High court decision British Horse Racing

13 April 2006

Karen Nightingale

January 2006

The High Court has published its decision of 21 December 2005 in the Attheraces v The British Horse Racing Board case, in which The British Horse Racing Board (BHB) was condemned for abuse of its dominant position. This decision is one of very few decided cases in favour of a private enforcement claimant that has been brought in the UK.

BHB was engaged in a programme of commercialisation of its assets, including its database of information related to horse racing, and in particular pre-race data, as a means of funding British horseracing. Problems arose for BHB out of the decision of the ECJ in British Horse Racing Board v William Hill (Case C-203/02), dated 9 November 2004, in which the ECJ held that BHB’s investment in this database was not the subject of protection under the Databases Directive.

Attheraces Limited (ATR) licensed such data from BHB for use in its websites, television channels and other audio-visual media related to British horse racing. ATR claimed that BHB effectively held a monopoly in the supply of pre-race data and that BHB had sought to impose unfair terms for the supply of the pre-race data that ATR required for its business, and made threats to bring about an end to the supply of such data, amounting to an abuse of BHB’s dominant position.

The Court confirmed that a position of dominance is one in which an undertaking can behave to an appreciable extent independently of its competitors, customers and ultimately of consumers. The legal burden of proof was on ATR to establish abuse within Article 82 and s.18 of the Competition Act 1998 and each of the analytical steps which are prerequisites to a finding of abuse of a dominant position. The standard of proof was held to be the balance of probabilities, although the Court stated that the seriousness of the infringement required the proof or evidence to be “commensurately cogent and convincing”.

In assessing dominance, the Court considered analysis of market definition, market share and competitive constraints. The Court held that the product supplied by BHB is UK pre-race data, this being the subject of the contracts and negotiations between the parties. In looking at the relevant product market, the Court considered all products that were substitutable or sufficiently interchangeable with the product in question. The Court held that the relevant product market was for the supply of UK pre-race data to those in the horse racing industry that require such information for the services they provide to their customers.

BHB was found to be dominant in that market and was held to have abused that market dominance by threatening to terminate the supply of pre-race data to ATR. ATR was an existing customer of BHB and pre-race data is an essential facility controlled by BHB without which ATR would be eliminated from the market. Such a refusal will amount to an abuse of a dominant position, even if the dominant undertaking is contractually entitled to do so, unless the act is objectively justified. The Court found no objective justification for BHB’s behaviour.

The Court also held that the prices proposed by BHB prior to the commencement of proceedings were unfairly excessive because they were significantly in excess of the economic value of BHB’s pre-race data measured according to the cost of producing such data and were also substantially higher than BHB’s normal charge for broadcasters, thereby unfairly discriminating against ATR. ATR has now established that BHB has infringed Article 82 and the UK equivalent provision. The Court will decide on the appropriate relief (including damages) in separate proceedings.

Source: Attheraces Ltd v The British Horse Racing Board [2005] EWHC 3015 (Ch), 21 December 2005, available at:
http://www.bailii.org/ew/cases/EWHC/Ch/2005/3015.html