Part 2: Competition Chapter 3: Markets Schedule 8: Acceptance of undertakings at any stage of a market study or investigation
Paragraph 1 is self-explanatory.
	Paragraph 2 of Schedule 8 makes amendments to section 131B of the Enterprise Act 2002 so that in a case where a market study has been undertaken, and the CMA has accepted an undertaking under the new section 154A, either instead of, or in addition to, making an investigation for a market reference under section 131, the market study report must contain that decision.
	Paragraph 3 of Schedule 8 makes amendments to section 133A of the Enterprise Act 2002 which deals with which functions of the CMA must be carried out on its behalf by the group constituted under Schedule 4 to the Enterprise and Regulatory Reform Act 2013 following the making of a reference under any of sections 131, 132 or 140A of the Enterprise Act 2002 ("the CMA Group") and which may be carried out by the CMA Board. Section 133A(1) lists the decisions which must be made by the CMA Group. That subsection is amended to include a decision to accept an undertaking in lieu of a report under section 154A. Subsection (2) lists the decisions which may be made by the CMA Board where the CMA Group has ceased to exist. It is amended to include a decision to accept an undertaking in lieu of a report.
	Paragraph 4 of Schedule 8 amends section 136 to make provision so that a report on a market investigation reference must include any decision made by the CMA during the course of the investigation to accept an undertaking partially in lieu of a report.
	Paragraph 5 of Schedule 8 makes amendments to section 139 Enterprise Act 2002 as a consequence of the introduction of the new section 154A of the Enterprise Act 2002. Section 139 concerns the circumstances in which the Secretary of State may give a notice to the CMA ("a public interest intervention notice") that they believe it is or may be the case that one or more public interest considerations is relevant to a matter in relation to which a market study notice has been published, or a consultation regarding a possible reference under section 131 has commenced in accordance with section 169 of the Enterprise Act.
	Subparagraphs (2) and (3) of Paragraph 5 amend sections 139(1A)(a) and 139(1B)(a) so that the permitted period within which the Secretary of State may give a public interest intervention notice ends where the CMA accepts an undertaking fully in lieu of a reference under the new section 154A (whether in a case in which a market study notice has been published by the CMA, or a consultation regarding a possible reference commenced under section 169 of the Enterprise Act 2002). Should the CMA accept undertakings partially in lieu and then plan to make a reference in relation to other features of a market, the Secretary of State retains the power to issue a public interest intervention notice. Subsections (4) and (5) make consequential amendments to reflect the replacement of section 154 with the new section 154A of the Enterprise Act 2002.
	Paragraph 6 of Schedule 8 makes amendments to section 140 of the Enterprise Act 2002. Section 140 makes provision regarding public interest intervention notices which may be given under section 139. By section 140(4) a public interest intervention notice comes into force when it is given and remains in force until the matter to which it relates is "finally determined" under the Chapter. Section 140(5) sets out when a matter is finally determined for the purposes of subsection (4). Paragraph 6 amends the list of circumstances in section 140(5) so that it includes the acceptance by the CMA of an undertaking fully in lieu of a reference. Should the CMA accept undertakings partially in lieu, any public interest intervention notice would remain in force.
	Subparagraph (3) of Paragraph 6 makes a consequential amendment to section 140(6A) to replace the reference to former section 154 with the new section 154A of the Enterprise Act 2002.
	Paragraph 7 of Schedule 8 amends section 150 of the Enterprise Act 2002 so that the Secretary of State’s power of veto over the acceptance of undertakings applies to the new section 154A power to accept undertakings in lieu of a reference as it previously applied to undertakings in lieu under the old section 154.
	Paragraph 8 of Schedule 8 inserts new section 154A in the Enterprise Act 2002 in substitution for section 154 of the Enterprise Act 2002, replacing the CMA’s power to accept undertakings in lieu with a power to accept two types of undertakings: undertakings in lieu of a reference and undertakings in lieu of a report. Both types of undertaking can be accepted either partially or in full of the reference or report, allowing the CMA to use them to narrow the issues which require further investigation either before, or during the course of, a market investigation.
	New section 154A(1) of the Enterprise Act 2002 expands the temporal scope of acceptance of undertakings by the CMA. It provides that the power to accept an undertaking applies where no market study notice has been published under section 130A but the CMA considers it has the power to make a market investigation reference under section 131, and otherwise intends to make a reference, where a market study notice has been published under section 130A but no market investigation reference has been made under section 131, or where a market investigation reference has been made under section 131, but no report published under section 136. Acceptance of undertakings after a market investigation reference has been made will allow the CMA to use them to narrow issues during the course of a market investigation.
	New section 154A(2) of the Enterprise Act 2002 mirrors former section 154(3) of the Enterprise Act 2002, and provides that the new power is to accept, from such persons as it considers appropriate, and to take such actions as it considers appropriate, for the purpose of remedying, mitigating or preventing an adverse effect on competition or any detrimental effect on customers so far as it has resulted from the adverse effect on competition, or may be expected to result from it.
