The Supreme Court has allowed an appeal by representatives of the Irish League of Credit Unions (ILCU), set aside the High Court’s orders in full and dismissed the Competition Authority’s claim under sections 4 and 5 of the Competition Act 2002.
In a judgment delivered on 8 May 2007, Mr Justice Fennelly said the Authority had not established that the ILCU’s Savings Protection Scheme (SPS) was a distinct product, or that it belonged to a separate product market. That finding removed the necessary basis for the Authority’s tying case, which alleged that credit unions could access the scheme only by also buying ILCU representation services.
The Authority had argued that ILCU held a dominant position in the SPS market and abused it by withholding access from credit unions that left or faced expulsion from the association. The High Court had accepted that analysis, found breaches of sections 4 and 5, and made orders including an injunction restricting disaffiliation in the circumstances before it. Those were prior High Court findings and orders; the Supreme Court set them aside.
The Supreme Court said the SPS had been created and operated by ILCU for its members. Member credit unions contributed to the fund and submitted to monitoring and inspection, but had no proprietary interest in it or entitlement to financial assistance. The Court noted evidence that no comparable scheme had been commercially offered in Ireland or elsewhere, and that attempts to find an insurer willing to provide such a service had produced no provider.
The Authority’s case had shifted from the market definition in its statement of claim. The separate-market theory for SPS emerged in an expert report shortly before the High Court hearing. The Supreme Court said the appeal turned first on whether SPS was an independent product. Because it concluded that the Authority had not proved that threshold point, it did not decide whether representation services were a distinct product or whether ILCU was dominant or had abused a dominant position.
The Court also rejected the Authority’s alternative case under section 4 for the same reasons. It concluded that there could be no finding of abusive refusal to supply on the case as established. The final order was to allow the appeal, set aside the High Court order in its entirety and substitute an order dismissing the Authority’s claim.