Clause 149 - Interim undertakings: part 4

Enterprise Bill – in a Public Bill Committee am 12:30 pm ar 7 Mai 2002.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Derek Conway Derek Conway Ceidwadwyr, Old Bexley and Sidcup 12:30, 7 Mai 2002

With this it will be convenient to discuss amendment No. 313, in page 108, line 34, after `reference', insert

`but not any such action which could be beneficial to competition or customers'.

Once the investigation is complete and the report has been published, most companies will not want to

stand back. They will either want to go to the Competition Appeal Tribunal or take on board the report's implications as far and as fast as they can, then move on. A company would rarely sit back and do nothing, and wait until the OFT loads it with orders. In almost any case, that would not be in the company's interests. The concern with the provision is that the wording could be used to prevent a company moving ahead in a way in which would not be anti-competitive, and which would, in any normal regard, be acceptable.

The amendments try to address that by stating that a company should be barred only from taking evasive action, rather than from taking any action at all. Amendment No. 313 goes wider: the question should be not only of the negative—that the company should not evade—but of the extent to which the action concerned would not affect competition, and of whether it were beneficial to customers. For those circumstances, a definition of pre-emptive action should be carved out. The amendments head in the same direction, but amendment No. 313 is slightly wider. I appreciate that they are not of the finest draftsmanship, but I hope that the Under-Secretary accepts my point.

Photo of Miss Melanie Johnson Miss Melanie Johnson Parliamentary Under-Secretary, Department of Trade and Industry

In a market investigation, interim undertakings and orders are available only following the publication of the Competition Commission's report. Their purpose is to prevent the parties from taking action that might prejudice the ability of the Competition Commission to introduce the final remedies identified in the report. The parties may in the interim period want to take steps on their own initiative and to address competition concerns that were identified in the reports. I reassure the hon. Gentleman that interim undertakings and orders would prevent such action only if it were deemed prejudicial. Perhaps such action, although taken in the interests of competition, would undermine the ability of the Competition Commission to implement a remedy that would have an even greater beneficial impact. In such cases, the Competition Commission should be able to introduce an interim order or secure interim undertakings.

The key point is that action should not be prejudicial to the eventual outcome of the market reference. That clearly covers action that is intended to evade or obstruct. It may also, in the circumstances that I have set out, cover pre-emptive action of a more positive nature, but which if unchecked may not result in the best outcome for competition and consumers. I appreciate the hon. Gentleman's remarks about the nature of his amendments. I hope that they are probing, and that I have reassured him that they are not necessary.

Photo of Jonathan Djanogly Jonathan Djanogly Ceidwadwyr, Huntingdon

Having heard what the Minister has had to say, I am more satisfied about how the wording will be interpreted. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 149 ordered to stand part of the Bill.

Clauses 150 and 151 ordered to stand part of the Bill.