Clause 75 - Market power determinations
Communications Bill
6:15 pm
Mr Andrew Lansley (South Cambridgeshire, Conservative)
There is a risk of anticipating later clauses, but as it is a general question about how the significant market power conditions will work, it might be better to raise it now. The Minister may recall that one of the objectives of the scrutiny Committee was to align the process of market analysis and market power determination in the Bill more accurately with those in the directive. In their response, the Government did that for some of the later clauses more accurately in relation to things such as the periodic nature of reviews.
One of the things that they have not done—I suspect that that is because of the different structures
of the legislation and the directive—is to reflect the precise process by which the directive sees SMP conditions being arrived at. If I render it correctly, the commission defines the market and sets guidelines; Ofcom conducts an analysis; and it then decides whether or not a market is effectively competitive. If the market is not effectively competitive, Ofcom then goes on to identify the person or persons who have significant market power and to whom conditions might be applied.
The Government, in what appears a straightforward way—it seems to be almost a simplification—have cut out the middle bit and are going straight from determining the market power to identifying those with significant market power and applying the conditions to those. Logically, the absence of anyone with significant market power implies that the market is effectively competitive. That is how I understand the structure, but the process of determining whether the market is effectively competitive has a benefit in relation to the directive.
Article 16(3) provides that when the regulatory authority concludes that a market is effectively competitive, it not only means that that national regulatory authority cannot then apply significant market power conditions, but that:
''In cases where sector specific regulatory obligations already exist, it shall withdraw such obligations placed on undertakings in that relevant market''.
£That is apposite to the initial market analysis rather than the review, and I do not find that provision in the legislation. I cannot find the process that says that we should determine whether the market is effectively competitive and, if it is, that we should remove all those obligations.
In a nutshell, and having bored the Committee about how I arrived at it, my question is where is the provision in the Bill that provides that having established that a market is effectively competitive and that there is no case for applying SMP conditions, it is also an obligation on Ofcom to remove sector-specific obligations that may have pre-existed in relation to undertakings in that market. I cannot find it.