After section 14 of the 1989 Act (modification following report) there is inserted—

“14A Competition Commission’s power to veto modifications following report.

(1)

The Competition Commission (in this section referred to as “the Commission”) may, within the period of four weeks after the date on which it is given a notice under section 14(5), direct the Authority—

(a)

not to make the modifications set out in that notice; or

(b)

not to make such of the modifications as may be specified in the direction;

and the Authority shall comply with any such direction.

(2)

The Secretary of State may, within the period of four weeks after the date on which the Commission is given a notice under section 14(5) and on the application of the Commission, direct that the period for giving a direction under subsection (1) (and, accordingly, the period mentioned in section 14(7)) shall be extended by 14 days.

(3)

The power to give a direction under subsection (1) may only be exercised in respect of such of the modifications set out in the notice under section 14(5)(a) as appear to the Commission not to be the modifications which are requisite for the purpose of remedying or preventing all or any of the adverse effects specified in the report as effects which could be remedied or prevented by modifications.

(4)

If the Commission gives a direction under subsection (1), the Commission—

(a)

shall give notice setting out the modifications proposed by the Authority, the terms of the direction and the reasons for giving it; and

(b)

shall itself make such modifications of the relevant conditions as appear to it to be requisite for the purpose of remedying or preventing—

(i)

if the direction was given under subsection (1)(a), the adverse effects specified in the report as effects which could be remedied or prevented by modifications;

(ii)

if the direction was given under subsection (1)(b), such of those adverse effects as are not remedied or prevented by the modifications made by the Authority under section 14(7)(b).

(5)

In exercising its function under subsection (4)(b) the Commission shall have regard to the matters to which the Authority is required to have regard when determining the conditions of a licence.

(6)

Before making modifications under subsection (4)(b) the Commission shall give notice—

(a)

stating that it proposes to make the modifications and setting them out;

(b)

stating the reason why it proposes to make them;

(c)

specifying the period (not being less than 28 days from the date of publication of the notice) within which representations or objections with respect to the proposed modifications may be made,

and shall consider any representations or objections which are duly made and not withdrawn.

(7)

A notice under subsection (4)(a) or (6) shall be given—

(a)

by publishing the notice in such manner as the Commission considers appropriate for the purpose of bringing it to the attention of persons likely to be affected by the making of the modifications; and

(b)

by serving a copy on the Authority and the holder of the licence in question or, as the case may be, the relevant licence holders.

(8)

After making modifications under this section the Commission shall publish a notice stating that the modifications have been made and setting them out, with the reasons for making them.

(9)

Where, in consequence of a reference under section 12(1A), the Commission modifies under subsection (4)(b) the standard conditions of licences of any type, the Authority may make such incidental and consequential modifications as it considers necessary or expedient of any conditions of licences of that type granted before that time.

(10)

Where the Commission modifies the standard conditions of licences of any type as mentioned in subsection (9), the Authority—

(a)

shall make (as nearly as may be) the same modifications of those conditions for the purposes of their incorporation in licences of that type granted after that time; and

(b)

shall publish the modifications made for those purposes in such manner as it considers appropriate.

(11)

The modification under this section of part of a standard condition of a particular licence in consequence of a reference under section 12(1) shall not prevent any other part of the condition from continuing to be regarded as a standard condition for the purposes of this Part.

(12)

The provisions mentioned in subsection (13) are to apply in relation to the exercise by the Commission of its functions under this section as if—

(a)

in section 82(1) and (2) of the M1Fair Trading Act 1973 references to a report of the Commission under that Act were references to a notice under subsection (4)(a), (6) or (8) of this section;

(b)

in section 85 of that Act references to an investigation on a reference made to the Commission were references to an investigation by the Commission for the purposes of the exercise of its functions under this section.

(13)

The provisions are—

(a)

section 82(1) and (2) of the M2Fair Trading Act 1973 (general provisions as to reports under that Act);

(b)

section 85 of that Act (attendance of witnesses and production of documents);

(c)

section 24 of the M3Competition Act 1980 (modification of provisions about the Competition Commission’s general functions); and

(d)

Part II of Schedule 7 to the M4Competition Act 1998 (the Competition Commission’s general functions).

(14)

This section does not apply to the modification of a licence following a report of the Commission made before the commencement of section 39 of the Utilities Act 2000.”