	New section 154A(3) of the Enterprise Act 2002 provides that undertakings accepted in circumstances where the CMA considers it has power to make a reference and otherwise intends to make a reference, or where a market study notice has been published up to the making of a market investigation reference are known as "undertakings in lieu of a reference". Undertakings accepted after the making of a reference under section 131 or 132, but before the publication of a report under section 136 are known as "undertakings in lieu of a report".
	New section 154A(4) of the Enterprise Act 2002 provides that undertakings in lieu of a reference may be accepted instead of making a reference, in which case they are "undertakings fully in lieu of a reference", or in addition to making a reference under section 131 in which case they are "undertakings partially in lieu of a reference". Any reference made would have to relate to features other than those to which the undertakings relate, as a result of the restrictions in section 156 of the Enterprise Act 2002 (see further below). Undertakings in lieu of a report may be accepted either instead of publishing a report under section 136 ("undertakings fully in lieu of a report"), or in addition to publishing such a report ("undertakings partially in lieu of a report"). Where undertakings are accepted partially in lieu of a report, the questions which must be addressed in the report are amended by section 156 of the Enterprise Act 2002.
	New section 154A(5) of the Enterprise Act 2002 mirrors former section 154(3) of the Enterprise Act 2002, but is applied only in relation to undertakings accepted fully in lieu of either a reference or a report. The CMA is required to have regard to the need to achieve as comprehensive a solution as is reasonable and practicable as regards the adverse effect they are targeted at. That the duty is not applied to undertakings accepted partially in lieu of a reference or report recognises that the CMA may continue its inquiry in relation to other features which give rise to competition concerns.
	New section 154A(6) of the Enterprise Act 2002 provides that when accepting undertakings under the section, the CMA may in particular have regard to the effect on any action on any relevant customer benefits or the feature or features concerned, mirroring former section 154(4).
	New section 154A(7) of the Enterprise Act 2002 follows the approach in former section 154(5) and the restriction in section 138(6) of the Enterprise Act 2002. This provision prevents the CMA taking action in relation to a potential detrimental effect on customers unless they are also taking action in relation to the underlying adverse effect on competition. Where a detrimental effect on customers has already materialised, the CMA is able to address the adverse effect or the customer detriment, in the alternative.
	Subsections (8), (9) and (10) of the new section 154A Enterprise Act 2002 mirror the previous section 154(6), (7) and (8) Enterprise Act 2002 respectively. Undertakings accepted under the new section 154A come into force when accepted, and may be varied, or superseded by other undertakings and may be released by the CMA. The CMA is required, as soon as reasonably practicable, to consider any representations received by it in relation to the variation or release of any undertaking accepted under the section. The powers to accept undertakings are subject to the Secretary of State’s power of veto at section 150 of the Enterprise Act 2002, and the procedural requirements set out in section 155 of the Enterprise Act 2002.
	Paragraph 9 of Schedule 8 amends section 155 of the Enterprise Act 2002 (undertakings in lieu: procedural requirements).
	Sub-paragraph (2) of Paragraph 9 amends subsection 155(1) so that the procedural requirements and restrictions set out in the section apply to the new undertakings to be accepted under section 154A as they applied to undertakings in lieu under section 154. These include specific consultation and publication requirements.
	Sub-paragraph (3) of Paragraph 9 repeals subsection 155(3), replacing it with a new subsection (3A). This requires the CMA to set out, in a notice detailing an undertaking which it proposes to accept, the adverse effect on competition and any detrimental effect on customers resulting from the adverse effect on competition, which the CMA has identified. The obligation to include the terms of the reference which the CMA considers it has the power to make, and would otherwise intend to make, is omitted. This reflects that in the early stages of a market study, the CMA may not be in a position to set out the terms of the market investigation reference in full, even in circumstances where it is satisfied that there is an adverse effect on competition in the market which the undertaking would remedy, mitigate or prevent.
	Sub-paragraph (4) of Paragraph 9 makes consequential changes to amend references to former section 154 to refer to new section 154A of the Enterprise Act 2002.
	Paragraph 10 of Schedule 8 amends section 156 Enterprise Act 2002 which deals with the effects of undertakings and the bar on making future references, to reflect the new types of undertaking created by the new section 154A.
	Sub-paragraphs (1) and (2) of paragraph 10 of the Schedule are self-explanatory.
	Sub-paragraphs (3) and (4) of paragraph 10 of the Schedule amend section 156(A1) and (1) so that the restrictions set out in those sub-section applies to undertakings accepted under the new section 154A as they applied to undertakings in lieu accepted under section 154. The references to "any feature" in the amended section 156(A1)(b) and new section 156(1)(ab) reflects that undertakings may be accepted partially in lieu. Where undertakings have been accepted in relation to particular features, or combinations of features, a reference may not be made in relation to the same feature or combination of features within the following 12 months, however this does not prevent the making of a reference in relation to another feature in the same market.
