Complaint against BT about the pricing of cordless fixed-line telephones

07 August 2006

Complainant: Binatone Telecom plc and a co-complainant who wishes to remain anonymous.
Investigation against: BT
Case opened: 26 April 2005
Case closed: 1 August 2006
Issues: It was alleged that BT's pricing of various models of its branded cordless telephones was below cost.
Relevant instrument: Chapter II of the Competition Act 1998 (abuse of a dominant position) and Article 82 of the EC Treaty (Article 82)

Update note – 7 August 2006

A non-confidential version of the decision has been prepared and is available at the link below.

End of update note

Ofcom has concluded that BT has not infringed the Chapter II prohibition or Article 82 in relation to its pricing of cordless telephones for the period from April 2004 to March 2005.

Ofcom has concluded that BT is not dominant in the relevant market for fixed lined telephones in the UK due to a number of factors set out in the decision.

Furthermore, from a detailed examination of BT's prices and costs Ofcom has concluded that, even if BT had been found to be dominant, its pricing behaviour would not have constituted predatory pricing.

Therefore Ofcom has decided to dismiss the complaint.

A non-confidential version of the decision is currently being prepared and will be published shortly..

Case Leader: Tanya Rofani (020 7783 4342 e-mail: Tanya.Rofani@ofcom.org.uk )
Case Reference: CW/00828/03/05

Text published when the case was opened

Complaint against BT about the pricing of cordless fixed-line telephones

Complainant: The complainants wish to remain anonymous
Complaint against: British Telecommunications plc (BT)
Case opened: 26 April 2005
Issue: It is alleged that BT is pricing various models of its branded cordless telephones below cost.
Relevant instrument: Chapter II of the Competition Act 1998 (abuse of a dominant position) and Article 82 of the EC Treaty

Ofcom has received a complaint that BT has infringed Chapter II of the Competition Act 1998 (the Act) and/or Article 82 of the EC Treaty (Article 82) in its conduct in setting a price for various models of its branded cordless telephones. The complainants have provided information which they claim indicates that BT branded telephones have a major share of the retail market for cordless telephones in the UK (which they assert provides evidence of BT's dominance in the relevant market). In addition, the complainants have provided information which they argue suggests that BT may be pricing below cost in the wholesale provision of cordless telephones in the UK.

As set out in section 25 of the Act, Ofcom may conduct an investigation if it has reasonable grounds for suspecting that the Chapter II prohibition has been infringed. In addition to the Chapter II prohibition, Ofcom also has the power to apply Article 82 of the EC Treaty in full.

Ofcom has now opened an investigation into the allegations made and will consider whether or not BT has infringed Chapter II of the Act and/or Article 82).


Case Leader: Tanya Rofani (020 7783 4342 e-mail: Tanya.Rofani@ofcom.org.uk )
Case Reference: CW/00828/03/05