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Communications Bill


Communications Bill
Part 5 — Competition in communications markets
Chapter 1 — Functions of OFCOM under competition legislation

    327

 

 368   OFCOM’s functions under the Competition Act 1998

     (1)    The functions to which subsection (2) applies shall be concurrent functions of

OFCOM and the Office of Fair Trading.

     (2)    This subsection applies to the functions of the Office of Fair Trading under the

provisions of Part 1 of the Competition Act 1998 (c. 41) (other than sections

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38(1) to (6) and 51) so far as relating to—

           (a)           agreements, decisions or concerted practices which are of the kind

mentioned in section 2(1) of that Act (agreements, decisions or practices

affecting trade and having as their object or effect the prevention,

restriction or distortion of competition) and which relate to activities

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connected with communications matters; or

           (b)           conduct which is of the kind mentioned in section 18(1) of that Act

(conduct abusing a dominant position) and relates to such activities.

     (3)    So far as necessary for the purposes of, or in connection with, the provisions of

subsections (1) and (2), references to the Office of Fair Trading in Part 1 of the

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Competition Act 1998 are to be read as including references to OFCOM,

except—

           (a)           in sections 38(1) to (6), 51, 52(6) and (8) and 54, and

           (b)           where the context otherwise requires.

     (4)    In subsection (2), the reference to activities connected with communications

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matters, so far as it is a reference to activities connected with any apparatus

falling within paragraph (d) of section 366(1), includes a reference to—

           (a)           the supply and export of any such apparatus; and

           (b)           the production or acquisition of any such apparatus for supply or

export.

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     (5)    In section 54 of the Competition Act 1998—

           (a)           in subsection (1) (definition of “regulator” for the purposes of Part 1 of

that Act), for paragraph (a) there shall be substituted—

                        “(a)                           the Office of Communications;”

           (b)           in subsection (4) (power to make regulations about concurrent

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functions of the Office of Fair Trading and sectoral regulators), “or by

Chapter V of Part I of the Transport Act 2000” there shall be inserted “to

this Act, by Chapter 5 of Part 1 of the Transport Act 2000 or by section

368 of the Communications Act 2003”.

     (6)    In paragraph 5 of Schedule 2 to the Competition Act 1998 (publication of list of

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networking arrangements under the 1990 Act excluded from the Chapter 1

prohibition)—

           (a)           in sub-paragraph (2), for “The Independent Television Commission

(‘ITC’)” there shall be substituted “OFCOM”; and

           (b)           in sub-paragraph (3), for “The ITC” there shall be substituted

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“OFCOM”.

     (7)    In section 59(1) of the Competition Act 1998 (interpretation of Part 1), after the

definition of “Minister of the Crown” there shall be inserted—

                                  “‘OFCOM’ means the Office of Communications;”.

     (8)    OFCOM may carry out, in respect of activities connected with communications

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matters and concurrently with the Office of Fair Trading, the functions of the

Office of Fair Trading under any of paragraphs 3, 7, 19(3) and 36 to 39 of

Schedule 13 to the Competition Act 1998 (transitional provisions).

 

 

Communications Bill
Part 5 — Competition in communications markets
Chapter 1 — Functions of OFCOM under competition legislation

    328

 

     (9)    If any question arises as to whether, by virtue of this section, any functions fall

to be, or are capable of being, carried out by OFCOM in relation to a particular

case, that question shall be referred to and determined by the Secretary of State.

     (10)   No objection shall be taken to anything done under by or in relation to OFCOM

under the Competition Act 1998 (c. 41) on the ground that it should have been

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done by or in relation to the Office of Fair Trading.

     (11)   Subject to subsection (12), section 3 does not apply in relation to anything done

by OFCOM in the carrying out of their functions by virtue of this section.

     (12)   In the carrying out of any functions by virtue of this section OFCOM may

nevertheless have regard to any of the matters in respect of which a duty is

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imposed by section 3(1) or (4) if it is a matter to which the Office of Fair Trading

is entitled to have regard in the carrying out of those functions.

 369   Application of the Competition Act 1998 to news provision

     (1)    Section 194A of the 1990 Act (which modifies the Competition Act 1998 in

relation to agreements relating to Channel 3 news provision) shall be amended

15

as follows.

