Should a regulator be able to use emergency powers to circumvent the findings of an appeal court?

Ofocm has today published three documents, as a consequence of the order issued yesterday by the UK Competition Appeals Court (CAT) to quash Ofcom's product and geographic market definitions in the business connectivity market (the leased lines market).

A natural consequence of the market definitions being quashed is that the SMP findings is those markets, and any remedies applied to those markets, also fall away, as the cornerstones for those decisions are the market definitions. Ofcom has therefore today (rightly) issued a document revoking the remedies applied and the SMP findings that underlie those remedies. So far so good, that all seems good and straight forward.

At the same time as issuing the revocation, Ofcom has, however, also issued two other documents -

One document making slightly adjusted market definitions and SMP findings in those newly defined markets (without additional analysis to take account of the CAT's findings, other than to remove some specific products and geographies queried by the CAT) , and

A second document consulting on whether to apply a dark fibre remedy as part of these interim emergency regulations.

See the relevant documents here.

Ofcom, claims that it has to impose these remedies, and to make these interim market definitions and SMP findings, as otherwise in claims there is a risk of significant harm to competition and consumers, AND that the lacuna resulting from having its market definitions quashed (and the remedies no longer applying) qualifies as 'exceptional circumstances' which enables it to use its emergency powers.

Thus, through the use of emergency powers, Ofcom has effectively circumvented the CAT findings. Ofcom proposes these emergency interim regulations should stay in force for 16 months, until the end of March 2019 when the original remedies (which were all quashed) were due to expire in any case. It will be very interesting to see how stakeholders in the UK electronic communications markets react to this - in particular how the parties who appealed Ofcom's original market definitions and remedies (BT and CityFibre) will react. Watch this space!