Part 4Market Studies and Market Investigations
Chapter 3Enforcement
F1Undertakings in lieu
154AUndertakings fully or partially in lieu of references or reports
(1)
This section applies where—
(a)
no market study notice has been published under section 130A but the CMA considers that it has the power to make a market investigation reference under section 131 and (subject to taking action under this section) intends to make such a reference,
(b)
a market study notice has been published under section 130A but no market investigation reference has been made under section 131, or
(c)
a market investigation reference has been made under section 131 or 132 but no report under section 136 has been published.
(2)
The CMA may accept, from such persons as it considers appropriate, undertakings to take such action as it considers appropriate for the purposes of remedying, mitigating or preventing (to any extent)—
(a)
any adverse effect on competition concerned, or
(b)
any detrimental effect on customers so far as—
(i)
it has resulted from the adverse effect on competition, or
(ii)
it may be expected to result from the adverse effect on competition.
(3)
An undertaking under this section is known as—
(a)
an “undertaking in lieu of a reference” where it is accepted in circumstances where this section applies by virtue of subsection (1)(a) or (b);
(b)
an “undertaking in lieu of a report” where it is accepted in circumstances where this section applies by virtue of subsection (1)(c).
(4)
The CMA may accept—
(a)
undertakings in lieu of a reference either—
(i)
instead of making a reference under section 131 (in which case the undertakings are known as “undertakings fully in lieu of a reference”), or
(ii)
in addition to making a reference under that section (in which case the undertakings are known as “undertakings partially in lieu of a reference”);
(b)
undertakings in lieu of a report either—
(i)
instead of publishing a report under section 136 (in which case the undertakings are known as “undertakings fully in lieu of a report”), or
(ii)
in addition to publishing a report under that section (in which case the undertakings are known as “undertakings partially in lieu of a report”).
(5)
In accepting undertakings fully in lieu of a reference or undertakings fully in lieu of a report, the CMA must, in particular, have regard to the need to achieve as comprehensive a solution as is reasonable and practicable to—
(a)
the adverse effect on competition concerned, and
(b)
any detrimental effects on customers so far as resulting from the adverse effect on competition.
(6)
In accepting an undertaking under this section, the CMA may, in particular, have regard to the effect of any action on any relevant customer benefits of the feature or features of the market or markets concerned.
(7)
Where no detrimental effect on customers has yet resulted from an adverse effect on competition, the CMA may not accept an undertaking under this section to remedy, mitigate or prevent a detrimental effect on customers so far as it may be expected to result from that adverse effect on competition unless the adverse effect on competition is also being remedied, mitigated or prevented (whether or not by the same undertaking).
(8)
An undertaking under this section—
(a)
comes into force when accepted;
(b)
may be varied or superseded by another undertaking;
(c)
may be released by the CMA.
(9)
The CMA must, as soon as reasonably practicable, consider any representations received by it in relation to varying or releasing an undertaking under this section.
(10)
This section is subject to sections 150 and 155.
155 Undertakings in lieu: procedural requirements
(1)
Before accepting an undertaking under section F2154A (other than an undertaking under that section which varies an undertaking under that section but not in any material respect), the F3CMA shall—
(a)
publish notice of the proposed undertaking; and
(b)
consider any representations made in accordance with the notice and not withdrawn.
(2)
A notice under subsection (1) shall state—
(a)
that the F3CMA proposes to accept the undertaking;
(b)
the purpose and effect of the undertaking;
(c)
the situation that the undertaking is seeking to deal with;
(d)
any other facts which the F3CMA considers justify the acceptance of the undertaking;
(e)
a means of gaining access to an accurate version of the proposed undertaking at all reasonable times; and
(f)
the period (not less than 15 days starting with the date of publication of the notice) within which representations may be made in relation to the proposed undertaking.
F4(3A)
The matters to be included in a notice under subsection (1) by virtue of subsection (2) include, in particular, the adverse effect on competition, and any detrimental effect on customers so far as resulting from the adverse effect on competition, which the CMA has identified.
(4)
The F3CMA shall not accept the undertaking with modifications unless it—
(a)
publishes notice of the proposed modifications; and
(b)
considers any representations made in accordance with the notice and not withdrawn.
