Complaint from Designbyte Ltd re BT's free provision of BT Analyst

26 October 2004

Complainant: Designbyte Ltd
Complaint against: BT
Case opened: 5 December 2003
Case closed: 26 October 2004
Issue: Alleged abuse of a dominant position by BT regarding the free provision of BT Analyst software to its corporate customers
Relevant instrument: Chapter II of the Competition Act 1998 (abuse of a dominant position) and Article 82 of the EC Treaty

Ofcom closed this case on 26 October 2004 by issuing a 'no grounds for action' decision. A non-confidential version of the decision has been prepared and is available at the link below

Case Leader: Tanya Rofani (e-mail: Tanya.Rofani@ofcom.org.uk)
Case Reference: CW/00718/11/03

Text published when the case was opened

Complainant: Designbyte Ltd
Complaint against: BT
Case opened: 5 December 2003
Issue: Alleged abuse of a dominant position by BT regarding the free provision of BT Analyst software to its corporate customers
Relevant instrument: Chapter II of the Competition Act 1998 (abuse of a dominant position)

Update note - 4 May 2004

The Competition Act 1998 has been amended as of 1 May 2004 in order to implement EC Regulation 1/2003 (the "Modernisation Regulation") into UK law. Ofcom now has the power under the Act to apply Article 81 and Article 82 of the EC Treaty in full, in addition to the Chapter I and Chapter II prohibitions.

As of 1 May 2004, Ofcom is conducting this investigation under Article 82 of the EC Treaty, in addition to under the Chapter II prohibition.

End of update note

Designbyte designs, develops and distributes telephone call analysis solutions, and provides a web-based outsource service for corporate users wishing to analyse their telephony costs and usage.

BT supplies BT Analyst, a desktop bill analysis software package, to use with BT's Onebill service. BT's Onebill service consolidates a business customer's separate bills for individual BT services into one invoice.

Designbyte has alleged that BT, by offering BT Analyst free of charge to corporate customers, may be cross-subsidising relevant software operations. Designbyte alleges that this has the effect of foreclosing the market to competitors supplying only the telephone analysis software.

In Oftel's Final Statement on the SMP conditions in the market review on `Fixed Narrowband Retail Services Markets' published on 28 th November 2003 (see http://www.ofcom.org.uk/legacy_regulators/oftel/narrowband_mkt_rvw/fixednarrowbandrsm.pdf ) Oftel determined that BT is dominant in the retail markets for various business telephony calls.

Ofcom considers that since BT offers its corporate customers BT Analyst as part of BT's Onebill service for telephony calls, BT may be bundling a service that is possible to be supplied separately and competitively. Therefore, Ofcom is currently of the view that the alleged infringement under Chapter II can be appropriately analysed as a price bundling abuse, and will examine whether such abuse would have the effect of excluding competitors from the relevant market.

Case Leader: Tanya Rofani (e-mail: Tanya.Rofani@ofcom.org.uk
Case Reference: CW/00718/11/03