Following hard on the heels of its victory in the Competition Appeal Tribunal (CAT) in August last year (see September e-bulletin), Attheraces, the internet and TV betting company, has chalked up another competition law win, this time in the High Court.
This time around Attheraces was seeking to persuade the court to grant it an injunction preventing the British Horseracing Board (BHB) from terminating its supply of pre-race data. Without this valuable data, used to identify runners and riders at British racecourses, Attheraces' horseracing gambling service would have been severely disrupted. BHB had threatened to cancel its agreement with Attheraces for supply of the data unless it increased its payments to BHB.
Attheraces raised proceedings in the High Court alleging that the threatened termination of the agreement amounted to abuse by BHB of its dominant position in respect of the supply of pre-race data.
In giving judgement in favour of Attheraces, Etherton J held:
- BHB were dominant in the market for supply of UK pre-race data, a fact confirmed by the application of the SSNIP test (the court had been presented with economic evidence from expert economists acting for each party).
- BHB had abused its dominance by threatening to terminate the supply of data to Attheraces (an existing customer) in circumstances where, without the data, it would be eliminated from the market and there was no objective justification to do so.
- The prices proposed by BHB for supply of the data were excessive in relation to the economic value of the data, measured as the cost to BHB of producing its database together with a reasonable return on that cost. The judge dismissed BHB's contention that the higher prices were justified either on the ground of taking into account the cost of the positive “externality” of British racing, or on the basis that the prices were a justifiable form of "Ramsey pricing".
- The prices were also unfairly discriminatory, in that they were substantially in excess of BHB’s normal charge for broadcasters, and also because they differed from, and would have had more onerous consequences than, BHB’s pricing mechanism for one of Atthereaces' direct competitors, in both cases for no justifiable reason.
This decision is something of a landmark in so far as it represents one of the very few cases in which a UK court (as opposed to the CAT) has been called upon to analyse the detailed economic and factual issues which typically feature in competition law proceedings. Etherton J's ruling, which runs to over 60 pages, demonstrates that, when required, our civil courts are prepared to grapple with these difficult issues. As such, it represents something of an encouraging development for those businesses with competition claims who may be considering civil litigation as an alternative to OFT proceedings.