     (2)    In subsection (1) (meaning of “relevant agreement”)—

           (a)           for “section 31A(a)” there shall be substituted “section 278 of the

Communications Act 2003”; and

           (b)           for “section 31(2)” (in both places) there shall be substituted “that

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section”.

     (3)    In subsections (2), (6) and (7)(b)(i) (consultations with and notifications to the

Office of Fair Trading), after the words “the OFT”, in each place where they

occur, there shall be inserted “and OFCOM”.

     (4)    In subsection (3)(b)—

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           (a)           for “section 31(2)” there shall be substituted “section 278 of the

Communications Act 2003”; and

           (b)           for “section 31(1) and (2)” there shall be substituted “that section of that

Act of 2003”.

     (5)    In subsection (5)(c) (declaration without notification), after “the OFT” there

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shall be inserted “or OFCOM or both of them”.

     (6)    In subsection (7) (restriction on exercise by Office of Fair Trading of Chapter III

powers)—

           (a)           for “The OFT may not” there shall be substituted “Neither the OFT nor

OFCOM may”; and

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           (b)           for paragraph (a) there shall be substituted—

                        “(a)                           the Secretary of State has been notified by the OFT or (as

the case may be) by OFCOM of its or their intention to

do so; and”.

     (7)    In subsection (8) (notice by Office of Fair Trading to the Secretary of State), for

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the words from the beginning to “assist” in paragraph (a) there shall be

substituted—

           “(8)              Where the OFT or OFCOM is or are proposing to exercise any Chapter

III powers in respect of a relevant agreement, it or they must give the

 

 

Communications Bill
Part 5 — Competition in communications markets
Chapter 2 — Newspaper mergers

    329

 

Secretary of State particulars of the agreement and such other

information—

                  (a)                 it considers or (as the case may be) they consider will assist”.

     (8)    In subsection (9), in the definition of “Chapter III powers”, for “given to the

OFT by” there shall be substituted “of the OFT and of OFCOM under”.

5

Chapter 2

Newspaper mergers

Introductory

 370   Repeal of existing newspaper merger regime

Sections 57 to 62 of the Fair Trading Act 1973 (c. 41) (newspaper merger

10

references) shall cease to have effect.

 371   Repeal of exclusion for newspaper mergers from general merger controls

Section 69 of the Enterprise Act 2002 (c. 40) (exclusion of newspaper mergers

from references under Part 3 of that Act) shall cease to have effect.

Adaptation for newspaper mergers of main merger regime

15

 372   Newspaper public interest considerations

After section 58(2) of the Enterprise Act 2002 (considerations specified as

public interest considerations for the purpose of the main merger regime) there

shall be inserted—

           “(2A)              The need for—

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                  (a)                 accurate presentation of news; and

                  (b)                 free expression of opinion;

                         in newspapers is specified in this section.

           (2B)              The need for, to the extent that it is reasonable and practicable, a

plurality of views in newspapers in each market for newspapers in the

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United Kingdom or a part of the United Kingdom is specified in this

section.”

 373   Adaptation of role of OFT in initial investigations and reports

     (1)    In section 44(3)(b) of the Enterprise Act 2002 (initial report by OFT in public

interest cases must include summary of representations about public interest

30

considerations) after the word “concerned” there shall be inserted “(other than

a newspaper public interest consideration)”.

     (2)    After section 44(5) of that Act there shall be inserted—

           “(5A)              The report may, in particular, contain a summary of any

representations about the case which have been received by the OFT

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and which relate to any newspaper public interest consideration

mentioned in the intervention notice concerned and which is or may be

 

 

Communications Bill
Part 5 — Competition in communications markets
Chapter 2 — Newspaper mergers

    330

 

relevant to the Secretary of State’s decision as to whether to make a

reference under section 45.”

     (3)    After section 44(7) of that Act there shall be inserted—

           “(8)              In this Part “newspaper public interest consideration” means any

consideration which, at the time of the giving of the intervention notice

5

concerned—

                  (a)                 is specified in section 58(2A) or (2B); or

                  (b)                 in the opinion of the Secretary of State, is concerned with

newspapers and ought to be specified in section 58.

           (9)              In this Part “newspaper” means a daily, Sunday or local (other than

10

daily or Sunday) newspaper circulating wholly or mainly in the United

Kingdom or in a part of the United Kingdom.

