On 23rd October Ofcom, the UK Communications regulator and concurrent competition regulator, issued a Statement of Objections (“SO”) to Motorola Solutions UK Limited (“Motorola”), its ultimate parent company Motorola Solutions Inc., and Sepura Limited (“Sepura”) alleging that they had breached UK and EU competition law.
The SO sets out the regulator’s provisional view that the parties infringed Chapter 1 of the Competition Act 1998 and Article 101 of the Treaty of the Functioning of the European Union by exchanging competitively sensitive information relating to future pricing intentions. The allegations arise out of participation by the parties in a competitive tendering exercise run by the Police ICT company in 2018 in relation to the Airwave emergency radio system used by the Police and other UK emergency services.
This is an interesting case as it arises in the context of a public procurement exercise. It is unclear from the published information whether the alleged exchange of commercially sensitive information took place in the context of the parties were seeking to form a consortium to respond to the tender in question or whether the alleged exchange took place in circumstances were the parties were individually responding to the tender on their own account. Given their likely status as direct competitors the latter is more likely. Either way the case will be of interest to those engaged in public procurements as it should lay down clear guidance as to what is and is not acceptable contact between competitors when responding to such tenders.
Airwave is a well – established terrestrial trunked radio network used by the emergency services in the UK. It is based on the EU TETRA standard and allows two-way radio communications between public safety users and commercial organisations. In 2014, the Home Office launched a tender designed to replace the Airwave network with a new network called the Emergency Services Network (“ESN”), a 4G commercial mobile LTE network. However, the roll-out of the new ESN was delayed. This meant that TETRA compatible devices, accessories and related services were required for far longer for use the Airwave network. Therefore, replacement handsets and other equipment were needed to address the issues associated with the delay in the rollout of the ESG. Consequently in 2018, the Police ICT Company commenced a competitive tendering exercise under which they were acting as a central purchasing body on behalf of other Airwave users.
On 7th June 2019 Ofcom opened an investigation under the Competition Act 1998 (the “Act”) into the potential sharing of commercially sensitive information, including information on future pricing, between competitors in the provision of equipment and related services in the electronic communications sector in the UK. Having now satisfied itself that there is strong evidence to justify continuing with the case it issued an SO on 23rd October which marks the formal commencement of proceedings against Motorola and Sepura.
Only outline details of the allegations are available as the SO is not made public. However, the allegations centre around how the potential sharing of commercially sensitive information between Motorola and Sepura as competitors in the provision of equipment and related services in the electronic communications sector in the UK constitute infringements of the Chapter I prohibition of the Competition Act 1998 and/or Article 101 of the Treaty of the Functioning of the European Union. These infringements had the object of preventing, restricting or distorting competition in the supply of TETRA devices, accessories and related services for use on the Airwave network in Great Britain and may have affected trade within the UK and between EU Member States.
At this stage there is no assumption that competition law has been infringed but the parties now have the opportunity to make representations to Ofcom on the SO before the regulator comes to a final decision.
