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Complaint from TalkTalk Telecom Group plc against BT Group plc about alleged margin squeeze in superfast broadband pricing

CW/01103/03/13

Complainant: TalkTalk Telecom Group plc (‘TTG’)
Complaint against: BT Group plc (‘BT’)
Case opened: 1 May 2013
Issue: Alleged margin squeeze in superfast broadband  pricing
Relevant instrument: Chapter II of the Competition Act 1998 (‘the Act’) and Article 102 of the Treaty on the Functioning of the European Union (‘TFEU’) (abuse of a dominant position).

Ofcom has received a complaint from TTG alleging that BT has been abusing a dominant position in breach of the Chapter II prohibition in the Act and Article 102 TFEU in relation to the supply of superfast broadband (‘SFBB’). Specifically, TTG alleges that BT has failed to maintain a sufficient margin between its upstream costs and downstream prices, thereby operating an abusive margin squeeze.

As set out in section 25 of the Act, Ofcom may conduct an investigation where there are reasonable grounds for suspecting that the Chapter II prohibition and/or the prohibition in Article 102 TFEU has been infringed. In addition to the Chapter II prohibition in the Act, Ofcom has the power to apply Article 102 TFEU in full.

Ofcom has now opened an investigation under section 25 of the Act into the matters raised by TTG’s complaint and will consider whether BT has abused a dominant position under UK and/or EU competition law.

In the initial phase of the investigation in Spring/Summer 2013, we expect to gather further information using our powers under the Competition Act 1998, and to analyse this information.  We expect this initial analysis to inform consideration of whether and how to proceed further with the investigation, during Autumn/Winter 2013. We would aim to provide an updated indicative timetable when we have concluded the initial phase described here. 

Case Leader: Tarnya Wilkins ( e-mail: tarnya.wilkins@ofcom.org.uk)
Case Reference: CW/001103/03/13

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