Clause 71 - Order-making power where undertakings under section 69 not fulfilled etc.
Enterprise Bill
10:45 am
Mr Douglas Alexander (Minister of State (E-Commerce and Competitiveness), Department of Trade and Industry; Paisley South, Labour)
Given that this morning is the first time that I have addressed the Committee, I shall leave aside the contentious subject of history or old ground and start with the amendment's intention.
As I understand it, the amendment would limit the OFT's power to make an order in cases where it has become apparent that the parties concerned are not complying with an undertaking in lieu or have provided materially false or misleading information to the OFT before the undertaking was accepted. From the terms of the amendment and the remarks of the hon. Member for Eastbourne (Mr. Waterson), I understand that the particular purpose is to prevent the OFT replacing a behavioural undertaking in lieu with a divestment order.
Any order made under the clause may be different from the undertakings that it replaces. That is the same degree of flexibility that is available to the Secretary of State under the Fair Trading Act 1973. The hon. Gentleman's comments reflected the fact that it is necessary to allow the OFT to impose a different remedy if that is warranted, for example, by a different analysis that emerges after false or misleading information comes to light. However, on the substantive point of seriousness or harshness, as the hon. Gentleman described it, I remind the Committee that the OFT will be required to act in a
reasonable manner in replacing an undertaking with an order. Therefore, any new remedy will have to be justified in the circumstances of the case. If the OFT did not act reasonably, the parties would, of course, have recourse to an appeal to the competition appeal tribunal.
I further remind hon. Members that enforcement actions are very rarely necessary in respect of undertakings given by parties at any stage.