A recent appeal by the UK's mobile telephone operator, Everything Everywhere, to the UK's Court of Appeal may lead to a change to the Competition Commission's (CC) investigation powers in deciding telecoms price control matters in the future.
CC investigation powers in telecoms price control
On 6 June 2012, the Competition Appeal Tribunal (CAT) granted Everything Everywhere permission to appeal against an earlier CAT judgment on the following question:
Is the CC obliged, when determining telecoms price control matters
referred to it by the CAT, to decide those matters in accordance
with the evidence before it, without any additional
investigation?
According to the CAT, the answer to this question ought to be
"yes," because the CC would be acting as an
administrative appeal body when deciding price control references,
which it must decide on the basis of the evidence before it
exclusively.
On 20 June, Everything Everywhere appealed the CAT judgment on
this point to the Court of Appeal and contested that the CC ought
to have obtained additional evidence to decide a price control
reference made to it by the CAT, but failed to do so despite the
fact that that evidence was obtainable.
Background
The UK's Communications Act (the Act) gives the UK's
telecoms regulator, Ofcom, the power to impose various kinds of
specific condition on communications providers, including
conditions on operators that Ofcom has determined to have
significant market power, so-called "SMP conditions,"
including price controls.
The Act provides that such price controls can be challenged on
appeal to the CAT, but requires the CAT to refer any price control
matter to the CC. The CC must then determine the reference
made by the CAT, using such procedures as the CC considers
appropriate. The CAT is bound to follow the CC's
determination, unless the CC's decision would fall to be set
aside on judicial review grounds that it is either irrational or
disproportionate.
So far, the CC has dealt with five telecoms price control appeals,
including cases regarding price controls for leased lines (Cable
& Wireless), wholesale line rentals (The Carphone Warehouse
Group I), metallic path facilities (The Carphone Warehouse Group
II), and two cases on mobile termination charges (Hutchison 3G UK
Limited / British Telecommunications plc). But the
jurisdiction of the CC in deciding such matters has never been
challenged before.
Conclusion
This appeal raises a point of general public importance on which
there is no Court of Appeal authority and that is fundamental to
the proper conduct by the CC of price control appeals. We
wait with interest to see if this leads to a narrowing or widening
of the CC's powers in this respect.
This appeal will have an immediate effect on more than just
Everything Everywhere. There are three price control appeals
currently pending before the CAT and more are likely to arise in
the future pursuant to the recent entry into force of certain
EU-driven legislative amendments to the UK Communications
Act.
In addition, this appeal comes on the heels of sweeping changes to
the CC's procedures for deciding price control matters which
were announced earlier this year to cope with the foreseen increase
in these price control appeals (see our Antitrust Alert,
UK Competition Commission to Reform Telecoms Price Control
Appeals).
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