Judgment (Dominance and other issues)

Neutral citation:

[2006] CAT 36

Published:

18 Dec 2006

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Summary:

Judgment of the Tribunal concluding that Dŵr Cymru had a dominant position on the relevant market (the transportation and partial treatment via a particular pipeline of water abstracted from a particular abstraction facility on the River Dee for supply to two industrial plants) for the purposes of the Chapter II prohibition.

In making this finding the Tribunal considered: Dŵr Cymru’s market share of 100 per cent throughout the period considered by the decision; the fact that there are substantial barriers to entry in the relevant market; the lack of any potential competition which could act as an effective restraint on the price Dŵr Cymru proposed to charge to Albion. These factors pointed overwhelmingly to the existence of a dominant position. The Tribunal therefore set aside those aspects of the Director’s original decision which had reached a contrary view of dominance.

With regard to other matters: (i) the Tribunal decided to remit certain matters to the Water Services Regulation Authority for further investigation before reaching its own decision on the question of whether Dŵr Cymru had abused its dominant position by charging Albion Water an excessive access price; (ii) the Tribunal concluded that the Director’s decision must be set aside insofar as it related to the issue of a margin squeeze. The Tribunal concluded that it was clear on the evidence that neither Albion Water nor any other reasonably efficient operator could earn a normal return whilst paying the access price being charged by Dŵr Cymru.

In considering a submission that it had no jurisdiction to maintain an existing order for interim relief in respect of the bulk supply price paid by Albion Water to Dŵr Cymru (which was not the subject of the Director’s decision but which the Tribunal observed raised substantially the same issues as the access price) the Tribunal noted that the interim order had been made under the Tribunal’s self-standing power under Rule 61 of the Tribunal’s Rules and its maintenance was both urgent and necessary to protect the public interest by preserving the possibility of competitive supplies of water.

This is an unofficial summary prepared by the Registry of the Competition Appeal Tribunal.