Regulation 2 Determination of turnover and daily turnover

(1)

This regulation applies for the purposes of determining the turnover and daily turnover of an undertaking for the purposes of the following sections of the Act—

(a)

section 35B(4) (amount of penalties under section 35A: breaches of commitments, directions and interim measures);

(b)

section 40A(3A) (amount of penalties under section 40ZE: failure to comply with investigative requirements).

(2)

Subject to paragraphs (3) to (6), the turnover of an undertaking is its turnover in—

(a)

the last accounting period to end before the relevant date (its “relevant accounting period”), or

(b)

if the undertaking has no accounting period that ends before the relevant date, the period beginning with the day on which the activities of the undertaking 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 CMA^f1 estimates on the relevant date that the turnover of the undertaking in the accounting period immediately preceding its relevant accounting period (the “preceding accounting period”) was higher than the turnover of the undertaking 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 undertaking in its relevant accounting period are not available to the CMA on the relevant date, the turnover is (subject to paragraph (5)) its turnover in—

(a)

the preceding accounting period, or

(b)

if the undertaking has no preceding accounting period, the period beginning with the day on which the activities of the undertaking 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 undertaking under paragraph (4)(a) or (b) are not available to the CMA on the relevant date, the turnover of the undertaking 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 undertaking 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 undertaking 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 undertaking is a period of more than six months in respect of which accounts are prepared or required to be prepared in relation to the undertaking;

(b)

the “relevant date” means the date on which the provisional penalty notice is issued pursuant to section 112(A1) of the Enterprise Act 2002^f2 where the CMA is minded to impose a penalty under section 35A or 40ZE of the Act^f3;

(c)

the provisions of the Schedule apply in the determination of turnover.

Annotations

Footnotes

f1: Section 59(1) of the Competition Act 1998 defines “the CMA” as the Competition and Markets Authority.
f2: 2002 (c. 40). Section 112(A1) is inserted by paragraph 18 of Schedule 10 to the 2024 Act. Section 112(A1) requires the CMA to issue a provisional penalty notice before a penalty can be imposed under section 35A (per section 35B(6)) or section 40ZE (per section 40ZE(5)) of the Competition Act 1998.
f3: Section 35A is inserted by paragraph 6 of Schedule 11 to the 2024 Act. Section 40ZE is inserted by paragraph 8 of Schedule 10 to the 2024 Act and is further amended by section 121 of that Act.