Part IIE+W APPOINTMENTMENT AND REGULATION OF UNDERTAKERS

CHAPTER IIIE+W PROTECTION OF CUSTOMERS ETC..

Provisions with respect to competitionE+W

31 Functions of Director with respect to competition.E+W

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

[F2(2)The functions to which subsection (2A) below applies shall be concurrent functions of the Director and the OFT.

(2A)This subsection applies to the functions of the OFT under Part 4 of the 2002 Act (other than sections 166 and 171) so far as relating to commercial activities connected with the supply of water or the provision of sewerage services.]

[F3(3)The Director shall be entitled to exercise, concurrently with the OFT, the functions of the OFT under the provisions of Part 1 of the Competition Act 1998 (other than sections 31D(1) to (6), 38(1) to (6) and 51), so far as relating to —

(a)agreements, decisions or concerted practices of the kind mentioned in section 2(1) of that Act,

(b)conduct of the kind mentioned in section 18(1) of that Act,

(c)agreements, decisions or concerted practices of the kind mentioned in Article 81(1) of the treaty establishing the European Community, or

(d)conduct which amounts to abuse of the kind mentioned in Article 82 of the treaty establishing the European Community,

which relate to commercial activities connected with the supply of water or securing a supply of water or with the provision or securing of sewerage services.]

[F4(4)So far as necessary for the purposes of, or in connection with, subsections (2) and (2A) above, references in Part 4 of the 2002 Act to the OFT (including references in provisions of that Act applied by that Part) shall be construed as including references to the Director (except in sections 166 and 171 of that Act and in any other provision of that Act where the context otherwise requires).]

[F5(4A)So far as necessary for the purposes of, or in connection with, the provisions of subsection (3) above, references in Part I of the Competition Act 1998 to [F6the OFT] are to be read as including a reference to the Director ([F7except in sections 31D(1) to (6), 38(1) to (6)] , 51, 52(6) and (8) and 54 of that Act and in any other provision of that Act where the context otherwise requires).]

[F8(5)Before the OFT or the Director first exercises in relation to any matter functions which are exercisable concurrently by virtue of subsection (2) above, that person shall consult the other.

(6)Neither the OFT nor the Director shall exercise in relation to any matter functions which are exercisable concurrently by virtue of subsection (2) above if functions which are so exercisable have been exercised in relation to that matter by the other.]

(7)It shall be the duty of the Director, for the purpose of assisting the [F9Competition Commission] in carrying out an investigation on a reference made to them by the Director by virtue of subsection (2) F10. . . above, 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 shall, for the purposes of carrying out any such investigation, take into account any information given to them for that purpose under this subsection.

(8)If any question arises as to whether subsection (2) or (3) above F11. . . applies to any particular case, that question shall be referred to and determined by the Secretary of State; and no objection shall be taken to anything done under—

(a)[F12Part 4 of the 2002 Act]; or

[F13(b)Part I of the Competition Act 1998 ([F14other than sections 31D(1) to (6), 38(1) to (6)] and 51),]

by or in relation to the Director on the ground that it should have been done by or in relation to [F15the OFT] .

[F16(8A)Section 117 of the 2002 Act (offences of supplying false or misleading information) as applied by section 180 of that Act shall have effect so far as relating to functions exercisable by the Director by virtue of subsection (2) above as if the references in section 117(1)(a) and (2) to the OFT included references to the Director.]

(9)F17. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1S. 31(1) ceases to have effect (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278, 279, Sch. 25 para. (8)(a), Sch. 26; S.I. 2003/766, art. 2, Sch. (with transitional and transitory provisions in art. 3)

F2S. 31(2)(2A) substituted (20.6.2003) for s. 31(2) by Enterprise Act 2002 (c. 40), ss. 168(9), 279, Sch. 9 para. 19(2); S.I. 2003/ 1397, {art. 2(1)}, Sch.

F4S. 31(4) substituted (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 168(9), 279, Sch. 9 para. 19(3); S.I. 2003/ 1397, {art. 2(1)}, Sch.

F5S. 31(4A) inserted (26.11.1998 for specified purposes and otherwise 1.3.2000) by 1998 c. 41, s. 54(3), Sch. 10 Pt. II para. 5(5)(8) (with s. 73); S.I. 1997/2750, art. 2(1); S.I. 2000/344, art. 2 Sch.

F6Words in s. 31(4A) substituted (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278, 279, Sch. 25 para. 25(8)(c); S.I. 2003/766, art. 2, Sch. (with transitional and transitory provisions in art. 3)

F7Words in s. 31(4A) substituted (1.5.2004) by The Competition Act 1998 and Other Enactments (Amendment) Regulations 2004 (S.I. 2004/1261), reg. 5, Sch. 2 para. 4(2)(b)

F8S. 31(5)(6) substituted (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 168(9), 279, Sch. 9 para. 19(4); S.I. 2003/1397, art. 2(1), Sch.

