On 17 June, the Grand Chamber of the European Court of Justice heard a number of Member States (the U.K., France, Ireland, Spain and Greece) intervening to support the German position in the Persche case.

The issue in Persche is whether a German taxpayer can claim tax relief in Germany on a cross-border donation made to a Portuguese foundation which is charitable in Portugal. The German tax authorities have refused to give this relief because of the difficulty of checking whether the foundation is also charitable as a matter of German law. The outcome of the case is likely to be important in the U.K. which also restricts tax relief to donations to U.K. charities.

Raymond Hill was instructed by the Treasury Solicitor on behalf of the U.K.

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Raymond Hill

On 18 June 2008, the Competition Appeal Tribunal is due to hear the appeal in Vodafone & Ors v Ofcom. Ofcom has ordered that the network operators must establish a “common database” of numbers and a system of “direct routing” of calls to ported numbers.  Porting is the process by which a consumer can retain their telephone number when they change service provider.

Tim Ward appears for Vodafone, Meredith Pickford is acting for T-Mobile and Alan Bates acts for Ofcom.

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Tim Ward QC
Meredith Pickford
Alan Bates

On 17 June 2008, the Devenish case continues with an appeal against the High Court judgment handed down earlier this year.

Devenish purchased vitamins from members of the vitamins cartel that was the subject of a decision by the EC Commission in 2003. Devenish is seeking all, or some, of the profits earned by the cartelists. The High Court ruled that Devenish was not entitled to that remedy.

Christopher Vajda QC is representing Devenish in the Court of Appeal in its appeal against the High Court judgment (in which he was not involved).

In a decision in the Chancery Division in the appeals in Calltel and Opto v HMRC, delivered on 6th June 2008, Mr Justice Briggs has awarded HMRC security for its costs against the appellant taxpayers. Calltel is an appeal to the High Court from the VAT & Duties Tribunal’s decision of 20th July 2007 that the appellants were knowingly connected with MTIC fraud. It is believed to be the first time that HMRC have asked for (and received) security for costs in a VAT or Duties appeal. Security was ordered both for the costs already incurred and awarded below and against future costs of the appeal.

Philip Moser is junior counsel for HMRC.

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Philip Moser QC

Last week, the Competition Appeal Tribunal heard appeals by British Sky Broadcasting Group (“Sky”) and Virgin Media against decisions taken by the Competition Commission and the Secretary of State for Business, Enterprise and Regulatory Reform in relation to Sky’s acquisition of a 17.9% shareholding in ITV.  In a report published last December, the Competition Commission concluded that Sky’s shareholding in ITV may be expected to give rise to a substantial lessening of competition, and recommended that Sky’s holding should be reduced to a level below 7.5%.  The Secretary of State was responsible for the eventual decision on remedial action, but agreed with the Commission’s recommendation.  Sky has challenged the Commission’s conclusions on jurisdiction, competition and remedial action, and also challenges the Secretary of State’s decision on remedies.

Virgin Media has mounted a separate challenge to aspects of the decision in relation to the media public interest consideration that there be a sufficient plurality of persons with control of media enterprises serving certain UK audiences.  Both the Commission and the Secretary of State found that the merger is not expected to operate against the public interest on this latter basis.  Virgin Media has also complained that the remedy imposed was inadequate. The Tribunal has reserved its judgment on both appeals.

Rupert Anderson QC and Elisa Holmes acted for The Secretary of State.

John Swift QC, Daniel Beard and Rob Williams were counsel for The Competition Commission.

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John Swift QC
Daniel Beard QC
Rob Williams
Elisa Holmes

This week the High Court is considering an application by Stuart Wheeler for judicial review brought against the Prime Minister and Foreign Secretary. Mr Wheeler challenges their decision not to hold a referendum on whether the United Kingdom should ratify the Treaty of Lisbon. He argues that the Government made unequivocal promises that a referendum would be held to allow the electorate to vote on whether the now defunct Constitutional Treaty should be ratified, and that the refusal to hold a referendum in respect of the Treaty of Lisbon is unlawful as being in breach of his legitimate expectation.

Ian Rogers is appearing as junior counsel on behalf of the Prime Minister and Foreign Secretary.

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Ian Rogers

On Wednesday 4 June, Jeremy McBride was appointed a member of the new Scientific Committee of the European Union’s Fundamental Rights Agency.

The Agency is an independent body of the European Union, established to provide assistance and expertise to the European Union and its Member States when they are implementing Community law, on fundamental rights matters. The aim is to support them to respect fully fundamental rights when they take measures or formulate courses of action. The Scientific Committee is intended to serve as guarantor of the scientific quality of the Agency’s work.

