COMPETITION Citation, commencement, extent and interpretation 1 1 These Regulations may be cited as the Enterprise Act 2002 (Mergers and Market Investigations) (Determination of Control and Turnover for Penalties) Regulations 2024 and come into force on 1st January 2025. 2 These Regulations extend to England and Wales, Scotland and Northern Ireland. 3 In these Regulations— a “ the Act ” means the Enterprise Act 2002; b “ provisional penalty notice ” means a provisional penalty notice issued pursuant to section 112(A1) of the Act where the appropriate authority issuing it is minded to impose a penalty under section 94AA, 110, 167A or 174A of the Act ; c “ relevant authority ” means the appropriate authority issuing a provisional penalty notice. Control of an enterprise 2 1 This regulation applies for the purposes of determining when an enterprise is to be treated as controlled by a person for the purposes of the following sections of the Act— a section 94AB(3) and (4) (amount of penalties under section 94AA: enforcement of undertakings and orders); b section 111(4) and (4A) (amount of penalties under section 110: enforcement of powers under section 109) ; c section 167B(3) and (4) (amount of penalties under section 167A: enforcement of undertakings and orders: imposition of penalties); d section 174D(4) and (4A) (amount of penalties under section 174A: enforcement of powers under section 174: attendance of witnesses and production of documents etc.) . 2 An enterprise is to be treated as controlled by a person (“ P ”) where— a the enterprise is carried on by P otherwise than in partnership or as a member of an unincorporated association or body, b the enterprise is carried on by a body corporate in which P has a controlling interest, c the enterprise is carried on by a body corporate, and P is able directly or indirectly to control, or materially influence, the policy of that body corporate without having a controlling interest in that body corporate, d the enterprise is carried on by a partnership or by an unincorporated association or body, and P (whether or not P is a member of that partnership, association or body) is able directly or indirectly to control, or materially influence, the policy of that partnership, association or body in carrying on the enterprise, or e the enterprise is carried on by an individual, and P is able directly or indirectly to control, or materially influence, the policy of that individual in carrying on the enterprise. 3 For the purposes of paragraph (2)(b), P has a controlling interest in a body corporate if P— a is a parent undertaking of that body corporate within the meaning of section 1162 of the Companies Act 2006 (parent and subsidiary undertakings) , or b would be a parent undertaking of that body corporate within the meaning of that section if P were an undertaking within the meaning of section 1161 of that Act (meaning of “ undertaking ” and related expressions), and the reference in paragraph (2)(c) to P not having a controlling interest is to be construed accordingly. 4 For the purposes of paragraph (3), subsections (2)(c) and (4)(a) of section 1162 of the Companies Act 2006 are to be disregarded. 5 For the purposes of paragraph (2)(c), (d) and (e) the relevant authority may determine whether any person is able to control directly or indirectly, or materially influence, the policy of a body corporate, or the policy of a partnership, an unincorporated association or body, or an individual (as the case may be) in carrying on an enterprise. 6 References in this regulation to a body corporate include a body incorporated outside the United Kingdom; and references to a partnership or an unincorporated association or body include a partnership or unincorporated association or body formed or established, or having any members incorporated, formed or established, outside the United Kingdom. Determination of turnover and daily turnover 3 1 This regulation applies for the purposes of determining the turnover and daily turnover of an enterprise for the purposes of the following sections of the Act— a section 94AB(4) (amount of penalties under section 94AA: enforcement of undertakings and orders); b section 111(4A) (amount of penalties under section 110: enforcement of powers under section 109); c section 167B(4) (amount of penalties under section 167A: enforcement of undertakings and orders: imposition of penalties); d section 174D(4A) (amount of penalties under section 174A: enforcement of powers under section 174: attendance of witnesses and production of documents etc.). 2 Subject to paragraphs (3) to (6), the turnover of an enterprise is its turnover in— a the last accounting period to end before the relevant date (its “relevant accounting period”), or b if the enterprise has no accounting period that ends before the relevant date, the period beginning with the day on which the enterprise began to be carried on and ending with the last day of the month preceding the month in which the relevant date falls. 3 If the relevant authority estimates on the relevant date that the turnover of the enterprise in the accounting period immediately preceding its relevant accounting period (the “preceding accounting period”) was higher than the turnover of the enterprise in its relevant accounting period, the turnover is its turnover in the preceding accounting period. 4 If the figures necessary to calculate turnover of the enterprise in its relevant accounting period are not available to the relevant authority on the relevant date, the turnover is (subject to paragraph (5)) its turnover in— a the preceding accounting period, or b if the enterprise has no preceding accounting period, the period beginning with the day on which the enterprise began to be carried on and ending with the day immediately preceding the date on which its relevant accounting period began. 5 If the figures necessary to calculate the turnover of the enterprise under paragraph (4)(a) or (b) are not available to the relevant authority on the relevant date, the turnover of the enterprise is its turnover in the period beginning with the day after the last day of its relevant accounting period and ending with the last day of the month preceding the month in which the relevant date falls. 6 Where the period by reference to which turnover is calculated does not equal 12 months, the turnover of the enterprise is the turnover in that period divided by the number of days in that period and multiplied by 365 or, if the period includes 29th February, 366. 7 The daily turnover of the enterprise is the turnover divided by 365 or, if the period by reference to which turnover is calculated includes 29th February, 366. 8 For the purposes of this regulation— a an “accounting period” of an enterprise is a period of more than six months in respect of which accounts are prepared or required to be prepared in relation to the enterprise; b the “ relevant date ” means the date on which the provisional penalty notice is issued; c the provisions of the Schedule apply in the determination of turnover. Justin Madders Parliamentary Under Secretary of State Department for Business and Trade 25th November 2024