Part 2Networks, services and the radio spectrum
Chapter 1Electronic communications networks and services
SMP conditions: procedure
I8I1378Circumstances 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.
F302
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.
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.
F285
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I16I279Market power determinations
1
Before making a market power determination, OFCOM must—
a
identify (by reference, in particular, to area and locality) the markets which in their opinion are the ones which in the circumstances of the United Kingdom are the markets in relation to which it is appropriate to consider whether to make the determination; and
b
carry out an analysis of the identified markets.
F251A
In identifying or analysing a services market for the purposes of this Chapter, OFCOM must conduct a forward-looking assessment of the market, taking into account expected or foreseeable developments that may affect competition in the market.
F202
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F92ZA
In identifying or analysing a services market for the purposes of this Chapter, OFCOM may have regard to EECC materials relating to market identification and analysis.
F162A
In determining whether to identify a market for the purpose of considering whether to make a market power determination, OFCOM must consider whether the criteria in subsection (2B) are met; and OFCOM may not identify that market for that purpose unless they consider that the criteria are met.
2B
Those criteria are—
a
that high and non-transitory structural, legal or regulatory barriers to entry are present;
b
that there is a market structure which, having regard to the state of infrastructure-based competition and other sources of competition behind the barriers to entry, does not tend towards effective competition within such period as OFCOM determine to be appropriate in relation to the review;
c
that competition law alone is insufficient adequately to address the identified market failure.
F142BA
In considering whether to make or revise a market power determination in relation to a services market, OFCOM may have regard to EECC materials relating to market analysis or the determination of what constitutes significant market power.
F222C
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F203
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4
The way in which—
a
a market is to be identified for the purposes of this section, or
b
a market power determination is to be made,
is by the publication of a notification containing the identification or determination.
5
Notifications for the purposes of subsection (4)—
a
may be given separately;
b
may be contained in a single notification relating to both the identification of a market and the making of a market determination in relation to that market; or
c
may be contained in a single notification under section 48(1) with respect to the setting or modification of an SMP condition and either—
i
the making of the market power determination by reference to which OFCOM set or modify that condition; or
ii
the making of that market power determination and the identification of the market in relation to which they make that determination.
6
The publication of a notification under this section must be in such manner as appears to OFCOM to be appropriate for bringing the contents of the notification to the attention of the persons who, in OFCOM’s opinion, are likely to be affected by the matters notified.
F196A
In this section “EECC materials” means recommendations or guidelines published by the European Commission, and guidelines published by BEREC, under the Framework Directive or the EECC Directive (including those published after IP completion day).
F207
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I10I180Proposals for identifying markets and for market power determinations
F51
Where section 80A applies, OFCOM must comply with the applicable requirements of that section F12... before—
a
identifying a market for the purposes of making a market power determination, or
b
making a market power determination.
1A
Where section 80A does not apply because of subsection (2) of that section—
a
any identification of a market or market power determination must be temporary; and
b
the notification published under section 79(4) containing the identification or determination must state the period for which the identification or determination is to have effect.
1B
Where OFCOM propose to extend or make permanent any such temporary identification or determination—
F23b
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F107
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80AF32F2Consultation for market identifications and market power determinations
1
This section applies where—
a
OFCOM propose—
i
to identify a market for the purposes of making a market power determination; or
ii
to make a market power determination; and
b
(in the case of a services market) the proposed identification or determination is in OFCOM’s opinion likely to result in the setting, modification or revocation of SMP services conditions that will have a significant impact on the market.
2
But this section does not apply where F11... in OFCOM’s opinion—
a
there are exceptional circumstances; and
b
there is an urgent need to act in order to safeguard competition and to protect the interests of consumers.
3
OFCOM must publish a notification of what they are proposing to do.
4
Notifications for the purposes of subsection (3)—
a
may be given separately;
b
may be contained in a single notification relating to both the identification of a market and the making of a market power determination in relation to that market; or
c
may be contained in a single notification under section 48A(3) with respect to the setting or modification of an SMP condition and either—
i
the making of the market power determination by reference to which OFCOM are proposing to set or modify that condition; or
ii
the making of that market power determination and the identification of the market in relation to which they are proposing to make that determination.
5
A notification under this section relating to a proposal to identify a market or to make a market power determination must—
a
state that OFCOM are proposing to identify that market or to make that market power determination;
b
set out the effect of the proposal;
c
give their reasons for making the proposal; and
d
specify the period within which representations may be made to OFCOM about their proposal.
6
That period must be a period of not less than F2430 days after the day of the publication of the notification.
7
But where OFCOM are satisfied that there are exceptional circumstances justifying the use of a shorter period, the period specified as the period for making representations may be whatever shorter period OFCOM considers reasonable in those circumstances.
8
The publication of a notification under this section must be in such manner as appears to OFCOM to be appropriate for bringing the contents of the notification to the attention of the persons who, in OFCOM’s opinion, are likely to be affected by the matters notified.
9
OFCOM must—
a
consider every representation about the proposal made to them during the period specified in the notification; and
b
have regard to every international obligation of the United Kingdom (if any) which has been notified to them for the purposes of this paragraph by the Secretary of State.
10
F2680BEU consultation for market identifications and market power determinations
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I4I1181F18Delivery of copies of notifications under sections 79 and 80A
1
OFCOM must send to the Secretary of State a copy of every notification published under section 79(4) or 80A(3).
