Part 2: Competition Chapter 3: Markets New section 161E – Implementation trials: supplementary
New section 161E of the Enterprise Act 2002 makes provision regarding the applicability of other provisions in Part 4 to the new powers to undertake implementation trials, and other procedural provisions.
	New section 161E(1) requires the CMA, before accepting an undertaking for a purpose permitted by new subsection 161C, to provide the person with information about the possible consequences of failing to comply with it. Any person to whom an undertaking accepted under section 161B relates has a duty to comply with it, which is owed to any person who may be affected by a contravention of it and which is actionable under section 167(4) of the Enterprise Act 2002. Further, the new subsection 167A inserted by Schedule 10 makes provision for a relevant authority to impose a civil penalty for failure to comply with undertakings accepted under Part 4 of the Enterprise Act 2002.
	New section 161E(2) requires the CMA to begin an implementation trial either within the 6 month window (extendable by 4 months) under section 138A of the Enterprise Act 2002, where the trial immediately follows a market investigation, or within 6 months of the decision to vary a remedy following a decision that action should be taken under section 162A(5) as a remedy has been ineffective.
	New section 161E(3) applies the provisions at section 138(3), (5), and (6) to decisions regarding remedies for implementation trials as they apply to decisions concerning action to be taken under section 138(2). That is, decisions concerning implementation trial measures must be consistent with the decisions included in the relevant report published under section 136, unless there has been a material change in circumstances since the preparation of the report or the CMA otherwise has a special reason for deciding differently. The CMA may have regard to the effect of any action on any relevant customer benefits of the feature or features of the market or markets concerned. The CMA may not take action to remedy, mitigate or prevent any detrimental effect on customers which is anticipated to arise from the adverse effect on competition if that detrimental effect has yet to arise, unless the adverse effect on competition is being remedied, mitigated or prevented. There is no requirement for the CMA to have regard to the need to ensure that remedies are as comprehensive as is reasonably practicable, given the nature of an implementation trial.
	New section 161E(4) applies the provisions in section 147(3)(b), (4), (5) and (6) of the Enterprise Act 2002 to decisions made regarding implementation trials by the Secretary of State in a restricted public interest case as they would apply to final remedies imposed in those cases. These are the requirement for the Secretary of State to have regard to the CMA’s report, the bar on the Secretary of State challenging the CMA’s decision as to whether there is an adverse effect on competition, the power to have regard to the effect of any action on any relevant customer benefits of the feature/s concerned and the restriction on the Secretary of State taking action in relation to potential detrimental effect on customers unless the underlying adverse effect on competition is being remedied.
	New section 161E(5) applies the provisions in section 147A(3) and (4)(b) of the Enterprise Act 2002 to decisions made regarding implementation trials by the Secretary of State in a full public interest reference case as they would apply to a final remedy in those cases. These are the requirement for the Secretary of State to have regard to the CMA’s report and the power to have regard, in particular, to any detrimental effect on customers so far as resulting from effects adverse to the public interest concerned.
	New sections 161E(6) and (7) apply the procedural obligations to undertakings accepted and orders made under section 161C for the purposes of an implementation trial as they apply to the making of any final order under section 161 of the Enterprise Act 2002 or acceptance of an undertaking under section 159 of the Enterprise Act 2002.
	Paragraph 5 of Schedule 9 inserts new Section 162B of the Enterprise Act 2002, which provides a power for the CMA or the Secretary of State to vary implementation trial remedies. By new subsection (1), the section applies where the CMA or Secretary of State has imposed implementation trial measures in accordance with section 161C.
	New section 162B(2) requires the CMA to keep under review the effectiveness of any measure which has been imposed.
	New section 162B(3) requires the CMA, from time to time, to consider whether a measure has been, or is being, complied with, and whether any undertaking accepted or order imposed, is no longer appropriate and needs to be varied or revoked, or in the case of undertakings, one or more parties could be released from it, or it should be superseded by a new undertaking.
	New section 162B(4) requires the CMA, within the implementation trial period, to provide the Secretary of State with such advice as it considers appropriate in relation to the variation of any measure accepted or imposed by the Secretary of State under section 161C.
	New section 162B(5) makes provision for the CMA and Secretary of State to take such action as they consider appropriate in relation to the variation or release of undertakings or orders, or replacement by new undertakings or orders during the implementation trial period.
	New section 162B(6) prevents the CMA or Secretary of State from varying an implementation trial measure in such a manner that it would extend the implementation trial period and requires any varied measure to remain in compliance with section 161C.
	New sections 162B(8), (9) and (10) apply the provisions at sections 138(3), (5) and (6) to variations of implementation trial measures by the CMA, and the provisions at sections 147(3)(b), (5) and (6) and sections 147A(3) to variations of implementation trials measures by the Secretary of State, as they apply to measures imposed at the outset of an implementation trial.
