The court considered the applicability of Article 81 in Chapter 1 of Part III of the EC Treaty to allegedly anti-competitive conduct in the market for the wholesale supply of airtime for mobile telephones. Unipart, an independent service provider (‘ISP’) purchased airtime from Cellnet, a mobile network operator under various agreements which provided that the price would be at Cellnet’s charges from time to time. There were also a number of service providers, competing with Unipart, that were tied to Cellnet (tied service providers or ‘TSPs’). Unipart claimed that Cellnet was in breach of Article [101] by operating a margin squeeze whereby the price for airtime that Unipart (and other ISPs) were charged relative to the retail price charged to the TSPs was such as to eliminate its margin and thus place the TSPs at a competitive advantage.
Held: The judge’s grant of summary judgment in favour of Cellnet was correct in finding that even if there was such a margin squeeze, this was not the subject of any relevant agreement between the undertakings within the meaning of Article [101(1)].
Jonathan Parker LJ referred to the ADALAT case and said: ‘Approaching Article [101(1)] on that basis, the first step, in my judgment, is to identify as precisely as possible the conduct of which complaint is made: that is to say the conduct which is alleged to have caused the loss in respect of which damages are claimed. For in my judgment it is that conduct which must be the subject of an agreement between undertakings if Article [101(1)] is to be engaged in respect of it.
In my judgment it is clear on the face of the Particulars of Claim . . that the conduct of which complaint is made in the instant case is not that Cellnet set its own prices for airtime (most suppliers set the prices for their products); nor is it merely that Cellnet set its prices at a level which was excessively high (a supplier who does that risks going out of business as a result). The anti-competitive conduct which is alleged in the instant case is that Cellnet set its prices at an excessively high level as part of its policy of ‘margin squeeze’ – a policy which is described in detail in paragraphs 14 and 15 of the Particulars of Claim. . : hence the allegation of ‘unlawful margin squeeze’ in paragraph 36 of the Particulars of Claim . . Take away that allegation, and in my judgment there is nothing left of Unipart’s complaint.
Accordingly, given that Unipart does not seek to invoke Article [102], the relevant inquiry, in my judgment, is whether Cellnet’s conduct in adopting a policy of ‘margin squeeze’ (assuming for present purposes that it in fact adopted such a policy) was the subject of an ‘agreement’ between Cellnet and Unipart; or whether it was ‘unilateral’ conduct on Cellnet’s part and thus outside the scope of Article [101(1)]. To put it another way, the issue is whether Unipart can establish to the requisite legal standard a concurrence of wills between it and Cellnet concerning Cellnet’s adoption of the policy of ‘margin squeeze’ (see paragraph 77 of the CFI’s judgment in Bayer. . ).’
Jonathan Parker LJ, Peter Gibson LJ and Laddie J
[2004] EWCA Civ 1034, [2004] UKCLR 1453
Bailii
EC Treaty A81
England and Wales
Cited by:
Cited – Sel-Imperial Ltd v The British Standards Institution ChD 23-Apr-2010
The defendant had developed a draft standard for automotive body repairs. It included a requirement that any replacement parts must be either the manufacturer’s own or certified under a recognised conformity certification scheme. The claimant . .
Lists of cited by and citing cases may be incomplete.
European, Commercial
Updated: 10 November 2021; Ref: scu.199631