F9Words in s. 31(7) substituted (1.4.1999) by S.I. 1999/506, art. 30(b)

F10Words in s. 31(7) repealed (26.11.1998 for specified purposes and otherwise 1.3.2000) by 1998 c. 41, ss. 54(3), 74(3), Sch. 10 Pt. II para. 5(5)(11), Sch. 14 Pt. I (with s. 73); S.I. 1998/2750, art. 2(1); S.I. 2000/344, art. 2 Sch.

F11Words in s. 31(8) repealed (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 168(1), 178, 179, Sch. 9 para. 19(5)(a), Sch. 26; S.I. 2003/1397, art. 2(1), Sch. (with savings in art. 10)

F12Words in s. 31(8) substituted (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 168(9), 279, Sch. 9 para. 19(5)(b); S.I. 2003/1397, art. 2(1), Sch.

F13S. 31(8)(b) substituted (26.11.1998 for specified purposes and otherwise 1.3.2000) by 1998 c. 41, s. 54(3), Sch. 10 Pt. II para. 5(5)(12) (with s. 73); S.I. 1998/2750, art. 2(1); S.I. 2000/344, art. 2 Sch.

F15Words in s. 31(8) substituted (1.4.2003) by Enterprise Act 2002 (c. 40), ss. 278, 279, Sch. 25 para. 25(8)(d); S.I. 2003/766, art. 2, Sch. (with transitional and transitory provisions in art. 3)

F16S. 31(8A) substituted (20.6.2003) by Enterprise Act 2002 (c. 40), ss. 168(9), 279, Sch. 9 para. 19(6); S.I. 2003/1397, art. 2(1), Sch.

Modifications etc. (not altering text)

C1S. 31(3) restricted (26.11.1998 for specified purposes and otherwise 1.3.2000) by 1998 c. 41, s. 54(3), Sch. 10 para. 5(1) (with s. 73); S.I. 1998/2750, art. 2(1); S.I. 2000/344, art. 2 Sch.

S. 31(3) amended (1.3.2000) by 1998 c. 41, ss. 54, 66(5), Sch. 10 Pt. I para. 5(1) (with s. 73); S.I. 2000/344, art. 2 Sch.

32 Duty to refer merger of water or sewerage undertakings.E+W

(1)Subject to the following provisions of this section and to section 33 below, it shall be the duty of the Secretary of State to make a merger reference to the [F18Competition Commission] if it appears to him that it is or may be the fact—

(a)that arrangements are in progress which, if carried into effect, will result in a merger of any two or more water enterprises; or

(b)that such a merger has taken place otherwise than as a result of the carrying into effect of arrangements that have been the subject of a reference by virtue of paragraph (a) above.

(2)The Secretary of State shall not make a merger reference under this section in respect of any actual or prospective merger of two or more water enterprises if it appears to him that the take over from which the merger has resulted or, as the case may be, would result was initiated before 9 a.m. on 11th January 1989.

(3)For the purposes of subsection (2) above a merger of two or more enterprises results from a take over initiated before 9 a.m. on 11th January 1989 if—

(a)the Secretary of State or the Director General of Fair Trading was given notice before that time on that date of the material facts about the proposed arrangements or transactions resulting in the merger; or

(b)the merger results exclusively from the acceptance of offers to acquire shares in a body corporate and those offers—

(i)were all made before that time on that date; or

(ii)in so far as they were not so made, consist in offers made, by the same person and in respect of the same shares, in substitution for offers made before that time on that date.

Textual Amendments

F18Words in s. 32(1) substituted (1.4.1999) by S.I. 1999/506, art. 30(b)

33 Exclusion of small mergers from duty to make merger reference.E+W

(1)The Secretary of State shall not make a merger reference under section 32 above in respect of any actual or prospective merger of two or more water enterprises if it appears to him—

(a)that the value of the assets taken over does not exceed or, as the case may be, would not exceed the amount for the time being specified in section 64(1)(b) of the 1973 Act (condition of merger reference relating to amount of assets taken over); or

(b)that the only water enterprises already belonging to the person making the take over are enterprises each of which has assets the value of which does not exceed or, as the case may be, would not exceed that amount.

(2)In relation to a merger of two or more water enterprises—

(a)the value of the assets taken over shall, for the purposes of subsection (1) above, be determined in accordance with section 67 of the 1973 Act by reference only to assets employed in or appropriated to a water enterprise; and

(b)the value of the assets of a water enterprise belonging to the person making the take over shall be taken for those purposes to be the value of such assets employed in or appropriated to that enterprise as by virtue of the exceptions in paragraph (a) of subsection (2) of that section are disregarded in determining the value of the assets taken over;

and paragraph (b) of that subsection shall apply for determining the value of the assets referred to in paragraph (b) above as it applies in relation to the assets taken over.

