Skip to contents

Investigation into National Grid meter contracts 

 

In October 2004 Ofgem received a complaint from a meter operator that certain contracts National Grid entered into with gas suppliers for the provision and maintenance of domestic gas meters had the effect of foreclosing the market to competing meter operators.

In July 2005 Ofgem sent the first formal requests for information and in February 2008 the Authority made a Decision that National Grid had breached the Chapter II prohibition of the Competition Act 1998 (the Act) and Article 82 of the EC Treaty, (now Article 102 of Treaty on the Functioning of the European Union (TFEU)).

Chapter II of the Act prohibits the abuse of a dominant position in a market by one or more undertakings which may affect trade within the UK. Article 102 TFEU prohibits the abuse of a dominant position in a market by one or more undertakings which may affect trade between Member States. Ofgem fined National Grid £41.6 million. National

Grid appealed to the Competition Appeal Tribunal (CAT) against this decision. In its ruling of 29 April 2009 the CAT upheld Ofgem’s decision confirming that National Grid, by restricting the development of competition in the domestic gas meter market, was in breach of competition law. The CAT reduced the penalty imposed on National Grid to £30 million.

National Grid then appealed to the Court of Appeal (Civil Division) against the tribunal decision. On 23 February 2010 the Court of Appeal ruled that National Grid had abused its dominant position in the market in Great Britain for the provision of domestic gas meters contrary to the Chapter II prohibition of the Act and Article 102 TFEU thereby endorsing the substance of Ofgem’s case.

The Court of Appeal reduced the penalty imposed on National Grid by the CAT to £15 million.

On 28 July 2010, the Supreme Court refused National Grid leave to appeal the Court of Appeal’s decision, bringing the legal proceedings to a final conclusion.