Part II APPOINTMENTMENT AND REGULATION OF UNDERTAKERS
CHAPTER III PROTECTION OF CUSTOMERS ETC..
Provisions with respect to competition
31 Functions of F49Authority with respect to competition.
1
F4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F52
2A
This subsection applies to the functions of the F47CMA under Part 4 of the 2002 Act (other than sections 166 F41171 and 174E) so far as F35those functions—
a
are exercisable by the CMA Board (within the meaning of Schedule 4 to the Enterprise and Regulatory Reform Act 2013), and
b
relate to commercial activities connected with the supply of water or the provision of sewerage services.
C1F163
F49The Authority shall be entitled to exercise, concurrently with the F39CMA, the functions of the F39CMA under the provisions of Part 1 of the Competition Act 1998 (other than sections 31D(1) to (6), 38(1) to (6) F27, 40B(1) to (4) 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 F32Article 101(1) of the Treaty on the Functioning of the European Union, or
d
conduct which amounts to abuse of the kind mentioned in F30Article 102 of the Treaty on the Functioning of the European Union,
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.
F64
So far as necessary for the purposes of, or in connection with, subsections (2) and (2A) F26above—
a
references in Part 4 of the 2002 Act to the F33CMA (including references in provisions of that Act applied by that Part) shall be construed as including references to F49the Authority (except in sections 166 F24, 171 and 174E of that Act and in any other provision of that Act where the context otherwise F42requires);
b
references in that Part to section 5 of the 2002 Act are to be construed as including references to section 27(1) and (2) of this Act.
F284ZA
Section 130A of the 2002 Act is to have effect in its application in relation to the Authority by virtue of subsections (2) and (2A)—
a
as if for subsection (1) of that section there were substituted—
1
Where the Water Services Regulation Authority—
a
is proposing to carry out its functions under section 27(1) and (2) of the Water Industry Act 1991 in relation to a matter for the purposes mentioned in subsection (2), and
b
considers that the matter is one in respect of which it would be appropriate for the Authority to exercise its powers under section 174 (investigation) in connection with deciding whether to make a reference under section 131,
the Authority must publish a notice under this section (referred to in this Part as a “market study notice”).
b
as if in subsection (2)(a) of that section, for “the acquisition or supply of goods or services of one or more than one description in the United Kingdom” there were substituted “commercial activities connected with the supply of water or the provision of sewerage services (within the meaning given by section 219(1) of the Water Industry Act 1991)”.
F14A
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 F23the CMA are to be read as including a reference to F49the Authority (F17except in sections 31D(1) to (6), 38(1) to (6)F27, 40B(1) to (4), 51, 52(6) and (8) and 54 of that Act and in any other provision of that Act where the context otherwise requires).
F75
6
7
It shall be the duty of F49the Authority, for the purpose of assisting F34a CMA group in carrying out an investigation on a F31market investigation reference made by the Authority (under section 131 of the 2002 Act) by virtue of subsection (2) F2. . . above, to give to the F37group —
a
any information which is in F49its possession and which relates to matters falling within the scope of the investigation, and which is either requested by the F37group for that purpose or is information which in F49its opinion it would be appropriate for that purpose to give to the F37group without any such request; and
b
and the F37group shall, for the purposes of carrying out any such investigation, take into account any information given to them for that purpose under this subsection.
F297A
In subsection (7) “CMA group” has the same meaning as in Schedule 4 to the Enterprise and Regulatory Reform Act 2013.
8
If any question arises as to whether subsection (2) or (3) above F10. . . 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
F8Part 4 of the 2002 Act; or
F3b
F98A
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 F49the Authority by virtue of subsection (2) above as if the references in section 117(1)(a) and (2) to the F44CMA included references to F49the Authority.
9
F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1232 Duty to refer merger of water or sewerage undertakings.
Subject to section 33 below, it shall be the duty of the F40CMA to make a reference to its chair for the constitution of a group under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 if the CMA believes that it is or may be the case—
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.
F1333 Exclusion of small mergers from duty to make reference.
1
The F38CMA 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 the F38CMA —
a
that the value of the turnover of the water enterprise being taken over does not exceed or, as the case may be, would not exceed £10 million; or
b
that the only water enterprises already belonging to the person making the take over are enterprises each of which has a turnover the value of which does not exceed or, as the case may be, would not exceed £10 million.
2
For the purposes of subsection (1)(a) above, the value of the turnover of the water enterprise being taken over shall be determined by taking the total value of the turnover of the water enterprises ceasing to be distinct enterprises and deducting—
a
the turnover of any water enterprise continuing to be carried on under the same ownership and control; or
b
if there is no water enterprise continuing to be carried on under the same ownership and control, the turnover which, of all the turnovers concerned, is the turnover of the highest value.
3
For the purposes of subsection (1)(b) above—
a
every water enterprise ceasing to be a distinct enterprise and whose turnover is to be deducted by virtue of subsection (2)(a) or (b) above shall be treated as a water enterprise belonging to the person making the take over; and
b
water enterprises shall be treated as separate enterprises so far as they are carried on by different companies holding appointments under Chapter 1 of this Part.
4
For the purposes of this section the turnover of a water enterprise shall be determined in accordance with such provisions as may be specified in regulations made by the Secretary of State.
5
Regulations under subsection (4) above may, in particular, make provision as to—
a
the amounts which are, or which are not, to be treated as comprising an enterprise’s turnover; and
b
the date or dates by reference to which an enterprise’s turnover is to be determined.
6
Regulations under subsection (4) above may, in particular, make provision enabling the Secretary of State or the F21CMA to determine matters of a description specified in the regulations (including any of the matters mentioned in paragraphs (a) and (b) of subsection (5) above).
