Court of Appeal holds that CAT has no power to order Ofcom retrospectively to revise its price controls

29/04/10

The Court of Appeal (Lloyd, Moore-Bick and Richards LJJ) has handed down the latest judgment in the mobile call termination litigation, overturning the decision of the Competition Appeal Tribunal ("CAT") on the scope of the CAT's power to order Ofcom to revise price controls in relation to past years.

Ofcom imposed price controls on all five mobile network operators in relation to charges imposed for mobile call termination. The charge controls ran from the period 1 April 2007 to 31 March 2011. BT appealed that decision to the CAT, which referred specified price control matters to the Competition Commission. The Commission decided that the price controls had been set at too high a level and the CAT then ordered Ofcom to revise the price controls for the entire period of their application (i.e. from 1 April 2007), notwithstanding that the CAT's judgment was not delivered until 2 April 2009.

The CAT's decision was appealed by Telefónica O2, Orange, Vodafone and T-Mobile. The appeals were supported by Ofcom but opposed by BT. The Court of Appeal held that the CAT had no power to direct Ofcom to impose revised price controls on a retrospective basis in relation to a period that had already elapsed when the revisions came into effect. Section 195 of the Communications Act 2003 only gives the CAT power to direct Ofcom to take action that Ofcom would itself have power to take and section 45(10)(e) of the Communications Act only permits Ofcom to modify conditions with prospective effect. The Court of Appeal accordingly allowed the appeal.

The judgment is here.