December 26, 2023

Competition Appeal Tribunal dismisses Motorola’s challenge of recent competition decision

On December 21, 2023, the UK Competition Appeal Tribunal (“CAT”) unanimously dismissed an application by Airwave Solutions Limited (“ASL”) , Motorola Solutions UK Limited and Motorola Solutions, Inc. (together “Motorola”) seeking, among other things, that the Tribunal grant an order to quash the decision set out in the Competition and Markets Authority’s Final Report on “Mobile radio network services” dated April 5, 2023.  The decision concerns the supply of communications network services that ASL, a Motorola subsidiary, provided to emergency personnel over the “Airwave Network.”  The CMA determined that there were “features of the relevant market that caused an ‘adverse effect on competition’ (‘AEC’) within the meaning of Section 134 of the Enterprise Act 2002.”  As a result, the CMA imposed a charge control remedy that would reduce the price that the Government paid for ASL’s services that was significantly lower than the contractually agreed upon price, an amount equivalent to £200 million per year.

Motorola challenged the CMA’s decision on two grounds.  In Ground 1, Motorola claimed that the CMA erred in finding the existence of an AEC and failed to consider competitive constraints when it conducted its competitive assessment.  In Ground 2, Motorola argued that CMA’s profitability analysis, which formed the basis of its conclusions regarding the existence of an AEC and its proposed remedy, was unlawful.  The Tribunal disagreed with Motorola and found the Ground 1 challenge to be “fundamentally flawed” and based on a market definition that was not supported by a full and proper reading of the CMA’s decision.  The Tribunal held that the CMA had not failed to take into account a relevant consideration and found no inconsistency between the CMA’s findings related to market definition and those made in its competitive assessment.  With regards to Ground 2, the Tribunal found that the CMA was entitled to a degree of latitude in the way it chose to conduct its profitability assessment and that there was no inconsistency in its approach.  As a result, the Tribunal dismissed both grounds of review.

CAT Judgment Summary | Judgment