	This also means that where undertakings in lieu have been accepted in relation to a specific feature in a market, that will have the effect of preventing the making of an ordinary reference which relates to the market as a whole (i.e. any feature of the market which may be present) within 12 months following the acceptance of those undertakings. In contrast, where the CMA Board narrows the scope of a reference under section 133 of the Enterprise Act 2002, this would not prevent the reference of the entire market where this is considered appropriate.
	For example, where an undertaking in lieu has been accepted in relation to feature A in market Z, it would not be possible for an ordinary reference to be made in the following 12 months relating to feature A in market Z, nor a cross-market reference which includes feature A in relation to market Z. The CMA would be able to make an ordinary reference in relation to any other feature in market Z, and a cross-market reference which includes feature A in relation to any other market except Z.
	Sub-paragraph (5) of paragraph 10 of the Schedule is self-explanatory.
	Sub-paragraph (6) of paragraph 10 of the Schedule inserts new subsections (4), (5), (6) and (7) into section 156 of the Enterprise Act 2002 to address the effects of undertakings in lieu of a report under new section 154A.
	New subsections 156(4) and (5) of the Enterprise Act 2002 provide that where the CMA has accepted an undertaking in lieu of a report, the CMA’s obligation to consider the questions set out in section 134 of the Enterprise Act 2002 does not apply in relation to the feature, or features, to which the undertakings relate. Where an undertaking is accepted partially in lieu of a report, the report will therefore only be required to address the features which are not resolved by the acceptance of the undertaking or group of undertakings. Where an undertaking is accepted fully in lieu of a report, there is therefore no obligation to publish a report under section 136 and the duty under section 138 does not arise.
	The new subsection 156(6) provides that where the CMA accepts an undertaking fully in lieu of a report, the CMA must, instead of the section 136 report, prepare and publish a report setting out its decision to accept the undertaking, reasons for the decision and such information as it considers appropriate for facilitating a proper understanding of the decision and reasons.
	The new subsection 156(7) is self-explanatory.
	Paragraph 13 of Schedule 8 amends section 162 of the Enterprise Act 2002 which sets out the duty on the CMA to keep the carrying out of undertakings under review, and from time to time consider whether they have been or are being complied with, and or need to be varied or superseded by another undertaking. Paragraph 13 amends sections 162(4) and (8) of the Enterprise Act 2002 so that this duty will apply to undertakings accepted under section 154A as it applied to undertakings accepted under section 154 and includes the new types of undertaking in the definition of "enforcement undertaking". This has the effect of making undertakings under new section 154A Enterprise Act 2002 enforceable by virtue of existing section 167 of the Enterprise Act 2002 which applies to any enforcement undertaking.
	Paragraph 14 of Schedule 8 makes amendment to section 169 of the Enterprise Act 2002. Section 169 requires a relevant authority (that is the CMA, or the Secretary of State in cases involving a full or restricted reference) so far as practicable, to consult where it proposes to make a relevant decision if it considers such decisions are likely to have a substantial impact on the interests of any person. Section 169(6) Enterprise Act 2002 sets out a list of "relevant decisions". Paragraph 14 of Schedule 8 amends this list so it includes decisions to accept an undertaking in lieu of a reference under section 154A as it previously applied to decisions to accept undertakings in lieu under section 154.
	Paragraph 15 of Schedule 8 makes consequential changes to section 174C of the Enterprise Act 2002 to amend references to former section 154 to refer to new section 154A of the Enterprise Act 2002. Section 174C supplements section 174B which sets out a restriction on the exercise of powers to impose penalties under section 174A for non-compliance with an information notice issued under section 174. There is a limitation period imposed on the issue of a civil penalty for non-compliance with an information notice, which, as amended by Schedule 9, is 10 weeks from the "relevant day". By section 176B(6), where the information gathering power is exercised for the purpose of the CMA’s enforcement functions in relation to a matter that is the subject of a possible reference under section 131, the relevant day is the day when the CMA finally decides whether to make the reference.
	Section 174C(3) makes provision regarding when the relevant day is for the purposes of section 176B(6). Paragraph 15 amends section 174C(3) so that the decision to accept an undertaking fully in lieu of a reference under section 154A will be taken as the day the CMA finally decides whether to make a reference under section 131 for this purpose, and so the limitation period will run from that date.
	Paragraph 16 of Schedule 8 amends the list of circumstances where a market investigation reference is deemed to be finally determined set out in section 183(3)(a) of the Enterprise Act 2002 to include the acceptance of an undertaking fully in lieu of a report under new section 154A Enterprise Act 2002.
	Paragraph 17 of Schedule 8 makes consequential changes to amend references to former section 154 in paragraph 29 of Schedule 4 to the Enterprise and Regulatory Reform Act 2013 to refer to new section 154A of the Enterprise Act 2002.