Communications Act 2003 s.78 – Circumstances required for the setting of SMP conditions

(1)For the purposes of this Chapter a person shall be taken to have significant market power in relation to a market if he enjoys a position which amounts to or is equivalent to dominance of the market.

[^F297 (2)References in this section to dominance of a market are to be construed, so far as it is appropriate to do so for the purposes of this Chapter, in the same way as the reference in section 18(1) of the Competition Act 1998 to a dominant position in a market.^F297]

(3)A person is to be taken to enjoy a position of dominance of a market if he is one of a number of persons who enjoy such a position in combination with each other.

(4)A person or combination of persons may also be taken to enjoy a position of dominance of a market by reason wholly or partly of his or their position in a closely related market if the links between the two markets allow the market power held in the closely related market to be used in a way that influences the other market so as to strengthen the position in the other market of that person or combination of persons.

^F298 (5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Definitions used in section 78 1

significant market power: “significant market power” is to be construed in accordance with section 78;
Defined in s.151(1) · see it in the full Act

Cases considering section 78 3

Hutchison 3G UK Ltd v The Office of Communications & Anor

[2009] EWCA Civ 683 · 16 July 2009Defines

The court treated section 78 as defining SMP by reference to a position amounting to or equivalent to dominance. (see paras [30]; [84]; [91]) The court applied the dominance-based test to ask whether H3G could behave independently of competitors, customers and consumers. (see paras [30]; [91]; [101]) Cited only.

BT Group Plc & Anor. v Justin le Patourel

[2022] EWCA Civ 593 · 6 May 2022

The test for significant market power under this provision was treated as the same as the dominance test under section 18 of the Competition Act 1998, supporting the relevance of Ofcom's findings (see para [5]).

Talktalk Telecom Group Plc v Office of Communications & Anor

[2013] EWCA Civ 1318 · 30 October 2013Defines

Defines the statutory context in which BT may have significant market power, depending on the competitive circumstances of the relevant market. The provision was used to explain the regulatory setting (see para [71]).

What each judgment says about section 78 is in the case-law panel in the full Act.

Explanatory note

199.Sections 78 to 93 concern OFCOM’s powers and duties to identify markets, determine whether persons have significant market power (SMP) on those markets, and to impose SMP conditions on persons whom they have determined as having SMP.

200.Section 78 sets out when a person shall be taken to have SMP in relation to a particular market. A person will only be taken to have significant market power where he is, alone or with others, in a position of dominance in a market. A position of dominance must be construed in accordance with any applicable provisions of Article 14 of the Framework Directive, which (at its paragraph 2) defines dominance as ‘a position of economic strength affording the person the power to behave to an appreciable extent independently of competitors, customers and ultimately consumers’. A determination of joint dominance must take into account, in particular, the criteria for joint dominance set out in Annex II to the Framework Directive. This implements Article 14 of and Annex II to the Framework Directive.

All the explanatory notes for the Act

Amendments and notes

4 notes from legislation.gov.uk

Amendments

F297S. 78(2) substituted (31.12.2020) by The Electronic Communications and Wireless Telegraphy (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/246), reg. 1(2), Sch. 1 para. 23(2); 2020 c. 1, Sch. 5 para. 1(1)
F298S. 78(5) omitted (21.12.2020) by virtue of The Electronic Communications and Wireless Telegraphy (Amendment) (European Electronic Communications Code and EU Exit) Regulations 2020 (S.I. 2020/1419), reg. 1(2), Sch. 1 para. 34(3)

Commencement

I137S. 78 in force at 25.7.2003 for specified purposes by S.I. 2003/1900, arts. 1(2), 2(1), Sch. 1 (with art. 3) (as amended by S.I. 2003/3142, art. 1(3)) text for certain specified purposes only, see the commentary.
I138S. 78 in force at 29.12.2003 in so far as not already in force by S.I. 2003/3142, art. 3(2) (with art. 11)