	Paragraph 6 of Schedule 9 makes amendments to section 165 of the Enterprise Act 2002 to apply the procedural requirements set out in Schedule 10 (other than the provision in paragraph 9 of that Schedule, which allow the relevant authority to dispense with the requirements where there are special reasons for doing so) to any decision to accept an undertaking or make an order for the purpose of an implementation trial under section 161C, as they apply in relation to undertakings accepted under section 159 and orders made under sections 160 and 161 of the Enterprise Act 2002. Schedule 10 sets out specific consultation and publication requirements.
	Paragraph 7 of Schedule 9 makes amendments to section 167 of the Enterprise Act 2002 so that enforcement action can be taken in relation to undertakings accepted and orders imposed for the purpose of an implementation trial, as can be taken in relation to other types of order and undertaking under Part 4 Enterprise Act 2002.
	Paragraph 8 of Schedule 9 makes amendments to new section 167A of the Enterprise Act 2002 (inserted by paragraph 16 of Schedule 11 to this Act - Civil penalties in connection with breaches of remedies), so that penalties can be imposed in relation to undertakings accepted and orders imposed for the purpose of an implementation trial, as will be the case in relation to other types of order and undertaking under Part 4.
	Paragraph 9 of Schedule 9 makes amendments to new section 167B of the Enterprise Act 2002 (inserted by paragraph 16 of Schedule 11 of this Act - Civil penalties in connection with breaches of remedies), so that the penalty amount payable by reference to a daily rate ceases to accumulate at the beginning of the day on which the undertakings accepted and orders imposed for the purpose of an implementation trial are complied with, as will be the case in relation to other types of order and undertaking under Part 4.
	Paragraph 10 of Schedule 9 makes amendment to section 169 of the Enterprise Act 2002 so that it requires a relevant authority 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) sets out a list of "relevant decisions". Paragraph 10 amends the list so this includes decisions to impose implementation trial measures, and decisions to vary or replace existing remedies.
	Paragraph 11 of Schedule 9 amends section 172 of the Enterprise Act 2002 which sets out specific decisions which the CMA is required to publish. Subsection 172(2) is amended to include a decision under section 138A(A1)(b) that the CMA considers it is not reasonably practicable to separate the element of the remedy package undergoing an implementation trial from an element of the remedy package that is not undergoing an implementation trial, but might be influenced by the results of that implementation trial and so the time for complying with the section 138(2) duty is extended to the end of the implementation trial.
	Subsection (2) of section 138 gives the Secretary of State a delegated power, by regulations, to amend (a) specified sectoral legislation, and (b) section 168 of the Enterprise Act 2002 in connection with the provision made by Schedule 8 to this Act, that is the ability to undertake trials of different packages of market investigation remedies.
	Where a market investigation takes place in a regulated sector, to ensure there is no conflict between the regime in Part 4 of the Enterprise Act 2002 and for instance, regulatory licensing schemes, the existing legislative framework makes provision so that the CMA, or Secretary of State (as the case may be), are given powers to modify regulatory conditions directly, or to request that relevant regulatory authority does so. These powers sit within the sectoral enactments.
	Where the CMA and Secretary of State have powers to take action directly, section 168 Enterprise Act 2002 makes provision so that, when taking such action, they are required to have regard to the functions of the regulatory authority which would ordinarily be responsible for such actions.
	Without amendment of the sectoral enactments, the CMA or Secretary of State may be unable to take action to trial different regulatory conditions when undertaking implementation trials. Should the sectoral enactments be amended to give this power to the CMA and Secretary of State, section 168 Enterprise Act 2002 would also require amendment to ensure that they were required to take relevant regulatory functions into account appropriately. Subsection (2) provides the power for the Secretary of State, by regulation, to make these amendments.
	Subsection (3) provides examples of the types of provision which the power may be used to make in the specified sectoral enactments.
	Subsection (4) limits the power in subsection (2) so that where it is used to amend a sectoral enactment listed in section 168 of the Enterprise Act 2002, it may only make provision in connection with a relevant action mentioned in section 168(3) Enterprise Act 2002. This means that, in relation to those enactments, the power can only be exercised to allow the CMA or Secretary of State to take the same types of action during an implementation trial as they can already take when settling a final remedy package following a market investigation.
	Subsection (5) lists the relevant sector legislation that may be amended using the power at subsection (2).
	Subsection (6) imposes a requirement that the relevant regulators must be consulted before the Secretary of State makes regulations to amend the sectoral legislation. If section 168 Enterprise Act 2002 is amended, such sectoral authorities as the Secretary of State considers are likely to have an interest in the amendment must be consulted.
	Subsection (7) lists the relevant sectoral authorities for the purposes of the consultation requirements.
	Subsection (8) provides a power for the Secretary of State, by regulations, to add or remove an enactment in scope of the power at subsection (2) and to amend subsection (7) so as to add, amend or vary an entry.
	Subsection (9) is self-explanatory.