Network Rail Infrastructure Ltd v Achilles Information Ltd

Competition rules may apply to safety and access schemes operated by an infrastructure undertaking where those schemes are inseparable from its economic operation of the infrastructure. An apparently unilateral scheme may constitute an agreement where participants accept continuing obligations and acquiesce, even under pressure. An appreciable restriction may be established by significant foreclosure in one market segment; detailed market-share evidence is not invariably required. Competition for a market through periodic tendering does not replace competition within the market. Under section 9 of the Competition Act 1998, benefits must flow from the specific restriction where that restriction is not objectively necessary. Abuse of dominance is objective and does not require commercial benefit to the dominant undertaking.

Network Rail operated the Sentinel and On-Track Plant Operations schemes, requiring suppliers seeking access to its managed railway infrastructure to obtain assurance exclusively through RISQS. Achilles, a competing assurance provider, challenged that requirement under Chapters I and II of the Competition Act 1998.

The Competition Appeal Tribunal held that the RISQS-only rule constituted an agreement restricting competition and, assuming dominance, an abuse of a dominant position. It ordered Network Rail to recognise equivalent alternative assurance schemes subject to reasonable and proportionate safety conditions: [2019] CAT 20. Network Rail appealed on issues concerning undertaking status, agreement, market definition, appreciable effect, exemption, and abuse of dominance.

1. Appeal dismissed. The Court of Appeal upheld the CAT’s decision on all grounds.
2. Network Rail was acting as an undertaking when operating the schemes. Control of access to the railway infrastructure was an essential and inseparable part of its economic operation. The safety purpose of the rule, Network Rail’s regulatory obligations, and the absence of profit did not alter that conclusion. The functional approach in FENIN, MOTOE, Wouters and OTOC supported the CAT’s analysis.
3. The schemes constituted agreements for section 2 of the Competition Act 1998. They imposed continuing responsibilities on participating undertakings, including reporting and investigative obligations. Acquiescence was sufficient, and acquiescence under pressure remained acquiescence. A formal contract for the supply of goods or services was unnecessary.
4. The CAT applied the correct approach to appreciable effect. Where restriction by object was not plain and obvious, it was necessary to assess actual or potential effects by reference to the relevant market and an appropriate counterfactual. Significant foreclosure and distortion in one segment could amount to an appreciable restriction even if competition continued elsewhere. Market-share analysis was not mandatory in every case. The De Minimis Notice provided guidance only.
5. Competition for a market through a periodic tender did not compensate for the elimination of competition within the market. The balancing of restrictive and pro-competitive effects belonged to the exemption analysis under Article 101(3), not the initial restriction inquiry.
6. The section 9 exemption failed. Since the RISQS-only rule was not objectively necessary to Network Rail’s wider activity, only benefits specifically flowing from that restriction could be considered. The CAT was entitled to weigh the competitive costs and benefits under Condition 1 as well as Condition 3. Failure to satisfy Condition 1 was sufficient. The new VBER argument was also too late and required factual evidence.
7. For Chapter II, abuse was an objective concept. Commercial benefit to the dominant undertaking was not a legal prerequisite. An abuse committed on the dominated infrastructure market could produce effects on a separate supplier-assurance market without requiring proof that Achilles was an essential trading partner. The CAT’s evaluation of the tender process was not plainly wrong.

• Court of Appeal (Civil Division) dismissed Network Rail’s appeal on all grounds.
• Competition Appeal Tribunal held that the RISQS-only rule infringed Chapters I and II of the Competition Act 1998 (assuming dominance) and made consequential recognition orders: [2019] CAT 20.