National Grid Plc v Gas and Electricity Markets Authority

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.