The Water Mergers (Modification of Enactments) Regulations 2004
| Year | 2004 |
2004No. 3202
WATER INDUSTRY, ENGLAND AND WALES
The Water Mergers (Modification of Enactments) Regulations 2004
2ndDecember2004
7thDecember2004
29thDecember2004
The Secretary of State, in exercise of her powers under paragraphs 1 and 2 of Schedule 4ZA to, and section 213(2)(f) of, the Water Industry Act 1991( 1), hereby makes the following Regulations:
Citation, commencement and interpretation
1. - (1) These Regulations may be cited as the Water Mergers (Modification of Enactments) Regulations 2004 and shall come into force on 29th December 2004.
(2) In these Regulations -
"the 1991 Act" means the Water Industry Act 1991; and
"the 2002 Act" means the Enterprise Act 2002( 2).
Modification of Part 3 of the 2002 Act
2. In its application in relation to water mergers and merger references under section 32 of the 1991 Act, Part 3 of the 2002 Act has effect with the modifications prescribed in these Regulations.
Omitted provisions
3. - (1) Part 3 of the 2002 Act has effect as if the following provisions were omitted -
(a) section 28 (turnover test);(b) sections 34A and 34B (cases referred by the European Commission);(c) Chapter 2, section 85 and Schedule 7 (public interest cases);(d) sections 59 to 68 (other special cases);(e) sections 73 to 75 (undertakings in lieu of references, etc);(f) sections 96 to 102 (merger notices); and(g) section 123 (power to alter share of supply test).(2) Accordingly, any reference in Part 3 of the 2002 Act to those provisions (and any provisions of that Part so far as applying to them) shall be disregarded.
Sections 22 to 24: References in relation to completed mergers
4. Part 3 of the 2002 Act has effect as if, for sections 22 to 24, there were substituted -
"22References in relation to completed water mergers - (1) A reference under section 32(b) of the 1991 Act shall specify -
(a) the enactment under which it is made; and(b) the date on which it is made.(2) In this Part "the decision-making authority" means the OFT or (as the case may be) the Commission.
23Water mergers - (1) For the purposes of this Chapter and Chapter 3 of Part 2 of the 1991 Act, the question whether a water merger has taken place shall be determined as at -
(a) in the case of a reference which is treated as having been made under section 32(b) of the 1991 Act by virtue of section 37(2), such time as the Commission may determine; and(b) in any other case, immediately before the time when the reference has been, or is to be, made.(2) In this Part -
(a) "water merger" means a merger of any two or more water enterprises;(b) "water enterprise" means an enterprise carried on by a water undertaker or sewerage undertaker; and(c) a reference to a merger of any two or more water enterprises is a reference to those enterprises ceasing to be distinct enterprises24Time-limits for enforcement action - (1) No enforcement action shall be taken on a merger reference under section 32(b) of the 1991 Act in respect of an actual merger unless the reference was made within the period of four months beginning with whichever is the later of -
(a) the day on which the merger took place; and(b) the day on which the material facts about the transactions which resulted in the merger first came to the attention of the OFT or were made public.(2) In this section "made public" means so publicised as to be generally known or readily ascertainable.".
Section 25: Extension of time-limits
5. Section 25 (extension of time-limits) has effect as if -
(a) in subsections (1), (2) and (9), for "section 24(1)(a) or (2)(b)" there were substituted "section 24(1)";(b) subsections (4) to (8), (10) and (11) were omitted; and(c) in subsection (9), the words "Subject to subsections (10) and (11)," were omitted.Section 30: Relevant customer benefits
6. Part 3 of the 2002 Act has effect as if, for section 30 (relevant customer benefits), there were substituted -
"30Relevant customer benefits in relation to water mergers - (1) For the purposes of this Part a benefit is a relevant customer benefit if -
(a) it is a benefit to relevant customers in the form of - (i) lower prices, higher quality or greater choice of goods or services in any market in the United Kingdom (whether or not the market or markets in relation to which the prejudice to the Authority has, or may have, occurred or (as the case may be) may occur); or(ii) greater innovation in relation to such goods or services; and(b) the Commission believes - (i) in the case of a merger reference under section 32(a) of the 1991 Act, as mentioned in subsection (2); and(ii) in the case of a merger reference under section 32(b) of the 1991 Act, as mentioned in subsection (3).(2) The belief, in the case of a merger reference under section 32(a) of the 1991 Act, is that -
(a) the benefit may be expected to accrue within a reasonable period as a result of the merger concerned; and(b) the benefit is unlikely to accrue without the merger concerned or a similar prejudice to the Authority.(3) The belief, in the case of a merger reference under section 32(b) of the 1991 Act, is that -
(a) the benefit has accrued as a result of the merger concerned or may be expected to accrue within a reasonable period as a result of the merger concerned; and(b) the benefit was, or is, unlikely to accrue without the merger concerned or a similar prejudice to the Authority.(4) In subsection (1) "relevant customers" means -
(a) customers of any person carrying on an enterprise which, in the merger concerned, has ceased to be, or (as the case may be) will cease to be, a distinct enterprise;(b) customers of such customers; and(c) any other customers in a chain of customers beginning with the customers mentioned in paragraph (a);and in this subsection "customers" includes future customers.
