Judgment of the Tribunal in relation to an appeal brought by TalkTalk Telecom Group plc (“TalkTalk”) and Vodafone Limited (“Vodafone”) (together “the Appellants”).
The appeal is against three decisions by the Office of Communications (“Ofcom”) set out in its statement of 28 June 2019 entitled “Promoting competition and investment in fibre networks: review of the physical infrastructure and business connectivity markets” (“the 2019 Statement”).
This judgment concerns one of the three decisions namely the decision that British Telecommunications plc (“BT”) does not have significant market power (“SMP”) in the market for “contemporary interface access” (“CI Access”) in the “Central London Area” (“CLA”) geographic market (“Decision 1”).
In relation to Decision 1, the Appellants argued that:
- Ofcom adopted an erroneous approach, and/or its analysis by which it reached its SMP finding was legally inadequate. In particular:
- Ofcom failed to pay proper regard to the presumption of dominance which applied in circumstances where BT’s market share was in excess of 50%. Ofcom did not identify the existence of “exceptional circumstances” to justify failing to apply the presumption.
- Ofcom relied inappropriately on a “relative” approach, reasoning that BT did not have SMP in the CLA because network infrastructure was denser in the CLA than in the other geographic markets for CI Access. Ofcom thus failed properly to focus on the legally relevant question, which was whether the presumption was displaced by reason of persuasive evidence that BT would in fact be adequately constrained by competition over the Relevant Period.
- Ofcom failed to give adequate reasons for its SMP Finding. Its “relative” approach was not a legally sound or sufficient reason; and its reasoning was not sufficient to explain the basis on which the presumption of dominance was displaced.
- Further and in any event, the SMP Finding was wrong and/or not one that was properly open to Ofcom on the basis of the available evidence. On the basis of a proper and diligent consideration of the relevant market circumstances, the only correct conclusion was that BT had SMP in the CLA Market.
For the reasons given in the judgment, the Tribunal unanimously dismissed the appeal in relation to Decision 1.
