Interim injunction lifted in relation to an alleged abuse of dominance

Lucy Davies

In July we reported that in Packet Media Ltd v Telefónica UK Ltd, the High Court had granted an interim injunction in relation to a claim which alleged abuse of a dominant position by Telefónica, contrary to the UK’s competition rules.   This injunction has now been lifted.

The interim injunction prevented Telefónica UK (operating under brand O2) from discontinuing service to SIM cards used by Packet Media Ltd in its GSM gateway devices – cost-saving equipment which diverts landline-to-mobile calls through a gateway installed with SIM cards, meaning that diverted calls are registered as mobile-to-mobile calls, which are generally cheaper.

Packet Media had claimed, amongst other things, that discontinuing service to the SIM cards would be an abuse of dominance by Telefónica.  In its defence Telefónica argued that it did not have a dominant position in the alleged market, and that in any event it was objectively justified in disconnecting the SIM cards in question in order to protect its network capacity and integrity.  The court granted an interim injunction, pending trial, on the basis that it was the course of action least likely to cause prejudice.  This took account of the fact that the claimant claimed that if the SIM cards were to be disconnected it would suffer loss which could not be easily compensated in damages.  For more information see our earlier post Interim injunction granted in relation to an alleged abuse of dominance”.

On 14 December, following a petition by Telefónica, the High Court lifted the interim injunction on the basis that Packet Media had not shown that there was an arguable case for abuse of dominance in the affected market.  Packet Media immediately sought permission to appeal this ruling, a request which was denied by the High Court.  However, the High Court did agree to stay the lifting of the injunction for 14 days to allow Packet Media to seek permission to appeal directly from the Court of Appeal.  This period will also allow Packet Media’s customers to make alternative service provider arrangements.

Packet Media Ltd v Telefónica UK Ltd (Case HC-2015-002463, unreported, 14 December 2015)

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