CMA & Monitoring

Part 4: Independent Advice on and Monitoring of UK Internal Market

General provision about functions under Part 4

Section 30: Functions of the CMA under Part 4: general provisions

• This section defines a regulatory provision for the purposes of the CMA’s UK internal market reporting, advisory, and monitoring functions, to be undertaken by the Office for the Internal Market task groups within the CMA as set out in section 32 and Schedule As well as stating which of these regulatory provisions are within scope. A regulatory provision is defined to cover relevant requirements for trade in goods and services, as well as the recognition of professional qualifications within the UK internal market.
• Regulatory provisions are in scope, under subsection (1) if they meet the conditions in subsections (2) and (4).
• Subsection (2) defines regulatory provisions by reference to the mutual recognition and non- discrimination principles for goods and services, as defined in sections 3, 6 and 17 and for access to professions or professional regulation under section 24(1) or 28.
• Subsection (4) sets out that a regulatory provision applies to one or more of England, Scotland, Wales and Northern Ireland, but does not apply to the whole of the UK. For example, a regulation in Wales that only applies within Wales but not in any other part of the UK would fall within scope.
• Subsections (8) and (9) define “regulatory provision” to include legislation as defined in section 58 covering primary and subordinate legislation, retained EU legislation and provision made under legislation, but not anything to give effect to the Northern Ireland Protocol.
• Subsection (10) states that “the CMA” refers to the Competition and Markets Authority throughout this Part.

Section 31: Objective and general function

• Subsection (2) sets out the CMA’s objective in carrying out its functions under Part 4 as being to support the effective operation of the UK internal market with particular reference to the purposes of Parts 1, 2 and 3.
• Subsection (3) states that the objective includes supporting the operation of the internal market for consumer interests and interests of all parts of the UK. Subsection (4) states that the CMA (acting as the OIM), when carrying out its functions under Part 4, must have regard to the need to act even-handedly in relation to the relevant national authorities, which comprise the UK Government and all devolved administrations.

Section 32: Office for the Internal Market panel and task groups

• This section gives the CMA the power to authorise an OIM task group constituted under Schedule 4 to the Enterprise and Regulatory Reform Act 2013, to carry out anything that has been required or authorised by the CMA. Provisions regarding the OIM panel and task groups can be found in Schedule 3.

 

Reporting, advisory and monitoring functions

Section 33: Monitoring and reporting on the operation of the UK internal market

• This section establishes the wider market and system monitoring that the CMA may undertake in relation to the internal The CMA may undertake reviews of the matters in subsection (1) on an ad hoc basis. These include matters, whether about particular sets of regulations, sectors or regions, that either are relevant to the continuing effectiveness of an integrated internal market or relate to concerns about this effectiveness and extend to the provisions of Parts 1 to 3. The areas this monitoring may consider include but are not limited to cross-border competition, cross-border investment, nature and levels of trade between different parts of the UK and access to goods and services.
• As per subsections (2) and (3), the CMA may undertake pieces of research of its own volition or be requested to do so by other parties, including the UK government, all devolved administrations and legislatures and publish it.
• Subsections (5) to (8) set out the two categories of reporting the CMA must undertake to give shape to ongoing monitoring.
• Firstly, subsection (5) requires an annual health of the market assessment which will set out broad trends and developments in the UK internal market, including levels of integration across different sectors, regions and nations.
• Secondly, subsection (6) requires that at least every five years the CMA will produce a review of the impact of the effectiveness and impact of the measures to protect and manage the internal market as set out in Parts 1 to 3 of the Act. This will be expected to include an assessment of the effectiveness of and levels of familiarity with the mutual recognition and non-discrimination principles, including whether improvements may be necessary. This will also be expected to consider the views of all relevant stakeholders to present an overview of how well the internal market is serving interested parties across the The multi-year report will also review any interaction between the operation of Parts 1 to 3 of the Act and common framework agreements, and the impact of common framework agreements on the operation and development of the internal market in the UK. “Common framework agreements” are defined in section 10.
• The annual and multi-year reports will be published by the CMA and subsection (7) provides that copies will be laid before both Houses of Parliament and all the devolved legislatures.
• Subsection (9) defines a “relevant 12-month period” and a “relevant 5-year period” for the purposes of this section and provides a sign-post to the meaning of “common frameworks agreements” in section 10.

