British Telecommunications PLC v Office of Communications (Ethernet Determinations)
The Competition Appeal Tribunal (“CAT”) has held that BT should pay interest on sums that it over-charged rival communications providers. BT’s sales of wholesale Ethernet services, used to provide broadband services to consumers, are regulated by Ofcom given BT’s significant market power. Among other things, BT’s charges for these services must be reasonably derived from their costs of provision. In 2012, Ofcom found that Sky, TalkTalk, Virgin and a number of other companies had been overcharged by BT to the tune of almost £100m over a period of several years ending in 2011. However, Ofcom declined to award any interest on the overcharged amounts. In its judgment, the CAT held that in the absence of interest BT has a weaker incentive to comply with its regulatory obligations. BT is now far more likely to be required to pay interest on any excessive charges identified in future disputes.
Meredith Pickford and Julian Gregory acted for Sky and TalkTalk.
To view the judgment, please click here.