Judgment in three appeals against Ofcom’s determination that BT overcharged for Ethernet services by £95 million between 2005/06 – 2010/11 was handed down by the Competition Appeal Tribunal on 1 August 2014.
The judgment approved the approach adopted by Ofcom to determine the extent of overcharge in breach of a cost orientation condition. BT’s argument that whether services were cost oriented ought to be assessed in aggregate, rather than by way of assessment of the individual charge (which would have reduced the level by which BT had overcharged), was rejected. Sky and TalkTalk’s appeal on the basis that a different measure of cost ought to have been adopted by Ofcom, which would have increased the level of overcharge, was also rejected.
The judgment considers the scope of Ofcom’s dispute resolution powers following a finding of overcharge and Ofcom’s jurisdiction to award interest on the amount of any overcharge required to be repaid. Cable & Wireless, Virgin Media and Verizon successfully argued that Ofcom should award interest on their overcharges and were supported by Ofcom in their argument that the regulator had jurisdiction to do so.
The judgment approved Ofcom’s approach to assessing whether any adjustment should be made to BT’s Regulated Financial Statements for the purpose of resolving a dispute.
The Competition Appeal Tribunal also commented on the extent to which it may be appropriate to set aside a determination by Ofcom on the basis of fresh evidence, even in circumstances in which that fresh evidence has been admitted by the Tribunal. The Tribunal clarified that will “depend in part on the specific nature of the evidence, and such factors as whether it could have reasonably been adduced during the investigative stage, and whether the Tribunal is in a position properly to ascertain to what extent it is correct or whether it might require remittal of the case to Ofcom”.
The full judgment can be read here: http://www.catribunal.org.uk/238/Judgments.html
Ofcom was represented by Pushpinder Saini QC, Kate Gallafent QC, Hanif Mussa and Emily Neill.
Cable and Wireless, Virgin Media Limited and Verizon UK Limited were represented by Dinah Rose QC and Tristan Jones.