Section 34: Advising etc on proposed regulatory provisions on request

• This section sets out the provision for the CMA to advise on a regulatory proposal prior to it being passed or made in law. If the administration of one part of the UK wishes to do so, it may request non-binding advice from the CMA on an approach to regulation it or any other person proposes to make in the relevant part of the UK.
• Subsection (3) sets out the conditions as to when an authority may make this request. An authority comprises the UK Government, Scottish Government, Welsh Government and Northern Ireland Subsection (5) states that this request can be made solely by the Minister in the UK Government or any devolved administration or jointly by two or more.
• Subsection (4) sets out that the advice or report will examine the potential economic impact of the proposal on the functioning of the UK internal market. This could include the proposal’s economic impact on competition or trade distortions, indirect or cumulative effects or impacts on prices, the quality of goods and services or choice for consumers. Subsection (7) states that the CMA may decline to provide a report but must give reasons for doing so.
• Subsections (8) and (9) state that no more than 15 days after the advice or report is shared with the authority who made the original request, it will be shared with all other national authorities who did not make the request and the CMA must publish the If the request was made by two or more authorities, advice, reasons, or a report must be provided to them simultaneously.
• Subsection (11) defines “relevant part of the UK” for the purpose of this

Section 35: Provision of report on request after regulatory provision is passed or made

• The preceding section sets out the provision for the CMA to advise on a proposed regulatory provision prior to it taking effect. This section details the CMA’s reporting procedure on regulatory provisions which have already been passed or made in law.
• Under subsections (1) to (3), the regulatory provision and the part(s) of the UK to which it applies to must be specified in the request made by the relevant national authority. Any UK Government or devolved Minister, either solely or jointly, can make a request to the CMA about a regulatory provision once it has been passed or The requesting administration must consider whether any other person or body is able to provide an independent report in the first instance before the request to the CMA is made.
• Subsection (5) sets out that if the CMA declines a request to provide a report it must set out its reasons for doing so and publish the notice. Subsection (6) states that joint requests must be provided to all administrations who made the request simultaneously and the CMA must publish the report soon after.
• Subsection (7) defines “relevant part of the UK” for the purpose of this

Section 36: Report on request on provision considered to have detrimental effects

• This section describes the reporting procedure for enacted regulatory provisions which are considered to have detrimental effects on the UK internal market.
• Subsections (1) to (5) set out that the CMA may undertake a report on the economic impact of a regulatory provision which has been passed or made into law, provided it falls within scope of Part 4 and is considered to be having an actual or anticipated detrimental impact on the functioning of the UK internal The CMA may do this only at the request of a Minister in the UK government or any devolved administration, rather than a third party. The requesting administration(s) must first consider whether any other person is able to provide an independent report. Subsection (6) provides that the CMA may decline such requests but must give reasons if it does so and must publish the notice.
• Subsection (7) states that where the CMA does provide a report, it must provide copies to all other administrations in other parts of the UK who did not request the For example, if the Welsh government made the request for a report, then England, Scotland and Northern Ireland administrations would also receive copies of the report.
• Subsections (8) to (10) set out that as soon as practicable after being informed that no further time for consideration by administrations is needed, and no later than 6 months after provision of the report to the UK government and all devolved administrations, the CMA must lay the report before each House of Parliament and all devolved After this the report will be published by the CMA.

Section 37: Statements on reports under section 36

• This section sets out the process the CMA, UK Government and devolved administrations must follow once a report has been produced by the CMA and laid before the legislatures under section 36.
• Subsection (2) requires the national authority responsible for implementing the regulatory measure that was the subject of the CMA’s report to then make a written statement in the relevant For example, if the impacts of a Welsh Government regulation had been

reported on, Welsh Ministers would need to make a written statement in the Senedd Cymru. In the case of Northern Ireland, the First Minster and deputy First Minster must make a joint statement. Subsection (3) defines “Parliament”. In addition the national authority which requested the report must make a written statement to the relevant legislature.

• Subsection (4) sets out that in relation to Westminster this duty is to be fulfilled by laying a copy of a written statement before each House of Parliament.
• Subsections (5) to (9) provide definitions for terms used for the purpose of this

Section 38: Reports under Part 4

• This section allows the CMA to exclude particular categories of information from its reporting on impacts on the internal market. The categories are information the CMA believes it is contrary to the public interest to disclose, commercial information that will significantly harm the business interests of another person, or information about the private affairs of another

Section 39: General advice and information with regard to exercise of functions

• This section sets out that the CMA must publish guidance about how it expects to approach the exercise of its monitoring, advisory and reporting functions. This advice or information may include factors the CMA may take into account when considering whether to carry out its functions.
• Subsections (3) and (4) state that the CMA may publish revised or new advice or information at any time and that this must be published in such a manner it considers appropriate.

Section 40: Laying of annual documents before devolved legislations

• This section requires the CMA to lay its annual plan, proposals for the annual plan and its annual report on its activities and performance report before both the UK Parliament and devolved legislatures.