F72
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F73
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F74
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F33I3I1482European Commission’s powers in respect of proposals
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F3483Special rules for transnational markets
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I15I684Review of services market identifications and determinations
1
This section applies where OFCOM have identified and analysed a services market for the purposes of making a market power determination.
2
OFCOMF6must, when required to do so by section 84A and at such other times as they may consider appropriate, carry out further analyses of the identified market for one or both of the following purposes—
a
reviewing market power determinations made on the basis of an earlier analysis;
b
deciding whether to make proposals for the modification of SMP conditions set by reference to a market power determination made on such a basis.
F213
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4
Where on, or in consequence of, a further analysis under this section, OFCOM determine that a person to whom any SMP conditions apply is no longer a person with significant market power in that market, they must revoke every SMP services condition applied to that person by reference to the market power determination made on the basis of the earlier analysis.
5
Before carrying out a further analysis under subsection (2), OFCOM may review any decision of theirs identifying the markets which it was appropriate to consider for the purpose of carrying out an earlier analysis.
6
Where, on such a review, OFCOM conclude that the appropriate markets have changed—
a
they must identify the markets they now consider to be the appropriate ones; and
b
those markets shall be the identified markets for the purposes of the further analysis.
7
Sections 79 to F481 apply—
a
in relation to the identification of a services market for the purposes of reviewing a market power determination under this section, as they apply in relation to the identification of such a market for the purpose of making a market determination; and
b
in relation to the review of such a determination, as they apply in relation to the making of such a determination.
84AF15Timing of services market identifications and determinations
1
This section makes provision about the exercise by OFCOM of their powers—
a
to identify and analyse services markets;
b
to make and review market power determinations in respect of such markets; and
c
to set, modify and revoke SMP services conditions by reference to such determinations.
F272
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3
Where, following the identification and analysis of a services market, OFCOM have made a market power determination in relation to it, they must ensure that within the specified period they have—
a
carried out a further analysis of the market and reviewed the identification and determination made on the basis of the earlier analysis; F8...
F8b
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4
Subsection (3) applies only where the market power determination was made after 25 May 2011.
F295
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F296
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F177
In subsection (3), “the specified period” means the period of 5 years from the publication under section 79(4) of the notification of the market power determination made on the basis of the earlier analysis, but this is subject to subsection (8).
8
If, in relation to an analysis and review that would otherwise be required within the period mentioned in subsection (7), OFCOM are of the opinion that exceptionally a longer period is justified, OFCOM may, by publishing a statement of the reasons for their opinion, extend the specified period by up to one additional year.
I9I585Review of apparatus market identifications and determinations
1
This section applies where OFCOM have identified and analysed an apparatus market for the purposes of making a market power determination.
2
OFCOM must, at such intervals as they consider appropriate, carry out further analyses of the identified market for one or both of the following purposes—
a
reviewing market power determinations made on the basis of an earlier analysis;
b
deciding whether to make proposals for the modification of SMP conditions set by reference to any such market power determination.
3
Where on, or in consequence of, a further analysis under this section, OFCOM determine that a person to whom any SMP conditions apply is no longer a person with significant market power in that market, they shall revoke every SMP apparatus condition applied to that person by reference to the market power determination made on the basis of the earlier analysis.
4
Before carrying out any further analysis under subsection (2), OFCOM may review any decision of theirs identifying the markets which it was appropriate to consider for the purpose of carrying out any earlier analysis.
5
Where on such a review OFCOM conclude that the appropriate markets have changed—
a
they shall identify the markets they now consider to be the appropriate ones; and
b
those markets shall be the identified markets for the purposes of the further analysis.
6
Where on such a review OFCOM conclude that there is no person at all with significant market power in relation to the identified market—
a
they must so inform the Secretary of State; and
b
the Secretary of State may by order remove or restrict OFCOM’s power under this Chapter to set SMP apparatus conditions by reference to that market.
7
Sections 79, F380, 80A and 81(1) apply—
a
in relation to the identification of a apparatus market for the purposes of reviewing a market power determination under this section, as they apply in relation to the identification of such a market for the purpose of making a market determination; and
b
in relation to the review of such a determination, as they apply in relation to the making of such a determination.
I12I786Cases where review required
1
OFCOM must not set an SMP services condition by a notification which does not also make the market power determination by reference to which the condition is set unless—
a
the condition is set by reference to a market power determination which has been reviewed under section 84 and, in consequence of that review, is confirmed in the notification setting the condition; or
b
the condition is set by reference to a market power determination made in relation to a market in which OFCOM are satisfied there has been no material change since the determination was made.
2
OFCOM must not modify or revoke SMP services conditions applying to a person except in a case falling within subsection (3) or (4).
3
The first case is where, for the purpose of determining whether to make the modification or revocation, OFCOM have—
a
carried out a further analysis under section 84 of the market in question; and
b
reviewed the market power determination for the time being in force in that person’s case.
4
The second case is where OFCOM are satisfied that there has not—
a
in the case of an unmodified condition, since the condition was set, or
b
in any other case, since the condition was last modified,
been a material change in the market identified or otherwise used for the purposes of the market power determination by reference to which the condition was set or last modified.
5
OFCOM must not modify SMP apparatus conditions applying to a person except where, for the purpose of determining whether to make the modification or revocation, they have—
a
carried out a further analysis under section 85 of the market in question; and
b
reviewed the market power determination for the time being in force in that person’s case.
6
A change is a material change for the purposes of subsection (1) or (4) if it is one that is material to—
a
the setting of the condition in question; or
b
the modification or revocation in question.