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Jeremy McBride

 

The CAT handed down judgment in two major appeals on 20 May (the appeals having been heard together in January and February):

(1) Mobile Call Termination – in which the CAT upheld Ofcom’s finding that H3G had significant market power in the market for mobile call termination on H3G’s network, and its related decision to impose a price cap on H3G’s termination charges (i.e. the charges imposed by H3G on other mobile network operators for connecting calls to H3G subscribers).  Ofcom is empowered to impose “SMP Conditions” by Part 2 of the Communications Act 2003, which gives effect to a raft of EC communications directives.  Ofcom made similar findings in relation to the other mobile network operators, but there were not appealed.  H3G’s appeal against the level of the price cap (together with a similar appeal by BT) is currently before the Competition Commission – as the first price control reference under s.193 of the Communications Act 2003.

(2) Termination Rate Disputes – in which the CAT upheld appeals by T-Mobile, BT, H3G and the FNOs (a group of fixed network operators led by Cable & Wireless) against Ofcom’s resolution of a number of disputes between (a) BT and each of the MNOs; and (b) H3G and each of O2 and Orange.  Ofcom is empowered to resolve disputes between communications providers under s.185 of the Communications Act 2003, which also gives effect to the EC communications directives.  In this case, each dispute concerned the prices charged by the MNOs for mobile call termination, and in each case Ofcom had upheld rates that were said by the appellants to be too high.  The Tribunal is currently considering the level at which Ofcom should have fixed the rates in dispute, and intends to remit the matter to Ofcom with an appropriate direction.

Peter Roth QC, Josh Holmes and Ben Lask represented OFCOM

Jon Turner QC and Meredith Pickford represented T-Mobile whilst Anneli Howard appeared for BT.

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Jon Turner QC
Josh Holmes
Meredith Pickford
Anneli Howard
Ben Lask

On Tuesday 3 June the hearing resumed at the High Court in the matter of British Afternoon Greyhound Racing Services (and others) v Amalgamated Racing Ltd (and others).  The case concerns a challenge to the lawfulness of arrangements for the licensing of picture rights by 30 British racecourses for broadcast to licensed betting offices by the new entrant Turf TV (a joint venture between the racecourses and Alphameric plc), and a counterclaim against 3 of the largest British bookmakers, Ladbrokes, William Hill and BetFred.

The defendants are represented by Peter Roth QC, Paul Harris, Ronit Kreisberger and Ewan West, together with Brian Doctor QC (Fountain Court Chambers), instructed by Wiggin LLP.

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Paul Harris QC
Ronit Kreisberger
Ewan West

The Competition Appeal Tribunal has dismissed an appeal by Independent Media Support (IMS) against Ofcom’s decision that Red Bee Media had not infringed the Chapter I or Chapter II prohibitions in the Competition Act 1998.  Both IMS and Red Bee are providers to UK broadcasters of TV ‘access services’ (such as subtitling, signing and audio description).  IMS had complained to Ofcom that Red Bee had, in 2004, tendered a below cost price for a long-term exclusive contract to supply such services to Channel 4 and that this was a breach of the Chapter II prohibition.  IMS also alleged that the length and exclusive nature of the contract infringed Chapter I. In a decision issued in 2007, Ofcom rejected these complaints on the basis that: (a) the proper time for assessing the alleged infringement of the Chapter II prohibition was limited to 2004 (the time when Red Bee bid for, and won, the Channel 4 contract), and Red Bee was not dominant at that time, with the consequence that no infringement of Chapter II could be established; and (b) given that there remained at least three credible bidders able to bid for contracts to provide such services to UK broadcasters whenever bids were called for, the duration of the exclusive agreement was not such as to infringe the Chapter I prohibition either. IMS appealed to the Tribunal.

In dismissing the appeal, the Tribunal upheld Ofcom’s reasoning, and confirmed that the proper time for assessing whether Red Bee was dominant for the purposes of investigating the Chapter II complaint was 2004.  Thus, even if Red Bee had become dominant after 2004, that would not have given rise to an infringement of Chapter II as, once the Channel 4 contract had been signed, Red Bee had no choice as to the prices which it could charge Channel 4.  Accordingly, even if those prices were below cost, the contract could continue to operate according to its terms and did not have to be re-tendered. A source quoted in Global Competition Review described the Tribunal’s judgment as a “full tick” for Ofcom which was represented by Rupert Anderson QC and Alan Bates.

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Alan Bates