           (10)              The Secretary of State may by order amend subsection (9).”

 374   Additional investigation and report by OFCOM

After section 44 of the Enterprise Act 2002 (c. 40) (investigation and report by

15

OFT in public interest cases) there shall be inserted—

       “44A Additional investigation and report by OFCOM: newspaper mergers

           (1)           Subsection (2) applies where—

                  (a)                 the Secretary of State has given an intervention notice in relation

to a relevant merger situation; and

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                  (b)                 the intervention notice mentions any newspaper public interest

consideration.

           (2)           OFCOM shall, within such period as the Secretary of State may require,

give a report to the Secretary of State on the effect of the consideration

or considerations concerned on the case.

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           (3)           The report shall contain—

                  (a)                 advice and recommendations on any newspaper public interest

consideration mentioned in the intervention notice concerned

and which is or may be relevant to the Secretary of State’s

decision as to whether to make a reference under section 45; and

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                  (b)                 a summary of any representations about the case which have

been received by OFCOM and which relate to any such

consideration.

           (4)           OFCOM shall carry out such investigations as they consider

appropriate for the purposes of producing a report under this section.”

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Extension of special public interest regime

 375   Extension of special public interest regime for certain newspaper mergers

     (1)    Section 59 of the Enterprise Act 2002 (intervention by Secretary of State in

special public interest cases) shall be amended as follows.

     (2)    For subsections (3) and (4) (definition of “special merger situation”) there shall

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Communications Bill
Part 5 — Competition in communications markets
Chapter 2 — Newspaper mergers

    331

 

be substituted—

           “(3)              For the purposes of this Part a special merger situation has been created

if—

                  (a)                 the condition mentioned in subsection (3A) is satisfied; and

                  (b)                 immediately before the enterprises concerned ceased to be

5

distinct, either—

                        (i)                        the conditions mentioned in subsection (3B) were

satisfied; or

                        (ii)                       the condition mentioned in subsection (3C) was

satisfied.

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           (3A)              The condition mentioned in this subsection is that—

                  (a)                 no relevant merger situation has been created because of section

23(1)(b) and (2)(b); but

                  (b)                 a relevant merger situation would have been created if those

enactments were disregarded.

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           (3B)              The conditions mentioned in this subsection are that—

                  (a)                 at least one of the enterprises concerned was carried on in the

United Kingdom or by or under the control of a body corporate

incorporated in the United Kingdom; and

                  (b)                 a person carrying on one or more of the enterprises concerned

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was a relevant government contractor.

           (3C)              The condition mentioned in this subsection is that, in relation to the

supply of newspapers of any description, at least one-quarter of all the

newspapers of that description which were supplied in the United

Kingdom, or in a substantial part of the United Kingdom, were

25

supplied by the person or persons by whom one of the enterprises

concerned was carried on.”

     (3)    After subsection (6) there shall be inserted—

           “(6A)              For the purpose of deciding whether the proportion of one-quarter

mentioned in subsection (3C) is fulfilled with respect to newspapers of

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any description, the decision-making authority shall apply such

criterion (whether value, cost, price, quantity, capacity, number of

workers employed or some other criterion, of whatever nature), or such

combination of criteria, as the decision-making authority considers

appropriate.

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           (6B)                            References in subsection (3C) to the supply of newspapers shall, in

relation to newspapers of any description which are the subject of

different forms of supply, be construed in whichever of the following

ways the decision-making authority considers appropriate—

                  (a)                 as references to any of those forms of supply taken separately;

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                  (b)                 as references to all those forms of supply taken together; or

                  (c)                 as references to any of those forms of supply taken in groups.

           (6C)              For the purposes of subsection (6B) the decision-making authority may

treat newspapers as being the subject of different forms of supply

whenever—

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                  (a)                 the transactions concerned differ as to their nature, their parties,

their terms or their surrounding circumstances; and

 

 

Communications Bill
Part 5 — Competition in communications markets
Chapter 2 — Newspaper mergers

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                  (b)                 the difference is one which, in the opinion of the decision-

making authority, ought for the purposes of that subsection to

be treated as a material difference.

           (6D)              The criteria for deciding when newspapers can be treated, for the

purposes of this section, as newspapers of a separate description shall

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be such as in any particular case the decision-making authority

considers appropriate in the circumstances of that case.

