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Baroness Nicol: My Lords, I am grateful for the careful answer that the Minister has just given. I am persuaded by the arguments to withdraw my amendment. It is comforting, too, that there is an opportunity in the formation of the rules to clarify even further some of the matters that he mentioned. I can quite see his point about not wanting the provision in primary legislation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 184A to 185 not moved.]

23 Feb 1998 : Column 510

Lord Kingsland moved Amendment No. 185A:

Page 27, line 21, leave out from ("also") to ("so") in line 22 and insert ("exclude,")

The noble Lord said: My Lords, I beg to move Amendment No. 185A. I have spoken to this amendment. I do not think the Minister responded to my point about the subjective judgment of the director. It related to the expression "in his opinion". However, I have no doubt that the noble Lord will reflect on that matter and, in that spirit, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 185B to 185D not moved.]

Clause 56 [Findings of fact by Director]:

[Amendment No. 186 not moved.]

Lord Haskel moved Amendment No. 186A:

Page 28, line 4, at end insert ("; or
(b) conducting an investigation under section 25.").

The noble Lord said: My Lords, as I explained on the third day of Committee, it is the Government's intention that Clause 56 should apply to findings of fact made by the director in all decisions. It should not be limited to decisions resulting from a notification for a decision. The amendment gives effect to that intention. I beg to move.

On Question, amendment agreed to.

Clause 57 [Interpretation]:

[Amendment No. 186B not moved.]

Lord Fraser of Carmyllie moved Amendment No. 186C:

Page 28, line 36, at end insert--
("" dominance" does not include any ability to act independently which might exist but for a legal requirement arising other than under this Act;").

The noble Lord said: My Lords, Clause 57 concerns interpretation of governing principles. It immediately precedes Clause 58, the Eldorado Clause in the Bill which will provide a goldmine for lawyers for at least the next decade.

We hope by Amendments Nos. 186B and 186C to reduce by a small margin the opportunities for digging away at that vein. Amendment No. 186C proposes that included within this interpretation clause "dominance" should be clearly defined. The definition we have offered is that "dominance" should have the same meaning as within the EC treaty.

It might shorten proceedings if I say that in relation to my next amendment, Amendment No. 187B, which relates to undertaking, we will be adopting the same position. I cannot believe that anyone would wish to see anything other than clarity being given to the interpretation of the Bill. I beg to move.

Lord Simon of Highbury: My Lords, I was not clear from the drafting of the amendment what its purpose was. I understand from the noble and learned Lord's explanation that it is partially to stop lawyers earning

23 Feb 1998 : Column 511

money and to disapply the Chapter II prohibition from an undertaking in so far as it occupies a dominant position because of a legal requirement.

We cannot accept this proposal. We intend that the fundamental question of dominance should be interpreted in accordance with Article 86 jurisprudence. The proposal would interfere with that interpretation to a degree. I remind the noble and learned Lord that the Chapter II prohibition will catch abuses, not dominance itself. Dominant companies have a responsibility not to abuse their market position, howsoever the dominance arises. If the concern is that the conduct may be caught as an abuse, even if that conduct is required under statute, the Bill ensures that that will not be the case.

Paragraph 3 of Schedule 3 provides that the Chapter II prohibition does not apply to conduct carried out in order to comply with the legal requirement. It would not, however, be right to disapply the prohibition from all conduct carried out by an undertaking which occupies a dominant position under a statutory regime.

In the light of that explanation, which I hope is a fair conclusion as to the answer that the noble and learned Lord required for clarification, but in no certainty that I have given it correctly, I invite him to withdraw his amendment.

Lord Fraser of Carmyllie: My Lords, that is not a wimpish answer by the Minister but I do think it is a slightly wimpish answer by the draftsman. I can see no reason why he should not have been prepared to see dominance. If I am wrong and it does not accurately reflect the terms of the EC treaty, I would retreat immediately. If, however, the definition I have attached to it is a correct one, I believe it would have been helpful to have that placed on the face of the Bill. As the noble Lord might expect, I am not concerned to press the amendment at this time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Haskel moved Amendment No. 187:

Page 28, line 43, at end insert--
(""information" includes estimates and forecasts;").