(3)For the purposes of this section and of any determination in accordance with this section—

(a)the assets treated as employed in or appropriated to a water enterprise carried on by a company holding an appointment under Chapter I of this Part shall include all the assets for the time being of that company;

(b)every water enterprise any of whose assets fall to be disregarded as mentioned in subsection (2)(b) above shall be treated as belonging to the person making the take over;

(c)the enterprises mentioned in paragraph (b) above shall be treated as separate enterprises in so far as they are carried on by different companies holding appointments under Chapter I of this Part; and

(d)subsections (3) and (4) of section 67 of the 1973 Act (assets treated as appropriated to an enterprise and mergers over a period) shall apply as they apply for the purposes of, and of any determination in accordance with, subsection (2) of that section.

(4)If the Secretary of State considers that it is appropriate—

(a)for subsection (1) above to have effect with a reference in paragraph (a) to a different amount; or

(b)for the condition set out in that paragraph to be modified in any other respect,

he may, in relation to mergers after the coming into force of the regulations, by regulations make such modifications of that paragraph and, for that purpose, of the other provisions of this section as may be prescribed.

Modifications etc. (not altering text)

C2S. 33(1)(a) amended (9.2.1994) by S.I. 1994/73, reg. 2

34 References with respect to water enterprise mergers.E+W

(1)Subject to subsections (2) to (4) below, the 1973 Act shall have effect in relation to any reference under section 32 above as if—

(a)any such merger of two or more water enterprises as is required to be the subject of such a reference were a merger situation qualifying for investigation; and

(b)a reference under that section were made under section 64 of that Act or, as the case may be, under section 75 of that Act (references in anticipation of a merger).

(2)Nothing in subsection (1) above shall have the effect in relation to any reference under section 32 above of applying—

(a)so much of Part V of the 1973 Act as requires the [F19Competition Commission]to consider any of the matters set out in subsection (1) of section 64 of that Act; or

(b)the provisions of sections 69(2) to (4) and 75(3) of that Act (power to restrict matters referred).

(3)In determining on a reference under section 32 above whether any matter operates, or may be expected to operate, against the public interest the [F19 Competition Commission]—

[F20(a) shall have regard to the desirability of giving effect to the principle that the Director’s ability, in carrying out his functions by virtue of this Act, to make comparisons between different water enterprises should not be prejudiced; and]

(b)shall have regard to the desirability of achieving any other purpose so far only as they are satisfied—

(i)that that other purpose can be achieved in a manner that does not conflict with that principle; or

(ii)that the achievement of that other purpose is of substantially greater significance in relation to the public interest than that principle and cannot be brought about except in a manner that conflicts with that principle.

(4)No order shall be made under Part V of the 1973 Act in consequence of any merger reference made under section 32 above in respect of an actual merger unless the reference was made within the period of six months beginning with whichever is the later of—

(a)the day on which the merger took place; and

(b)the day on which the material facts about the transactions which resulted in the merger first came to the notice of the Secretary of State or the Director General of Fair Trading or were made public within the meaning of section 64 of the 1973 Act;

and if on such a reference the [F19Competition Commission]are satisfied that the reference was not made within that period their report on the reference shall state that fact and nothing else.

Textual Amendments

F19Words in s. 34(2)(a)(3)(4) substituted (1.4.1999) by S.I. 1999/506, art. 30(b)

F20S. 34(3)(a) substituted (1.7.1992) by Competition and Service (Utilities) Act 1992 (c. 43), s. 39(1)(3); Competition and Service (Utilities) Act 1992 (Commencement No. 1) Order 1992, art. 3, Sch. Pt. I

35 Construction of merger provisions.E+W

(1)In this Chapter-

(2)References in this Chapter, in relation to any two or more enterprises, to the merger of those enterprises are references to those enterprises ceasing, within the meaning of Part V of the 1973 Act, to be distinct enterprises; and sections 66 and 66A of that Act (time at which enterprises cease to be distinct) shall have effect for the purposes of this Chapter as they have effect for the purposes of that Part.

F21(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)Nothing in sections 32 to 34 above shall prejudice any power of the Secretary of State, in a case in which he is not required to make a reference under section 32 above, to make a merger reference under Part V of the 1973 Act in respect of any actual or prospective merger of two or more water enterprises.

Textual Amendments

F21S. 35(3) repealed (1.7.1992) by Competition and Service (Utilities) Act 1992 (c. 43), ss. 39(2)(3), 56(7), Sch.2; Competition and Service (Utilities) Act 1992 (Commencement No. 1) Order 1992, art. 3, Sch. Pt. I

Modifications etc. (not altering text)