National Grid Plc v Gas and Electricity Markets Authority
Apr 09
[2009] CAT 14
The Competition Appeal Tribunal has upheld the decision of the Gas and Electricity Markets Authority that National Grid Plc abused its dominant position by entering into abusive long-term contracts for the provision of domestic gas meters. The Tribunal has fixed the penalty on National Grid at £30 million.
The Tribunal’s judgment gives important guidance in, among others, the following areas:
- Market definition. In particular, the Tribunal confirms that only in rare circumstances is it necessary to adjust for distortions in the marketplace by considering an ‘imaginary’ market.
- Dominance. In particular, the Tribunal holds that an undertaking may be dominant even if a regulatory price cap prevents it from maintaining prices above the competitive level.
- Normal competition. The Tribunal confirms that even if a particular form of contract is in principle consistent with normal competition, that does not mean the use of such a contract is always normal and therefore not abusive.
- The use of “counterfactuals” in competition cases. The Tribunal holds that, in order to be a helpful tool in competition analysis, it is not necessary for a counterfactual to reflect what would or should have happened had there been no abuse.
Monica Carss-Frisk QC, Brian Kennelly and Tristan Jones appeared for the Gas and Electricity Markets Authority.