otherwise, by the person who gave the notice or any connected person is in any material respect false or misleading,

(b) he suspects that it is not proposed to carry the notified arrangements into effect, [F2or]

(c) any prescribed information is not given in the merger notice or any information requested by notice under subsection (4) of this section is not provided within the period specified in the notice.

[F2or,

(d) it appears to him that the notified arrangements are, or if carried into effect would result in, a concentration with a Community dimension within the meaning of Council Regulation (EEC) No. 4064/89 of 21st December 1989 on the control of concentrations between undertakings.]

(8) If—

(a) under subsection [F1(3)]of this section the period for considering a merger notice has been extended by a further fifteen days, but

(b) the Director has not made any recommendation to the Secretary of State under section 76(b) of this Act as to whether or not it would in the Director’s opinion be expedient for the Secretary of State to make a reference to the Commission with respect to the notified arrangements,

then, during the last five of those fifteen days, the power of the Secretary of State to make a reference to the Commission with respect to the notified arrangements is not affected by the absence of any such recommendation.

(9) In determining any period for the purposes of subsections (2), (3) and (5) of this section no account shall be taken of—

(a) Saturday, Sunday, Good Friday and Christmas Day, and

(b) any day which is a bank holiday in England and Wales.

75C Cases where power to refer unaffected

(1) Section 75A(3) of this Act does not prevent any reference being made to the Commission if—

(a) before the end of the period for considering the merger notice, it is rejected by the Director under section 75B(7) of this Act,

(b) before the end of that period, any of the enterprises to which the notified arrangements relate cease to be distinct from each other,

(c) any information (whether prescribed information or not) that—

(i) is, or ought to be, known to the person who gave the merger notice or any connected person, and

(ii) is material to the notified arrangements;

is not disclosed to the Secretary of State or the Director by such time before the end of that period as may be specified in regulations,

(d) at any time after the merger notice is given but before the enterprises to which the notified arrangements relate cease to be distinct from each other, any of those enterprises ceases to be distinct from any enterprise other than an enterprise to which those arrangements relate,

(e) the six months beginning with the end of the period for considering the merger notice expires without the enterprises to which the notified arrangements relate ceasing to be distinct from each other,

(f) the merger notice is withdrawn, or

(g) any information given in respect of the notified arrangements, whether in the merger notice or otherwise, by the person who gave the notice or any connected person is in any material respect false or misleading.

(2) Where—

(a) two or more transactions which have occurred or, if any arrangements are carried into effect, will occur may be treated for the purposes of a merger reference as having occurred simultaneously on a particular date, and

(b) subsection (3) of section 75A of this Act does not prevent such a reference with respect to the last of those transactions,

that subsection does not prevent such a reference with respect to any of those transactions which actually occurred less than six months before—

(i) that date, or

(ii) the actual occurrence of another of those transactions with respect to which such a reference may be made (whether or not by virtue of this subsection).

(3) In determining for the purposes of subsection (2) of this section the time at which any transaction actually occurred, no account shall be taken of any option or other conditional right until the option is exercised or the condition is satisfied.

75D Regulations

(1) The Secretary of State may make regulations for the purposes of sections 75A to 75C of this Act.

(2) The regulations may, in particular—

(a) provide for section 75B(2) or (3) or section 75C(1)(e) of this Act to apply as if any reference to a period of days or months were a reference to a period specified in the regulations for the purposes of the provision in question,

(b) provide for the manner in which any merger notice is authorised or required to be given, rejected or withdrawn, and the time at which any merger notice is to be treated as received or rejected,

(c) provide for the manner in which any information requested by the Director or any other material information is authorised or required to be provided or disclosed, and the time at which such information is to be treated as provided or disclosed,

(d) provide for the manner in which any notice under section 75B of this Act is authorised or required to be given,

(e) provide for the time at which any notice under section 75B(5)(a) of this Act is to be treated as received,

(f) provide for the address which is to be treated for the purposes of section 75B(6) of this Act and of the regulations as a person’s proper address,

(g) provide for the time at which any fee is to be treated as paid, and

(h) provide that a person is, or is not, to be treated, in such circumstances as may be specified in the regulations, as acting on behalf of a person authorised by regulations to give a merger notice or a person who has given such a notice.

(3) The regulations may make different provision for different cases.

(4) Regulations under this section shall be made by statutory instrument.

75E Interpretation of sections 75A to 75D

In this section and sections 75A to 75D of this Act—

• “connected person”, in relation to the person who gave a merger notice, means—

  (a)

  any person who, for the purposes of section 77 of this Act, is associated with him, or

  (b)

  any subsidiary of the person who gave the merger notice or of any person so associated with him,

• “merger notice”is to be interpreted in accordance with section 75A(5) of this Act,

• “notified arrangements”means the arrangements mentioned in the merger notice or arrangements not differing from them in any material respect,

• “prescribed”means prescribed by the Director by notice having effect for the time being and published in the London, Edinburgh and Belfast Gazettes,

• “regulations”means regulations under section 75D of this Act, andregulations” means regulations under section 75D of this Act, and

• “subsidiary”has the meaning given by section 75(4K) of this Act,

and references to the enterprises to which the notified arrangements relate are references to those enterprises that would have ceased to be distinct from one another if the arrangements mentioned in the merger notice in question had been carried into effect at the time when the notice was given.

75F Power to amend sections 75B to 75D

(1) The Secretary of State may, for the purpose of determining the effect of giving a merger notice and the steps which may be or are to be taken by any person in connection with such a notice, by regulations made by statutory instrument amend sections 75B to 75D of this Act.

(2) The regulations may make different provision for different cases and may contain such incidental and supplementary provisions as the Secretary of State thinks fit.

(3) No regulations shall be made under this section unless a draft of the regulations has been laid before and approved by resolution of each House of Parliament.]

[F1 Undertakings as alternative to merger reference

75G Acceptance of undertakings

(1)