Section 41: Information-gathering powers

• This section sets out the powers the CMA will have to gather information in support of its functions in this Part.
• As provided in subsections (2) and (3), the CMA will be able to give an information notice or require the production of a document by an individual, business or public authority. The notice must describe the type of information required, as well as when and how it is expected to be relayed. Under subsection (6) the notice must make clear which precise function of the CMA is relevant as well the legal and financial consequences of non-compliance.

• Subsection (8) sets out that no information can be requested if it cannot be compelled to be given in the course of civil judicial proceedings before the court, and that a notice may not require a person to go more than 10 miles from their residence without having their travelling expenses paid or offered to them.
• Subsection (9) provides a definition of “the court” to include the High Court or Scotland’s Court of Session.

Section 42: Enforcement

• This section establishes what action the CMA is able to take in response to non-compliance with the information requests described in the previous section.
• Subsections (4) and (5) set out the conditions where financial penalties may not be imposed because more than 4 weeks have expired since the CMA exercised its relevant functions.
• Subsection (6) requires the CMA to publish its policy approach in relation to subsequent action should it decide that a request for information has not been adequately fulfilled. Subsection (7) states that this policy approach must make clear what factors the CMA will use to decide the nature and amount of any financial policy imposed. Subsection (8) states that this approach can be revised, and revisions must also be publicised. Subsection (9) requires the CMA to consult each relevant national authority and such other persons as it sees fit in the process of putting together or revising the policy approach.
• The CMA can use its own discretion to decide whether the request for information has been complied with or not, though it must explicitly account for this approach. In making this decision, the CMA may also make reference to any obstruction or delay in the fulfilling of a request to produce documents. If it decides that a person has not fulfilled the request or has obstructed the production of documents, it is able to impose a financial penalty as described under subsection (1).

Section 43: Penalties

• This section sets out how the CMA will decide on appropriate financial penalties in cases of non-compliance with a This provision directly mirrors section 174 of the Enterprise Act 2002, ensuring consistency across the CMA’s functions. The CMA will be able to choose between a range of possible types of penalties and fix appropriate amounts having regard to their statement of policy on penalties and the facts of the case. The CMA will not be able to compel or levy a financial penalty against the UK Government, Scottish Government, Welsh Government or Northern Ireland Executive.
• Subsections (2) to (4) state that the penalty can be a single, fixed amount, a daily rate or In any of these cases, the Secretary of State must specify maximum amounts through secondary legislation not exceeding £30,000 for a fixed amount and £15,000 for the daily rate. As stated in subsection (8), the Secretary of State must consult the CMA, each other relevant national authority and any other relevant persons before deciding on the maximum amounts and daily rates.

• Subsections (9) and (10) state that the calculation of the daily rate must not include any days before the CMA served a penalty notice concerning failure to provide information on the person in The penalty stops accumulating on the day that the requirements under the information request are satisfied or the day the CMA has concluded the exercise of the relevant function. The CMA can specify an earlier date for the rate to stop accumulating should it wish, whether before or after the penalty imposed.
• Subsection (11) applies provisions in sections 112 to 115 of the Enterprise Act 2002, which set out procedural requirements and provide for appeals to the Competition Appeal Tribunal should a person wish to appeal a penalty decision made by the CMA to decisions of the CMA under section 42.

Section 44: Duty to review arrangements for carrying out Part 4 functions

• Subsection (1) requires the Secretary of State to carry out a review of and report on the provision made to achieve the most effective and efficient performance of the Part 4 functions and to lay a copy of the report before Parliament and the devolved legislatures. Under subsection (2) the review must assess the way that Part 4 functions have been carried out by the CMA through OIM task groups and any advantages or disadvantages of continuing with the arrangements in comparison with other approaches including possible arrangements not involving the Subsection (6) provides that the review period would begin on the third anniversary of section 32 coming into force and end with the fifth anniversary. While carrying out this review, subsections (3) to (5) require that the Secretary of State consults with the other relevant national authorities including on the draft report, and considers their representations on it.

Section 45: Interpretation of Part 4

• This section sets out key definitions for the purpose of this Part. This includes a definition of the CMA itself and clarity about how broadly the “operation of the internal market in the UK” should be understood. This includes specific areas or regions within the internal market, not just cross-cutting trends across the market as a whole.
• Subsections (4) to (6) provide definitions of “regulatory provision”, “relevant legislative competence” and “relevant national authority”. The latter covers the UK Government and the three devolved administrations: the Scottish Government, Welsh Government and Northern Ireland Executive.