UK: High Court Ruling On Application To Strike Out Action Claiming BSI Breached Competition Law

Last Updated: 5 May 2010

On 23 April 2010, the High Court dismissed an application made by the British Standards Institution ("BSI") to strike out a competition based private action by SEL-Imperial Ltd ("SEL"). SEL is alleging that BSI acted anti-competitively in respect of its Kitemark scheme. Whilst dismissing certain parts of the claim, Mr Justice Roth concluded that certain allegations could not be struck out and so will proceed to full trial.

SEL, an importer and distributor of replica vehicle body parts, claimed that BSI interpreted the standard governing vehicle body repairs too broadly. Under this standard BSI offers certification services to the automotive vehicle body repair industry, awarding a Kitemark certification mark to successful applicants. It specifies that any replica parts must be independently certified unless they are "non-safety related".

SEL argues that BSI's broad interpretation of "safety-related" has resulted in a large number of replica parts requiring expensive independent certification, which has limited demand for uncertified replica parts - making it difficult to provide lower price replica parts and breaching Articles 101 and 102 TFEU.

BSI sought for the claim to be struck out.

Although the High Court struck out certain parts of the claim; it dismissed BSI's application on two counts. Firstly, the Court found SEL had a real prospect of showing there was a multilateral agreement, or number of bilateral agreements, which accepted BSI's interpretation of the standard - potentially restricting competition under Article 101 and limiting the development of alternative standards and products.

Secondly, the High Court concluded that, due to lack of legal certainty on the question of whether there was an abuse by BSI, it could not strike out SEL's claim in this respect. BSI is alleged to have abused its dominant position in the market for testing and certification of vehicle body repair facilities (which is argued affects the separate market for the supply of parts). The Court noted that the law under Article 102 is still developing in this area and that the question of whether there has been an abuse may merit a reference to the ECJ.

The case will now go to a full trial. Although dealing with the interpretation of a particular standard the case may have wider implications and it will be interesting to see how the case plays out at trial, in particular what the Court has to say on whether the development of alternative standards was indeed limited and whether the practices are deemed to amount to an abuse.

To view Community Week, Issue 469 - 30 April 2010 in full, Click here.

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