The Competition and Markets Authority (CMA) has secured a significant victory as the Court of Appeal (CoA) today unanimously dismissed Motorola’s application for permission to appeal against the CMA’s findings regarding excessive profits from its provision of communications network services to the UK’s emergency services.

The Court of Appeal rejected both grounds of Motorola’s appeal, which challenged the CMA’s assessment of competition in the relevant market and the profitability of the Airwave Network in 2021. This decision upholds the CMA’s original findings that Motorola held a virtually unconstrained monopoly in the market, enabling it to generate supernormal profits.

In response to these findings, the CMA imposed a charge control order, capping the prices Motorola could charge for its services. Motorola initially challenged this decision in the Competition Appeal Tribunal (CAT), which unanimously dismissed the challenge. Motorola then sought permission to appeal to the Court of Appeal, which has now endorsed the CMA’s reasoning and upheld the price cap.

The CMA’s price control measures ensure that the UK’s emergency services pay a fair price for the Airwave Network’s services, reducing costs by nearly £200 million annually. This decision safeguards public funds and ensures that critical emergency services are not overcharged for essential communications infrastructure.

Today’s ruling by the Court of Appeal brings this case to a close, as Motorola has no further right to appeal. The decision reinforces the CMA’s commitment to addressing market failures and protecting consumers, particularly in sectors as vital as emergency services.

Statement from the CMA

George Lusty, Executive Director of Consumer Protection and Markets at the CMA, said:“The CMA’s investigations and legal decisions are carefully considered and evidence-led, and we welcome today’s decision by the Court of Appeal, which endorses our reasoning in this case.

Our investigation revealed that Motorola was charging the UK’s emergency services £200 million more per year than they would in a well-functioning market. Today’s judgment ensures that our price cap remains in place, limiting how much Motorola can charge for the use of its Airwave Network.

This decision brings this matter to a close, ensuring fair pricing for essential services and protecting public funds.”

Background

The Airwave Network is a critical communications system used by the UK’s emergency services, including police, fire, and ambulance services. The CMA’s intervention ensures that the costs of maintaining and operating this network remain fair and proportionate, benefiting both emergency services and taxpayers.

Source: www.gov.uk