(5) For the purposes of subsection (1) "market in the United Kingdom" includes -
(a) so far as it operates in the United Kingdom or a part of the United Kingdom, any market which operates there and in another country or territory or in a part of another country or territory; and(b) any market which operates only in a part of the United Kingdom;and references to a market for goods or services include references to a market for goods and services.".
Section 31: Information powers in relation to completed mergers
7. Section 31 (information powers in relation to completed mergers) has effect as if, in subsection (1), for "to make a reference under section 22" there were substituted "it has a duty to make a reference under section 32(b) of the 1991 Act".
Section 32: Supplementary provision for purposes of sections 25 and 31
8. Section 32 (supplementary provision for purposes of sections 25 and 31) has effect as if -
(a) in subsection (2), paragraphs (c) and (d) were omitted; and(b) in subsection (4), the words "or (5)(b)" were omitted.Section 33: Duty to make references in relation to anticipated mergers
9. Part 3 of the 2002 Act has effect as if, for section 33 (duty to make references in relation to anticipated mergers), there were substituted -
"33References in relation to anticipated water mergers A reference under section 32(a) of the 1991 Act shall specify -
(a) the enactment under which it is made; and(b) the date on which it is made.".Section 34: Supplementary provision in relation to anticipated mergers
10. - (1) Section 34 (supplementary provision in relation to anticipated mergers) has effect as if, in subsection (1)(a), for the words from "this Part" to "contemplation" there were substituted "section 32(a) of the 1991 Act".
(2) The Enterprise Act 2002 (Anticipated Mergers) Order 2003( 3) shall have effect, for the purposes of references under section 32(a) of the 1991 Act, as if it had been made under section 34 of the 2002 Act as modified by paragraph (1) and as if -
(a) in article 2, for the definition of "reference" there were substituted -" "reference" means a reference under section 32(a) of the Water Industry Act 1991;";and
(b) in article 4, for "36(2)(a) and (b)" there were substituted "36(4)(a) and (b)".Sections 35 to 36: Questions to be decided in relation to mergers
11. Part 3 of the 2002 Act has effect as if, for sections 35 and 36, there were substituted -
"35Questions to be decided in relation to completed water mergers - (1) Subject to section 127(3), the first questions to be decided by the Commission on a merger reference under section 32(b) of the 1991 Act shall be -
(a) whether a water merger has taken place; and(b) if so, whether that merger has prejudiced, or may be expected to prejudice, the ability of the Authority, in carrying out its functions by virtue of the 1991 Act, to make comparisons between different water enterprises.(2) Any decision of the Commission on a merger reference under section 32(b) of the 1991 Act that a water merger has taken place shall be treated as a decision that no water merger has taken place if the decision is not that of at least two-thirds of the members of the group constituted in connection with the reference in pursuance of paragraph 15 of Schedule 7 to the 1998 Act.
(3) Any decision of the Commission on a merger reference under section 32(b) of the 1991 Act that a water merger has prejudiced, or may be expected to prejudice, the ability of the Authority, in carrying out its functions by virtue of the 1991 Act, to make comparisons between different water enterprises shall be treated as a decision that the water merger has not prejudiced, or may be expected not to prejudice, that ability of the Authority if the decision is not that of at least two-thirds of the members of the group constituted in connection with the reference in pursuance of paragraph 15 of Schedule 7 to the 1998 Act.
(4) For the purposes of this Part there is a prejudicial outcome if -
(a) a water merger has taken place and that...To continue reading
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