In June 2005, Ofcom consulted on an approach to investigating potential contraventions on competition grounds of Requirements not to unduly discriminate that have been placed on SMP providers. The proposal was made up of two parts.
Firstly, Ofcom proposed that in all such investigations it should ask two questions:
- Do any differences (or similarities) between transaction conditions offered by an SMP provider to two customers reflect relevant differences (or similarities) in the customers' circumstances?
- Whether any such differences (or similarities) that are not objectively justified by relevant differences (or similarities) in the customers' circumstances had, have or will have the capability to harm competition?
Secondly, Ofcom proposed a special case. Ofcom proposed that when an SMP provider offers differences in non-price transaction conditions in favour of its own downstream business, then Ofcom should presume undue discrimination, and invite the SMP provider to rebut this presumption.
These proposals represented two changes to the existing guidelines issued by Oftel. The first change is a move away from a 'material adverse effect to competition' test to a 'capable of harm to competition' test. The second change is to the scope of the rebuttable presumption.
Ofcom received 15 responses to the consultation. All of the respondents supported Ofcom's proposals to some degree, and the majority of respondents supported most of the positions outlined.
In this document, we set out how Ofcom has taken account of questions raised by respondents. We are simultaneously publishing final guidelines that illustrate Ofcom's new approach to investigating potential contraventions of requirements placed on SMP providers not to discriminate unduly.