volume discount scheme for IPStream and DataStream
Complainants: Energis, Tiscali and Your Communications
Complaint against: BT
Case opened: 22 July 2003
Alleged abuse of a dominant position by BT regarding its
volume discounts for IPStream and DataStream.
Relevant instrument: Chapter II of the Competition Act
1998 (abuse of a dominant position)
received a complaint from Energis, Tiscali and Your Communications
about BT's volume discounts for IPStream and DataStream. The
volume discount scheme applies to IPStream and DataStream rental
charges on the basis of predetermined spending commitments by
customers. IPStream and DataStream volume discounts can be combined.
Customers receive the benefits of the discount in advance when
they commit to an annual expenditure, and the discount can be
clawed back, with interest, if the customer fails to meet its
expenditure target. The discount scheme is structured in 'steps',
with the percentage discount increasing from 1% to 1.5% and
2% for higher levels of expenditure.
It has been
alleged that by implementing the volume discount scheme for
IPStream and DataStream, BT is abusing its dominant position
in the markets for the provision of wholesale bitstream services
to ISPs and large businesses and corporate customers.
it is alleged that the volume discounts do not reflect genuine
cost savings to BT, but are designed to force customers to place
their business with BT. Moreover, it is alleged that the structure
of the volume discount scheme will encourage customers to purchase
the IPStream service rather than the DataStream service. For
example, all the customer's expenditure in relation to the IPStream
service will accrue towards the expenditure target, in contrast
to DataStream, where expenditure on service elements, other
than the End User Data Path charge, will not quality towards
the expenditure target.
investigating these allegations under the Competition Act.
Leader: Ruth Gibson (020 7634 8976 e-mail:
Case Reference: CW/00657/07/03