CMA wins legal challenge in emergency services case
The CAT, in a unanimous decision, has upheld the CMA’s finding that Motorola was excessively pricing due to its virtually unconstrained monopoly on providing communications network services to the UK emergency services.
The Competition Appeal Tribunal (CAT) dismissed both grounds of Motorola’s appeal, which incorrectly claimed that the Competition and Markets Authority (CMA) had made errors in assessing competition in the relevant market and the profitability of the Airwave Network. The CMA’s order will now ensure that the UK’s emergency services pay a fair price, and this will reduce the current price by almost £200 million per year.
Martin Coleman, chair of the independent panel of experts conducting this investigation, said:
Our investigation showed that Motorola held all the cards when it came to pricing. With no other providers in the market, our fire, police, and ambulance services had no choice but to pay the rates set by Motorola – meaning they paid almost £200 million a year more than they would have if the market was working well.
Our price cap puts a limit on how much Motorola can now charge for the use of its Airwave Network. This ensures lower prices for these key services – and ultimately less cost for taxpayers – while allowing Motorola to invest in the network to ensure that quality and safety are maintained.
In October 2021, the CMA opened an investigation into mobile radio network services amid concerns that the market might not be working well. The investigation – conducted by an independent group of experts – confirmed these concerns, finding that UK emergency services currently have no choice but to continue using Motorola’s Airwave Network, due to a lack of alternative providers. As such, Motorola charged the Home Office – which negotiates contracts on behalf of emergency services – prices well above competitive levels, resulting in higher costs to the emergency services which are ultimately footed by taxpayers.
To reduce these costs, the CMA imposed a price cap in July 2023, which brought the price down to a level that would be expected in a well-functioning and competitive market – putting an end to the estimated £200 million per year of over-charging.
While protecting taxpayers, the price cap allows Motorola to continue to invest in the Airwave Network and so ensure that quality and safety are maintained.
Motorola disagreed with the CMA’s findings – specifically that the price of the Airwave Network services was not limited by competition and on the level of profit they make from the Airwave Network – and so challenged them at the CAT. Following a hearing in August 2023, the judgment was handed down today.
The CAT unanimously dismissed both of Motorola’s grounds of challenge.
For more information, visit the Mobile radio network services inquiry page.
For media enquiries, contact the CMA press office on 020 3738 6460 or [email protected].