BT Group: potential anti-competitive exclusionary behaviour

No. 12/07/2004

The Office of Communications (Ofcom) has concluded that BT Group plc (BT) has not infringed Section 18 (the Chapter II prohibition) of the Competition Act 1998 (the Act) or Article 82 of the EC Treaty (Article 82) in relation to revised terms and pricing, announced by BT on 24 March 2004, of its BT Together Options 1, 2 and 3 residential retail services. Ofcom has decided that the conditions for prohibition are not met and therefore has no grounds for action.

Ofcom's decision follows an investigation opened in response to representations from a number of competing Carrier Pre-Selection (CPS) providers that BT's revised pricing of its Together Options packages, together with the withdrawal of BT's standard line rental offering, was likely to result in the exclusion of competitors from relevant markets in the provision of calls to end users.

Ofcom opened its investigation on 31 March 2004 and announced that, in addition to the full investigation, Ofcom was considering whether it might be appropriate to apply interim measures under s35 of the Act. On 13 May 2004 Ofcom announced that it did not intend to impose interim measures.

Ofcom's investigation has considered a range of behaviour that CPS providers believed might amount to an abuse of a dominant position by BT and a breach of the Chapter II prohibition or Article 82. These behaviours consisted of margin squeeze, the bundling of line rental with calls discounts, BT engaging in a deliberate strategy to target and undermine its competitors' business, and predatory pricing in order to drive competitors out of the market.

Following investigation of these issues, Ofcom has considered the available evidence and concluded that BT has not infringed the Chapter II prohibition or Article 82.

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