The noble Lord said: My Lords, this amendment was debated on day one. I beg to move.

On Question, amendment agreed to.

Lord Simon of Highbury moved Amendment No. 187A:

Page 29, line 6, at end insert--
(""person", in addition to the meaning given by the Interpretation Act 1978, includes any undertaking;").

The noble Lord said: My Lords, this is a technical amendment which provides that in the interpretation of Part I of the Bill "person" is to include any undertaking.

As your Lordships will be aware from our earlier discussions on this Bill, the prohibitions are modelled on Articles 85 and 86 which apply to undertakings and, as a result of Clause 58, words in the Bill such as "undertaking" are to be interpreted by reference to EC law. However, it is not appropriate for all of the provisions

23 Feb 1998 : Column 512

of the Bill to be drafted in terms of "undertakings". For example, Clause 20 provides that persons may apply to the DGFT for guidance or decision about the application of the Chapter II prohibition to their conduct. The applicant may seek to argue in that application that the Chapter II prohibition does not apply to it because it is not an undertaking. But there may be undertakings that are not regarded by our legal system as persons. We therefore felt that we should make clear through this amendment that a "person" is to include any undertaking. I beg to move.

On Question, amendment agreed to.

Lord Fraser of Carmyllie moved Amendment No. 187B

Page 29, line 17, at end insert--
(""undertaking" includes a person who, or body which, requires, causes or connives in an infringement of the Chapter I prohibition or Chapter II prohibition.
( ) Except where the context otherwise requires words and expressions in this Act shall have the same meaning as in the Treaty.").

The noble and learned Lord said: My Lords, I have already explained the reasoning that lies behind Amendment No. 187B. It is an attempt to place on the face of the Bill what I understand to be the definition to be found in the treaty. I move it shortly because I anticipate exactly the same response as previously. I beg to move.

Lord Simon of Highbury: My Lords, my response will not vary on this occasion. I do not think I have a wimpish draftsman this time; but, given the late hour, my response stands as the noble and learned Lord predicted.

Lord Fraser of Carmyllie: My Lords, with that compelling argument, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Haskel moved Amendment No. 188:

Page 29, line 18, leave out ("the production of").

The noble Lord said: My Lords, we have already debated this amendment. I beg to move.

On Question, amendment agreed to.

Lord Haskel moved Amendments Nos. 189 and 190:

Page 29, line 20, leave out ("the production of").
Page 29, line 21, at end insert--
("( ) Any power conferred on the Director by this Part to require information includes power to require any document which he believes may contain that information.").

The noble Lord said: My Lords, we have already debated Amendments Nos. 189 and 190. I beg to move en bloc.

On Question, amendments agreed to.

10.15 p.m.

Clause 58 [Principles to be applied in determining questions]:

Lord Fraser of Carmyllie moved Amendment No. 191:

23 Feb 1998 : Column 513

Page 29, line 23, leave out from beginning to ("questions") in line 24.

The noble and learned Lord said: My Lords, in many respects this is as important a group of amendments as we have discussed this evening, and again it is regrettable that we come to it at this late stage.

Perhaps I may look back at the history of Clause 58. If we reflect on what was said at Second Reading, I do not recall any contribution to that Second Reading debate where it was said that it was not desirable in one form or another to include Clause 58 within the Bill; that if Articles 85 and 86 of the Treaty were to be incorporated into our domestic law, so far as possible it should be clear that we understood where the jurisprudence of the European Court would be followed in the United Kingdom and where it would not be followed.

That broad proposition found no dissent in any part of your Lordships' House. However, I know that along Competition Street the noble Lord has the reputation of being a model Minister in terms of being prepared to listen to representations from all quarters. If I may say, by all reputation the noble Lord has been exceptionally patient with all representations that have been made to him from quarters that are clearly conflicting in their ultimate objectives. It is worth placing on record that we have a great respect for him for that.

