Civil Aviation Act 2012

Civil Aviation Act 2012

2012 CHAPTER 19

Commentary

Part 1 – Airports

Chapter 2 – Competition

Section 60: Functions under Part 4 of Enterprise Act 2002 and Section 61: Enterprise Act 2002: supplementary

167. These sections provide for most of the functions of the Office of Fair Trading (OFT) under Part 4 of the Enterprise Act 2002 (market investigations) to be exercisable concurrently by the CAA, so far as those functions relate to the provision of airport operation services. “Airport operation services” is defined in section 68.

168. Part 4 of the Enterprise Act 2002 allows for the OFT to make a market investigation reference to the Competition Commission. These investigations are designed to complement the Competition Act 1998 by providing a means of addressing problems in markets where competition does not appear to be working well, but where there is no apparent breach of existing competition law. An example of the sort of circumstances in which a market investigation might take place would be a situation where a non-collusive, uncompetitive oligopoly existed. This would be characterised by a few large firms supplying almost the whole of the market (known as an oligopoly) and, without there being any agreement between them (collusion) or any concerted practice such as would infringe the Competition Act 1998, they all tended to follow parallel courses of conduct, while new competitors faced significant barriers to entry into the market, and there was little or no evidence of vigorous competition between the existing players.

169. The OFT is able to make a reference to the Competition Commission where it has reasonable grounds to suspect that any feature, or combination of features, of a market operating in whole or in part in the UK prevents, restricts or distorts competition in connection with the supply or acquisition of goods or services in the UK. Relevant market features are the structure of a market for goods or services, the conduct of persons supplying or acquiring goods or services in that market, and the conduct of their customers. Where the Competition Commission finds that such an adverse effect on competition exists, it is under a duty to take such remedial action within its powers as it considers reasonable and practicable.

170. Section 60 enables the CAA to exercise the OFT's functions under Part 4 of the Enterprise Act 2002 in relation to airport operation services, except that, unlike the OFT, the CAA is neither obliged to keep a register of undertakings accepted and orders made (since this is the OFT’s exclusive responsibility under section 166 of the Enterprise Act 2002) nor is it obliged to issue guidance on the making of market references (under section 171 of that Act).

171. Subsections (1) and (2) of section 61 are designed to prevent the exercise by both the CAA and the OFT of their concurrent powers under Part 4 of the Enterprise Act 2002 in relation to the same matter. These subsections place those bodies under a duty to consult each other before exercising any of their concurrent functions and prohibit them from exercising these functions in a case where the other has already done so.

172. Subsection (4) of section 61 places the CAA under a duty, where it has referred a matter to the Competition Commission under the provisions of Part 4 of the Enterprise Act 2002, to provide the Competition Commission with any information relevant to the investigation in the CAA’s possession or control which is requested by the Competition Commission or which the CAA considers appropriate. Subsection (6) places a duty on the Competition Commission to take this information into account.

173. Subsection (5) of section 61 places the CAA under a duty to provide any other assistance requested by the Competition Commission for the purpose of such a reference and which it is in the CAA’s power to give.

174. Subsection (7) of section 61 gives the Secretary of State the power to determine any question that arises as to whether the CAA must or may carry out any concurrent function under the Enterprise Act 2002. However, subsection (8) also makes clear that no action taken by the CAA under Part 4 of the Enterprise Act 2002 is open to challenge on the grounds that such action should have been taken by the OFT (other than in relation to sections 166 and 171 of that Act).

175. Subsection (9) of section 61 enables the CAA, when carrying out its concurrent functions under Part 4 of the Enterprise Act 2002, to have regard to matters mentioned in subsections (1) to (3) of section 1 (the CAA’s general duty when exercising functions under Chapter 1 of Part 1). Subsection (10) disapplies the CAA’s general objectives in section 4 of the CAA 1982 when carrying out concurrent functions under the Enterprise Act 2002.