           (6E)              The Secretary of State may by order amend the condition mentioned in

subsection (3)(b)(ii).”

 376   Adaptation of role of OFT in special public interest regime

10

     (1)    Section 61 of the Enterprise Act 2002 (c. 40) (initial investigation and report by

OFT in special public interest cases) shall be amended as follows.

     (2)    In subsection (3)(b) (report must include summary of representations about

considerations specified in section 58) after the word “concerned” there shall

be inserted “(other than a consideration which, at the time of the giving of the

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notice, was specified in section 58(2A) or (2B))”.

     (3)    In subsection (4) for the words “59(4)(b)” there shall be substituted “59(3B)(b)”.

     (4)    After subsection (4) there shall be inserted—

           “(4A)              The report may, in particular, contain a summary of any

representations about the case which have been received by the OFT

20

and which relate to any consideration which—

                  (a)                 is mentioned in the special intervention notice concerned and,

at the time of the giving of that notice, was specified in section

58(2A) or (2B); and

                  (b)                 is or may be relevant to the Secretary of State’s decision as to

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whether to make a reference under section 62.”

 377   Additional investigation and report by OFCOM: special public interest cases

After section 61 of the Enterprise Act 2002 (initial investigation and report by

OFT in special public interest cases) there shall be inserted—

       “61A Additional investigation and report by OFCOM: certain newspaper

30

mergers

           (1)           Subsection (2) applies where—

                  (a)                 the Secretary of State has given a special intervention notice in

relation to a special merger situation; and

                  (b)                 the special intervention notice mentions any consideration

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which, at the time of the giving of the notice, was specified in

section 58(2A) or (2B).

           (2)           OFCOM shall, within such period as the Secretary of State may require,

give a report to the Secretary of State on the effect of the consideration

or considerations concerned on the case.

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           (3)           The report shall contain—

                  (a)                 advice and recommendations on any consideration which—

 

 

Communications Bill
Part 5 — Competition in communications markets
Chapter 2 — Newspaper mergers

    333

 

                        (i)                        is mentioned in the special intervention notice

concerned and, at the time of the giving of that notice,

was specified in section 58(2A) or (2B); and

                        (ii)                       is or may be relevant to the Secretary of State’s decision

as to whether to make a reference under section 62; and

5

                  (b)                 a summary of any representations about the case which have

been received by OFCOM and which relate to any such

consideration.

           (4)           OFCOM shall carry out such investigations as they consider

appropriate for the purposes of producing a report under this section.”

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New general functions in relation to newspaper mergers

 378   Public consultation in relation to newspaper mergers

After section 104 of the Enterprise Act 2002 (c. 40) there shall be inserted—

       “104A Public consultation in relation to newspaper mergers

           (1)           Subsection (2) applies where the Commission—

15

                  (a)                 is preparing—

                        (i)                        a report under section 50 on a reference which specifies

a newspaper public interest consideration; or

                        (ii)                       a report under section 65 on a reference which specifies

a consideration specified in section 58(2A) or (2B); and

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                  (b)                 is not under a duty to disregard the consideration concerned.

           (2)           The Commission shall have regard (among other things) to the need to

consult the public so far as they might be affected by the creation of the

relevant merger situation or special merger situation concerned and so

far as such consultation is practicable.

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           (3)           Any consultation of the kind mentioned in subsection (2) may be

undertaken by the Commission by consulting such representative

sample of the public or section of the public concerned as the

Commission considers appropriate.”

 379   General information duties in relation to newspaper mergers

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     (1)    Section 105 of the Enterprise Act 2002 (general information duties of OFT and

Competition Commission) shall be amended as follows.

     (2)    After subsection (1) there shall be inserted—

           “(1A)              Where OFCOM decide to investigate a matter so as to make a report

under section 44A or 61A, they shall, so far as practicable, take such

35

action as they consider appropriate to bring information about the

investigation to the attention of those whom they consider might be

affected by the creation of the relevant merger situation concerned or

(as the case may be) the special merger situation concerned.”

     (3)    In subsection (2) (exclusion for merger notices) for the words “Subsection (1)

40

does” there shall be substituted “Subsections (1) and (1A) do”.

 

 

 
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