However, it must be clear to the Minister as it is becoming clear to me that, while nobody wishes to see Clause 58 in any sense removed from the Bill, there is a growing anxiety--not only among those who are experts in this area of law, but also more broadly in the CBI and elsewhere--that we are potentially about to encounter a risk that, far from Clause 58 being of assistance to the courts of the United Kingdom--that is the ultimate stage of any competition law process--more importantly, it also will not help at an early stage when companies have to determine whether or not the conduct in which they are engaged is in breach of the provisions of the Bill. It is important that they are able to determine as clearly, effectively and as quickly as they can whether or not they will be in breach.

As more people look at the situation, there is a growing unease about the clarity of the definition or the extent of what the clause provides. When I said earlier in a slightly flippant way that it was a sort of "Eldorado" clause, I meant that with some seriousness and sincerity. It sounds a good, simple idea that lawyers and judges in the United Kingdom should know immediately to what jurisprudence they might refer. But the first thing that one finds in the clause--the purpose is simply enough stated--are the words,

    "The purpose of this section is to ensure that so far as is possible (having regard to any relevant differences between the provisions concerned), questions arising under this Part in relation to competition within the United Kingdom are dealt with in a manner which is consistent with the treatment of corresponding questions arising in Community law in relation to competition within the Community".

Before we get into the wording in the brackets, we already have the qualification,

23 Feb 1998 : Column 514

    "The purpose of this section is to ensure that so far as is possible".

No sooner do we finish with that qualification, than we have the greater qualification within the brackets--

    "(having regard to any relevant differences between the provisions concerned)".

A similar issue arises as soon as one reaches subsection (2) which states,

    "At any time when the court determines a question arising under this Part, it must act (so far as is compatible with the provisions of this Part and whether or not it would otherwise be required to do so) with a view to securing that there is no inconsistency".

We start by thinking it is all going to be seriously helpful. What concerns me is that those who appear before the competition courts and deal in competition law would not even begin to engage in a debate before the court as to what is the jurisprudence of the ECJ. They would spend a considerable, if not interminable, time in trying to discover whether or not what was being discussed was in the area described as "relevant differences" or issues of compatibility. This is a very real question. It would be helpful for the future development of competition law within the United Kingdom if we could discover before the Bill concludes its passage through Parliament just exactly where those issues of compatibility or incompatibility are said to arise.

I do not want at this hour to deal with this matter exhaustively but the jurisprudence of the ECJ has developed in such a way that there are detailed decisions about procedure and about how things are to be taken forward. However, as soon as we get to this Bill, we see in Clause 49(1), which we have not been too distantly considering, that,

    "The Director may make such rules about procedural and other matters in connection with the carrying into effect of the provisions of this Part as he considers appropriate".

In isolation in a domestic context one would have regarded that as being a perfectly sensible and sound provision to include within any Bill. However, because the ECJ has already developed an elaborate set of decisions about what is procedurally permissible and correct, there is immediately an issue of inconsistency, incompatibility, difference and the like. Furthermore, Clause 34 spells out the requirement for the director to give interim relief--interim measures. Again, the ECJ has developed a significant body of jurisprudence about that. Similarly, in relation to Clause 35 on fines, there are major matters which have been the subject of ECJ jurisprudence.

We would probably settle for an undertaking from the Minister that he will at least write to us to spell out where in Clause 58 the Government, in the way they have put together the framework of the Bill, recognise that there are indeed relevant differences or issues of incompatibility. I have given three examples and I have no doubt that my noble friend Lord Kingsland would be able to identify a large number of other issues. I hope I have emphasised sufficiently to the noble Lord that we are not hostile to the basic approach of having such a provision, but we are extremely concerned that, far from achieving simplification and uniformity with European law, we suffer the very real risk that our domestic law

23 Feb 1998 : Column 515

will become even more complicated than would be the case if the clause were to be omitted. We are not suggesting that as an approach but we are anxious that real complications might emerge. I beg to move.

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