Enterprise Act 2002 Explanatory Notes

Section 132: Ministerial power to make references

306.Under FTA 1973, the Secretary of State (acting alone or jointly with other Ministers) and the DGFT each have independent powers to make monopoly references. Certain sectoral regulators have concurrent powers of reference with the DGFT conferred by the relevant utility statutes in respect of the areas that they regulate. However, the DGFT’s and sectoral regulators’ powers of reference are subject to exclusions in certain sectors (in which references may only be made by Ministers) and a limited power of veto on the part of the Secretary of State. Under the market investigations regime, there will be no such limitations on the OFT’s power of reference, and the Secretary of State (acting alone or jointly with other Ministers of the Crown (subsection (5)) retains the ability to make market investigation references only as a reserve power.

307.Subsections (1)-(3) set out the circumstances in which this reserve Ministerial power of reference may be used. Like the OFT and sectoral regulators (section 130), Ministers must have reasonable grounds for suspecting that a feature or combination of features of a market are preventing, restricting or distorting competition in the supply of specified goods or services before they can make a reference (subsection (3)). However, Ministers must additionally either be dissatisfied with the OFT’s decision not to make a reference (subsection (1)); or they must be satisfied that the OFT is aware of whatever evidence has led them to form a suspicion and is not likely to reach a decision as to whether or not to make a reference within a reasonable period of time (subsections (2) and (3)).

308.Subsection (5) provides that references may be made by more than one Minister of the Crown acting jointly, so long as the Secretary of State is one of the Ministers making the reference.

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