F486A
The CMA must—
a
keep under review the conditions set out in subsection (1)(a) and (b), and
b
from time to time advise the Secretary of State as to whether the conditions in subsection (1)(a) and (b), and the sums mentioned in those paragraphs, are still appropriate.
7
The Secretary of State may by regulations amend subsection (1) above so as—
a
to alter the sum for the time being mentioned in paragraph (a) of that subsection or otherwise to modify the condition set out in that paragraph; or
b
to alter the sum for the time being mentioned in paragraph (b) of that subsection or otherwise to modify the condition set out in that paragraph.
8
Regulations under subsection (7) above—
a
shall not make any modifications in relation to mergers on or before the coming into force of the regulations; and
b
may, in particular, include supplemental, consequential or transitional provision amending or repealing any provision of this section.
9
References in this section to enterprises being carried on under the same ownership and control shall be construed in accordance with Part 3 of the 2002 Act.
33AF22Exceptions to duty to make reference
1
The CMA may decide not to make a merger reference under section 32 as regards a case falling within section 32(a) if it believes that—
a
the arrangements concerned are not sufficiently far advanced, or are not sufficiently likely to proceed, to justify the making of a merger reference;
b
the prospective merger is not likely to prejudice the ability of the Authority, in carrying out its functions by virtue of this Act, to make comparisons between water enterprises; or
c
the prospective merger is likely to prejudice that ability, but the prejudice in question is outweighed by relevant customer benefits relating to the merger.
2
The CMA may decide not to make a merger reference under section 32 as regards a case falling within section 32(b) if it believes that—
a
the merger has not prejudiced and is not likely to prejudice the ability of the Authority, in carrying out its functions by virtue of this Act, to make comparisons between water enterprises; or
b
the merger has prejudiced or is likely to prejudice that ability, but the prejudice in question is outweighed by relevant customer benefits relating to the merger.
3
Before forming a view as to the matters in subsection (1)(b) or (c) or (2)(a) or (b), the CMA must—
a
request the Authority to give an opinion under section 33B, and
b
consider that opinion.
4
The CMA may not make a merger reference under section 32 if—
a
it is considering whether to accept an undertaking under section 33D instead of making such a reference; or
b
it is prevented by section 74 of the Enterprise Act 2002 (effect of accepting an undertaking in lieu), in a case where that section as applied by paragraph 1 of Schedule 4ZA may have effect to prevent such a merger reference.
5
In this section “relevant customer benefit” has the meaning given by paragraph 7 of Schedule 4ZA.
33BOpinion of the Authority
1
Where the CMA makes a request under section 33A(3), the Authority must give its opinion on—
a
whether and to what extent the actual or prospective merger has prejudiced or is likely to prejudice the Authority's ability, in carrying out its functions by virtue of this Act, to make comparisons between water enterprises, and
b
where it forms the view that the actual or prospective merger has prejudiced or is likely to prejudice that ability, whether the prejudice in question is outweighed by any relevant customer benefits relating to the merger.
2
In forming an opinion on the matters in subsection (1), the Authority must apply the methods set out in the statement under section 33C that has effect when the request under section 33A(3) is made.
3
In this section “relevant customer benefit” has the meaning given by paragraph 7 of Schedule 4ZA, except that references in paragraph 7 to what the CMA believes are to be read for the purposes of this section as references to what the Authority believes.
33CStatement of methods
1
The Authority must prepare and keep under review a statement of the methods to be applied in forming an opinion on the matters in section 33B(1).
2
The statement must in particular set out—
a
the criteria to be used for assessing the effect of any particular water enterprise ceasing to be a distinct enterprise on the Authority's ability, in carrying out its functions by virtue of this Act, to make comparisons between water enterprises;
b
the relative weight to be given to the criteria.
3
Before preparing or altering the statement, the Authority must consult—
a
the Secretary of State,
b
the Welsh Ministers,
c
the CMA, and
d
relevant undertakers.
4
The Authority must from time to time publish the statement as it has effect for the time being.
F1434 Application of provisions of Enterprise Act 2002
The provisions of Schedule 4ZA to this Act shall have effect with respect to mergers of water enterprises.
F1535 Construction of merger provisions.
1
In this Chapter (including Schedule 4ZA)—
“enterprise” has the same meaning as in Part 3 of the 2002 Act; and
“water enterprise” means an enterprise carried on by a F19relevant undertaker.
2
References in this Chapter (including Schedule 4ZA), 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 3 of the 2002 Act, to be distinct enterprises; and sections 27 and 29 of that Act and any provision made under section 34 of that Act (time at which enterprises cease to be distinct) shall have effect for the purposes of this Chapter (including Schedule 4ZA) as they have effect for the purposes of that Part.
3
Nothing in sections 32 to 34 above (including Schedule 4ZA) shall prejudice any power of the F20CMA or the Secretary of State, in a case in which, or to any extent to which, the F20CMA is not required to make a reference under section 32 above, to make a reference under Part 3 of the 2002 Act in respect of any actual or prospective merger of two or more water enterprises.
4
Where two or more enterprises have merged or will merge as part of transactions or arrangements which also involve an actual or prospective merger of two or more water enterprises, Part 3 of the 2002 Act shall apply in relation to the actual or prospective merger of the enterprises concerned excluding the water enterprises; and references in that Part to the creation of a relevant merger situation shall be construed accordingly.
5
Subject to subsections (3) and (4), Part 3 of the 2002 Act shall not apply in a case in which the F43CMA is required to make a reference under section 32 above except as applied by virtue of Schedule 4ZA.