The Competition Appeal Tribunal on 27 January 2020 handed down judgment dismissing an appeal brought by Virgin Media against a decision by Ofcom that it had breached the General Conditions of Entitlement (GCs) and should pay a fine of £7 million.
Ofcom decided that Virgin Media had breached GC 9.3 and GC 9.2(j), principally by charging customers who terminated contracts inside the minimum commitment period more than it had promised it would in its terms and conditions. Ofcom found that Virgin Media’s practice was liable to deter switching and imposed a fine of £7m. Virgin Media appealed to the CAT under s. 192 of the Communications Act 2003 on the basis that Ofcom’s interpretation and application of GC 9.3 was wrong in law and the penalty decision was inadequately reasoned and disproportionate.
The Tribunal held that there had been no error of law, and that Ofcom’s decision on the penalty was adequately reasoned and proportionate. In particular, Ofcom was under no obligation to adopt a “staged” approach to imposing penalties (e.g. by identifying a starting point and then adjusting for mitigating and aggravating factors); it was lawful for it to set penalties “in the round”. The judgment is one of the first to apply s. 194A of the Communications Act 2003, which provides that in appeals under s. 192 the Tribunal should apply the same principles as would be applied by a court in judicial review. The Tribunal stated that the appellant had to establish that Ofcom got something material wrong and that it was appropriate to afford proper respect to Ofcom as a specialist regulator.
The decision can be found here.
Javan Herberg QC and Tom Coates acted for Ofcom.