Software Cellular Network Ltd v T-Mobile (UK) Ltd

On an application for a mandatory interim injunction alleging abuse of a dominant position, the claimant need show a seriously arguable case. Market-share percentages from other disputes do not establish a ceiling below which dominance cannot be seriously arguable. The court must assess the relevant market and the competitive significance of the conduct in its current context.

Where the court cannot reach a high degree of assurance that the claimant will succeed at trial, relief may still be granted if the risk of injustice from refusal sufficiently outweighs the risk from granting it. The assessment includes the adequacy and quantification of damages, urgency, the practical effect of the defendant’s conduct, undertakings in damages, and the burden imposed by the order.

Software Cellular Network Ltd, trading as Truphone, sought urgent interim orders requiring T-Mobile (UK) Ltd to activate Truphone telephone numbers on T-Mobile’s network. Activation was necessary for T-Mobile customers to call Truphone customers using their Truphone numbers.

Truphone alleged that T-Mobile’s refusal, while activating numbers allocated to other communications providers, was an abuse of a dominant position contrary to section 18 of the Competition Act 1988. T-Mobile disputed the relevant market, its dominance, and the justification for mandatory relief. The central questions were whether there was a seriously arguable case and whether the balance of convenience favoured interim orders pending trial.

1. Seriously arguable case. The court held that the proposed market definitions were open to debate. Truphone’s definition might be too narrow and T-Mobile’s might be too wide, but it was seriously arguable that a market share between 22 and 30 per cent could establish dominance in a market of this nature. Market-share examples from other cases and years could not be treated as a ceiling. The absence of a presumption that a share below 30 per cent was a safe harbour was material.
2. The alleged refusal to activate Truphone’s numbers was also seriously arguable as abusive. Activation was an indispensable input to an each-to-any telecommunications service. The court rejected, at least at this stage, the suggestion that competition law could not require an undertaking to purchase a service rather than merely make a service available.
3. Mandatory interim relief. Applying the guidance discussed in AAH Pharmaceuticals Ltd v Pfizer Ltd [2007] EWHC 565 (Ch), including the passage from Nottingham Building Society v Eurodynamic Systems [1993] FSR 468, the court considered whether it had a high degree of assurance of success at trial. It did not. Nevertheless, relief was appropriate because the risk of injustice from refusal sufficiently outweighed the risk from granting it.
4. The balance favoured Truphone. Without activation, it could launch no service or only a materially compromised service, and its losses, including future commercial losses, would be difficult to quantify. T-Mobile faced the comparatively limited burden of doing what other mobile network operators were doing, at rates it had proposed. Truphone’s cross-undertaking in damages further reduced the risk of injustice.
5. The court also relied on the reasoning concerning urgent access for a new service in Sea Containers Ltd v Stena Sealink Ports and Stena Sealink Line [1995] 4 CMLR 84. Interim orders were granted until trial or further order, requiring T-Mobile to open Truphone’s number range by 0001 hours on 23 July 2007 and to pay the specified termination rates unless Ofcom or the court determined otherwise.