CAT’s judgment on emergency services network hits the airwaves

09/01/24

The Competition Appeal Tribunal (CAT) has dismissed a claim for judicial review by Airwave Solutions Ltd (Airwave), a subsidiary of Motorola Solutions, Inc, against the Competition and Markets Authority’s (CMA’s) Final Report on Mobile radio network services.

The proceedings follow a market investigation reference made by the CMA in relation to the market for the supply of communications network services for the emergency services. 

These services are currently supplied using the Airwave network, which was set up following a tender process in 2000.  A further tender process for a replacement for the Airwave network, known as ESN, took place in 2014-5, with the aim that ESN would replace the Airwave network in 2020.  In fact, the development of ESN has taken much longer than anticipated and it is now not expected to be in use for some years.  In the meantime, Airwave has continued to provide the relevant services using the Airwave network. 

The CMA found in its Decision that features of the market were enabling Airwave to make supernormal profits in respect of the Airwave Network.

The claimants challenged two aspects of the Decision.

First, it was argued that the CMA had failed to take proper account of the competitive constraint imposed by the ESN on the prices that Airwave could charge for the Airwave network.  The CAT found that this ground of challenge was not supported by a full and proper reading of the Decision.

Second, the applicants contended that the CMA relied on an unlawful profitability analysis in reaching its conclusions.  Rejecting this ground of challenge, the CAT found that the CMA was entitled to a degree of latitude in how it approached its profitability assessment, and had not adopted an irrational or inconsistent approach.

The judgment is here.