305.This section concerns the Treasury’s powers to take action following an adverse report from the Commission.
306.If the Commission’s report is that the significantly adverse effect on competition is not justified, subsection (2) requires the Treasury, unless exceptional circumstances exist, to direct the Authority to take appropriate action.  Subsection (4) provides that the Treasury must have regard to the Commission’s conclusion as expressed in its report.  The special circumstances in which the Treasury do not have to direct the Authority to make changes following an adverse Commission report are where:
	the Authority has already taken action, for example through changes to its rules or practices, which means that the Commission’s recommendations are no longer relevant; or
	the Treasury concludes that the existence of exceptional circumstances mean that it would not be appropriate or necessary to direct the Authority to make changes. For example, the Treasury may conclude that there would be a grave risk to the financial system if certain regulating provisions were changed.
307.Subsection (7) provides that the Authority cannot be directed by the Treasury to take any action which it would not have the power to take itself.  If the Commission were to recommend changes which did not, for example, provide an appropriate level of protection for consumers, the Treasury could not direct the Authority to make those changes.
308.If the Commission’s view is that a significantly adverse effect is justified, subsections (5) and (6) allow the Treasury to override that decision and direct the Authority to make changes where there are exceptional circumstances, for example, in order to meet international obligations.
309.Subsections (10), (11) and (12) provide that if the Treasury decide, because of exceptional circumstances, not to take action following a Commission report that a regulating provision or practice has an adverse effect on competition, or decide to take action in the opposite case, they must produce a statement giving their reasons. Any such statement must be made available to the public and must be laid before Parliament.
Commentary on Sections Part X: Rules and Guidance Chapter III: Competition Scrutiny Section 163: Role of the Treasury