(5)
A notice under subsection (4) shall state—
(a)
the proposed modifications;
(b)
the reasons for them; and
(c)
the period (not less than 7 days starting with the date of the publication of the notice under subsection (4)) within which representations may be made in relation to the proposed modifications.
(6)
If, after publishing notice under subsection (1) or (4), the F5CMA decides—
(a)
not to accept the undertaking concerned; and
(b)
not to proceed by virtue of subsection (8) or (9);
it shall publish notice of that decision.
(7)
As soon as practicable after accepting an undertaking to which this section applies, the F5CMA shall—
(a)
serve a copy of the undertaking on any person by whom it is given; and
(b)
publish the undertaking.
(8)
The requirements of subsection (4) (and those of subsection (1)) shall not apply if the F5CMA—
(a)
has already published notice under subsection (1) but not subsection (4) in relation to the proposed undertaking; and
(b)
considers that the modifications which are now being proposed are not material in any respect.
(9)
The requirements of subsection (4) (and those of subsection (1)) shall not apply if the F5CMA—
(a)
has already published notice under subsections (1) and (4) in relation to the matter concerned; and
(b)
considers that the further modifications which are now being proposed do not differ in any material respect from the modifications in relation to which notice was last given under subsection (4).
(10)
Paragraphs 6 to 8 (but not paragraph 9) of Schedule 10 (procedural requirements before terminating undertakings) shall apply in relation to the proposed release of undertakings under section F6154A (other than in connection with accepting an undertaking under that section which varies or supersedes an undertaking under that section) as they apply in relation to the proposed release of undertakings under section 73.
156 Effect of undertakings F7in lieu
F8A1
No market investigation reference shall be made by the CMA or the appropriate Minister in relation to any feature, or combination of features, of a market in the United Kingdom for goods or services if—
(a)
the CMA has accepted an undertaking or group of undertakings under section F9154A within the previous 12 months;
(b)
(c)
the goods or services to which the undertaking or group of undertakings relates are of the same description as the goods or services to which the reference would relate.
(1)
No F12ordinary reference shall be made by the F13CMA or the appropriate Minister in relation to any feature, or combination of features, of a market in the United Kingdom for goods or services if—
(a)
the F13CMA has F14, instead of making an ordinary reference, accepted an undertaking or group of undertakings F15in lieu of a reference under section 154A within the previous 12 months; F16...
F17(ab)
any feature or combination of features to which the undertaking or group of undertakings relates is a feature or combination of features to which the reference would relate; and
(b)
the goods or services to which the undertaking or group of undertakings relates are of the same description as the goods or services to which F18the reference would relate.
(2)
F19Subsections (A1) and (1) do not prevent the making of a market investigation reference if—
(a)
the F13CMA considers that any undertaking concerned has been breached and has given notice of that fact to the person responsible for giving the undertaking; or
(b)
the person responsible for giving any undertaking concerned supplied, in connection with the matter, information to the F13CMA which was false or misleading in a material respect.
F20(3)
The expiry of the period mentioned in section 131B(4) does not prevent the making of a market investigation reference if the CMA has accepted an undertaking or group of undertakings under section F21154A and—
(a)
the CMA considers that any undertaking concerned has been breached and has given notice of that fact to the person responsible for giving the undertaking; or
(b)
the person responsible for giving any undertaking concerned supplied, in connection with the matter, information to the OFT which was false or misleading in a material respect.
F22(4)
Where the CMA has, under section 154A, accepted an undertaking, or group of undertakings, in lieu of a report the CMA is not required by virtue of section 134 to make the decisions referred to in subsections (1) and (1A) of that section in relation to a feature, or features, to which the undertaking, or group of undertakings, relate.
(5)
Accordingly, a report under section 136 is not required, and the duty under section 138 does not arise, if the CMA accepts an undertaking fully in lieu of a report.
(6)
Instead, where the CMA accepts an undertaking fully in lieu of a report the CMA must prepare and publish a report containing—
(a)
the CMA’s decision to accept the undertaking,
(b)
the reasons for the decision, and
(c)
such information as the CMA considers appropriate for facilitating a proper understanding of the decision and its reasons for the decision.
(7)
For provision equivalent to subsection (6) in the case where the CMA accepts an undertaking partially in lieu of a report, see section 136(2)(aa).