CMA wins appeal in emergency services case
The Court of Appeal has refused Motorola permission to appeal the CMA바카라 사이트™s findings that it was making supernormal profits from providing communications network services to the UK emergency services.
Today the Court of Appeal (CoA) has unanimously dismissed Motorola바카라 사이트™s application for permission to appeal on both of its pleaded grounds, in which it claimed that the Competition and Markets Authority (CMA) had made errors in assessing competition in the relevant market and the profitability of the Airwave Network in 2021.Â
In its original findings, the CMA said that Motorola was able to make supernormal profits because it has a virtually unconstrained monopoly in the market to supply communications network services to the UK바카라 사이트™s emergency services. The CMA imposed a charge control order capping the price Motorola could charge.
Motorola challenged the CMA바카라 사이트™s original findings in the Competition Appeal Tribunal (CAT). The CAT unanimously dismissed that challenge and Motorola sought permission to appeal to the CoA. In a judgment handed down today, the Court endorsed the CMA바카라 사이트™s reasoning as set out in its original findings. Â
The CMA바카라 사이트™s price cap ensures that the UK바카라 사이트™s emergency services pay a fair price for Airwave바카라 사이트™s services, reducing the price by almost £200 million per year.
Today바카라 사이트™s decision by the CoA brings this case to a close, as Motorola cannot appeal the decision further.
George Lusty, Executive Director of Consumer Protection and Markets, at the CMA, said:
The CMA바카라 사이트™s investigations and legal decisions are carefully considered and evidence-led and we welcome today바카라 사이트™s decision by the Court of Appeal which endorses our reasoning in this case. Â
Our investigation showed that Motorola had been charging emergency services in the UK £200 million a year more than they would if the market was working well. The Court바카라 사이트™s judgment today means that our price cap remains in place, which limits how much Motorola can charge emergency services for using its Airwave Network.
Today바카라 사이트™s decision brings this matter to a close.
For more information, visit the Mobile radio network services inquiry page.Â
Notes to Editors:
- In October 2021, the CMA opened an investigation into mobile radio network services amid concerns that the market might not be working well. The investigation 바카라 사이트“ conducted by an independent panel 바카라 사이트“ confirmed these concerns, finding that UK emergency services had no choice but to continue using Motorola바카라 사이트™s Airwave Network, due to a lack of alternative providers. As such, Motorola was able to earn supernormal profits from the prices it charged the Home Office 바카라 사이트“ which negotiates contracts on behalf of emergency services 바카라 사이트“ resulting in higher costs to the emergency services which are ultimately footed by the taxpayers.
- To reduce these costs, the CMA imposed a charge control order, by way of a price cap, in July 2023, which brought the price down to the level that would be expected in a well-functioning and competitive market 바카라 사이트“ putting an end to the estimated £200 million per year of over-charging.
- While protecting taxpayers, the price cap allows Motorola to continue to invest in the Airwave Network and so ensure that quality and safety are maintained.
- Motorola disagreed with the CMA바카라 사이트™s findings 바카라 사이트“ specifically that the price of the Airwave Network services was not limited by competition and on the level of profit they make from the Airwave Network 바카라 사이트“ and so challenged them at the CAT. Following a hearing in August 2023, the CAT unanimously dismissed both of Motorola바카라 사이트™s grounds of challenge.
- Thereafter, Motorola sought permission to appeal that judgment and today the CoA unanimously dismissed both grounds of Motorola바카라 사이트™s application for permission to appeal the CAT decision, which had upheld the CMA바카라 사이트™s findings.
- Supernormal profits mean profits over and above what would be expected in a well-functioning market. The CMA바카라 사이트™s total estimate of the supernormal profits Motorola will make over the 2020 to 2029 period is £1.27bn. That estimate reflects the net present value of Motorola바카라 사이트™s expected returns at the start of that period. This is equivalent, on an undiscounted basis, to revenues being almost £200m per year above the level that would be required for it and Airwave Solutions to earn a reasonable return.
- For media enquiries, contact the CMA press office on 020 3738 6460 or press@cma.gov.uk.