Factual and Procedural Background
In September 2014, Company A Limited ("Company A") entered administration following decisions by three major mobile network operators ("MNOs") not to renew contracts supplying connections through it. Company A commenced a claim in December 2018 alleging a collusive anticompetitive scheme involving the three MNOs and their parent companies during 2012 to 2014. The claim included damages for infringement of Article 101(1) of the Treaty on the Functioning of the European Union ("TFEU") and/or breach of section 2 of the Competition Act 1998, as well as contractual claims and a common law conspiracy claim.
A split trial was ordered, with the first trial addressing liability issues heard over 11 weeks before Judge Smith, concluding in July 2022. The judge dismissed the claims in a judgment issued in November 2023 and refused permission to appeal in January 2024. On renewed application, permission to appeal was granted on six of eight grounds, all challenging the finding of no liability for breach of competition law. The appeal was ultimately dismissed.
Company A was the principal trading entity of its group with over 700 retail outlets and around 5,600 employees, controlled by a private equity firm and burdened by significant debt by 2013. The three MNOs involved are referred to as Respondents One, Four, and Six, with their respective parent companies as Respondents Two, Three, Five, Seven, and Eight. During the relevant period, indirect retailers held a substantial UK market share, with Company A and its rival Company B being the most significant indirect retailers.
Company A had supply agreements with each MNO, which were terminated or not renewed between October 2012 and September 2014. The core allegations concerned collusion among the MNOs to cease supplies to Company A, including specific meetings and communications among senior executives of the MNOs and their parents.
Legal Issues Presented
- Whether there was concertation between the MNOs amounting to a concerted practice under Article 101(1) TFEU and section 2 of the Competition Act 1998.
- Whether the judge erred in applying the Anic presumption regarding the causal link between concertation and market conduct.
- Whether the judge impermissibly rejected the appellant's case on factual grounds not canvassed at trial.
- Whether the delay in delivering judgment justified a different standard of appellate review of factual findings.
- Whether the judge adopted a compartmentalised approach to evidence, failing to consider it in the round.
- Whether the judge erred in his approach to adverse inferences from a respondent's failure to preserve documents.
Arguments of the Parties
The opinion contains detailed accounts of the parties' submissions and evidence but does not provide a succinct summary of the parties' arguments in a format suitable for this section.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Case T-342/18 Nichicon v Commission [2021] 5 CMLR 19 ("Nichicon GC") |
Defines criteria for concerted practice and the importance of reducing uncertainty in market conduct. |
The court applied Nichicon GC to explain the elements of concerted practice and the need for concertation, subsequent conduct, and causal link. |
| Argos Ltd v Office of Fair Trading [2006] EWCA Civ 1318 ("Argos") |
Essential propositions on concerted practices including unilateral disclosures and the need for consensus. |
Used to analyze whether passive acceptance of disclosed information can amount to concertation. |
| Joined Cases T-202/98, T-204/98 and T-207/98 Tate & Lyle v Commission [2001] 5 CMLR 22 ("Tate & Lyle") |
Concerted practice includes forms of collusion distinguishable from agreements by intensity and manifestation. |
Referenced regarding unilateral disclosure and consensus requirements. |
| Case C-49/92P Commission v Anic [2001] 4 CMLR 17 |
Establishes the Anic presumption that participants in concertation take account of exchanged information when determining market conduct. |
The court discussed the scope and rebuttal of the Anic presumption extensively. |
| Case C-204/00 P Aalborg Portland A/S v Commission [2005] 4 CMLR 4 ("Aalborg Portland") |
Presumption of participation in cartel meetings unless public distancing or reporting to authorities. |
Distinguished from the Anic presumption; relevant to discussions on public distancing. |
| Case C-74/14 Eturas UAB v Lietuvos Respublikos konkurencijos taryba [2016] 4 CMLR 19 ("Eturas") |
Clarifies tacit approval in concerted practices and the role of public distancing in rebutting presumptions. |
Applied to explain consensus and rebuttal of presumptions in the context of the case. |
| Al-Medenni v Mars UK Ltd [2005] EWCA Civ 1041 |
Limits on judges advancing new factual theories not pleaded or canvassed by parties. |
Applied to assess whether the judge impermissibly relied on a new factual theory not raised at trial. |
| Satyam Enterprises Ltd v Burton [2021] EWCA Civ 287 |
Judges must decide cases on issues raised by parties; impermissible to decide on unpleaded bases. |
Reinforced the principle that judges cannot decide on unraised theories. |
| NatWest Markets Plc v Bilta (UK) Ltd [2021] EWCA Civ 680 ("NatWest v Bilta") |
Standard of appellate review of factual findings, especially with delayed judgments and compartmentalisation issues. |
Guided the approach to reviewing delayed judgments and assessing whether findings are safe. |
