Complaint from TalkTalk Telecom Group plc against BT Group plc about alleged margin squeeze in superfast broadband pricing

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Complainant: TalkTalk Telecom Group plc (‘TTG’)
Complaint against: BT Group plc (‘BT’)
Case opened: 1 May 2013
Case closed: 21October 2014
Issue: Alleged margin squeeze in superfast broadband pricing
Relevant instrument: Chapter II of the Competition Act 1998 (‘the Act’) and Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’) (abuse of a dominant position).

Update note: 22 October 2014

Ofcom has today published a non-confidential version of its final No Grounds for Action decision in this case. Please see related item.

End of update note

Update note: 21 October 2014

Ofcom has investigated TalkTalk’s complaint under the Competition Act 1998, and has decided there are no grounds for action.  A non-confidential version of the decision will be published shortly.

Update note: 19 June 2014

Ofcom has investigated TalkTalk’s complaint under the Competition Act 1998, and has provisionally decided there are no grounds for action. This investigation is separate from the new rules we are proposing for BT under the European telecoms framework today. BT, TalkTalk and third parties whom Ofcom has accepted as having an interest in the investigation will be invited to make written representations on Ofcom's provisional decision.

End of update note.

Ofcom has received a complaint from TTG alleging that BT has been abusing a dominant position in breach of the Chapter II prohibition in the Act and Article 102 TFEU in relation to the supply of superfast broadband (‘SFBB’). Specifically, TTG alleges that BT has failed to maintain a sufficient margin between its upstream costs and downstream prices, thereby operating an abusive margin squeeze.

As set out in section 25 of the Act, Ofcom may conduct an investigation where there are reasonable grounds for suspecting that the Chapter II prohibition and/or the prohibition in Article 102 TFEU has been infringed. In addition to the Chapter II prohibition in the Act, Ofcom has the power to apply Article 102 TFEU in full.

Ofcom has now opened an investigation under section 25 of the Act into the matters raised by TTG’s complaint and will consider whether BT has abused a dominant position under UK and/or EU competition law.

In the initial phase of the investigation in Spring/Summer 2013, we expect to gather further information using our powers under the Competition Act 1998, and to analyse this information. We expect this initial analysis to inform consideration of whether and how to proceed further with the investigation, during Autumn/Winter 2013. We would aim to provide an updated indicative timetable when we have concluded the initial phase described here.

Case Leader: Francesco Savino (e-mail: francesco.savino@ofcom.org.uk)
Case Reference: CW/01103/03/13