London’s High Court yesterday struck out a claim launched by Packet Media (“PM”) and lifted an injunction imposed on UK mobile provider, O2, in an alleged abuse of dominance case.
The background to this case is that PM provides services involving the sale / leasing of GSM Gateway equipment and resells air time. A GSM Gateway allows lower cost calls or SMS messages from a fixed phone line to a mobile phone number. As part of the service, PM re-sells airtime on O2’s network to its customers by providing SIM cards from two of O2's official authorised re-sellers.
On 5th June 2015, O2 informed PM (on seven days’ notice) that it would suspend services to certain “disputed” SIM cards that were using SIM Gateways on the O2 network.
In July 2015, Packet Media filed a claim against Telefonica / O2 in respect of O2’s alleged abuse of a dominant position in the provision of:
- the market for termination of mobile telephone calls on the O2 network and
- the market for termination of SMS messages on the O2 network.
The relevant “abuses” cited by PM were, broadly, refusal to supply and the imposition of unfair trading conditions without objective justification.
In an interim application published in August 2015, the High Court granted interim relief to PM: O2 was required to continue services to the disputed SIMs and Gateways, pending the outcome of the litigation.
Yesterday, the Court ruled on O2’s earlier application to have the injunction lifted, on the basis that PM had no realistic prospect of success on the abuse of dominant position: O2 considered that it was not dominant.
The Court sided with O2 and discharged the injunction and struck out the claim.
Two points to note:
- Despite the increase in competition-related litigation in the UK Courts, dominance cases remain difficult to prove in a stand-alone context, particularly when seeking to base a claim on potentially narrow markets; and
- That said, the High Court is willing to consider, even in cases where dominance is not obvious, the granting of interim relief in the context of commercially important refusal to supply / access cases.
The case will have implications beyond the telecommunications sector and is relevant to any supplier of access or essential goods / services and their customers.