Part 1: Digital Markets Final offer mechanism Section 38: Power to adopt final offer mechanism
This section provides the CMA with the power to use what is called the "final offer mechanism" (FOM) as a backstop tool to enforce conduct requirements to offer fair and reasonable payment terms.
	Subsection (1) provides that the CMA can require the designated undertaking and invite a third party to submit what they consider to be fair payment terms for a transaction (their "final offer payment terms"), provided the CMA considers that three conditions are met.
	The first condition, set out in subsection (2), requires the transaction to be a transaction in which the designated undertaking would either provide goods or services to the third party, acquire goods or services from the third party or use goods or services belonging to or produced by the third party. This includes situations where the parties are re-negotiating terms or agreeing terms in relation to a new transaction, including one which arises as a result of a newly established obligation to pay.
	Subsection (3) sets out the second condition, which is that the designated undertaking has failed to agree fair and reasonable payment terms, and in doing so has breached an enforcement order relating to the breach of a conduct requirement to trade on fair and reasonable terms.
	Subsection (4) sets out the third condition, which is that the CMA considers that it could not resolve the relevant breach satisfactorily and within a reasonable time period by exercising any of its other functions under the digital markets regime. These other functions could include further conduct requirements or PCIs, or other enforcement action by way of financial penalties, enforcement orders and court orders. The decision to adopt FOM does not preclude the CMA from concurrently exercising any of its other functions.
	Subsection (5) provides that in subsection (1), "transaction" means not only a potential future transaction, but also the future performance of an ongoing transaction. This specifies that FOM is forward-looking, in the sense that it can apply either in relation to the renegotiation of an existing arrangement, or in relation to a new transaction (including one which arises as a result of a newly established obligation to pay).
	Subsection (6) provides that the CMA can use its investigatory and enforcement powers where a suspected breach of a Final Offer Order occurred during a period of designation or while transitional provisions under section 17 are or have been in place.