| Efobi v Royal Mail Group Ltd [2021] UKSC 33 |
Use of common sense in drawing adverse inferences from absence of witnesses or documents. |
Applied in considering adverse inferences from document preservation failures. |
| Shagang Shipping Co Ltd v HNA Group Co Ltd [2020] UKSC 34 |
Assessment of inferences requires consideration of alternative plausible explanations. |
Referenced in rejecting inferences of collusion where alternative explanations existed. |
| Bank St Petersburg PJSC v Arkhangelsky [2020] EWCA Civ 408 |
Impact of delayed judgments on appellate review and compartmentalisation of evidence. |
Used to evaluate effect of 15-month delay on safety of trial judge’s findings. |
| Bond v Dunster Properties [2011] EWCA Civ 455 |
Additional appellate test for delayed judgments regarding judge’s recollection and addressing material evidence. |
Applied to assess the impact of delay on the reliability of factual findings. |
| Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 ("Fage v Chobani") |
Warning against "island hopping" in appellate review, emphasizing holistic consideration of evidence. |
Referenced in cautioning against selective appellate challenges in complex cases. |
| Malhotra v Dhawan [1997] 8 Med LR 319 |
Limits on adverse inferences from destroyed evidence and requirement for consistency with other evidence. |
Considered in assessing adverse inference from document loss by a respondent. |
| Kanaya Dansingani v Canara Bank [2021] EWCA Civ 714 |
Emphasizes the principle that justice delayed is justice denied and impact of delays on confidence in justice system. |
Referenced in closing remarks on the importance of timely judgments. |
Court's Reasoning and Analysis
The court undertook a detailed legal and factual analysis of the allegations of collusion between the MNOs and their parent companies, focusing on the elements of concerted practice under Article 101(1) TFEU and the Competition Act 1998. The court applied established case law, including the Anic presumption, which presumes that undertakings participating in concerted arrangements and remaining active on the market take account of exchanged information unless rebutted.
Regarding the alleged "Landmark lunch" meeting between senior executives of two MNOs, the court found that although one party made vague references to unilateral steps and playing "big cards" to reduce reliance on indirect retailers, the other party's passive response did not amount to concertation or consensus. The judge concluded that the information was too vague to reduce uncertainty or benefit the recipient in a way that would restrict competition. The court upheld this finding, emphasizing that passivity alone does not necessarily constitute tacit approval or consensus without the appropriate context.
The court rejected the appellant's argument that the Anic presumption could only be rebutted by public distancing or reporting to competition authorities, holding that the presumption can be rebutted by other evidence demonstrating no causal effect on market conduct. The court distinguished between the Anic presumption and the participation presumption applicable to attendance at anticompetitive meetings without objection.
The judge's rejection of a new factual theory concerning the source of confidential information about an impending exit from Company A by one MNO was found to be permissible, as the theory was not pleaded or canvassed at trial and did not cause prejudice to the appellant. The court emphasized the adversarial nature of proceedings and the need for issues to be clearly identified and addressed by the parties.
The court applied a heightened standard of appellate review due to the 15-month delay in delivering judgment, carefully considering whether the judge was plainly wrong or had failed to address material evidence. It found no such errors. The court rejected claims that the judge compartmentalized evidence unfairly, observing that the judgment was comprehensive and the judge had cross-referenced related findings appropriately.
Regarding allegations of collusion between other MNOs and their parent companies, the court accepted the judge's findings that no sufficient evidence supported these claims, including the absence of reciprocal exchanges or commitments and the presence of alternative, plausible commercial explanations for the conduct.
The court also considered the failure of one respondent to preserve documents appropriately. Applying the principles from Efobi and related case law, it held that the judge was entitled to find no deliberate destruction and that no adverse inference was warranted given the totality of the evidence and witness testimony.
Overall, the court concluded that the judge applied the correct legal principles, made reasoned factual findings supported by the evidence, and that the judgment was safe despite the delay.
Holding and Implications
DISMISSED
The court dismissed the appeal, upholding the trial judge's dismissal of the claims of collusion and breach of competition law against the respondents. The direct effect is that the respondents are not liable for the alleged infringements under Article 101(1) TFEU or section 2 of the Competition Act 1998. No new precedent was set by this decision, and the judgment reinforces established principles regarding the elements of concerted practice, the application and rebuttal of the Anic presumption, and the standards for appellate review of delayed judgments.