Ipsofactoj.com: International Cases [2001] Part 7 Case 3 [CAEW]


COURT OF APPEAL, ENGLAND & WALES

Coram

Jobserve Ltd

- vs -

Network Multimedia Television Ltd

LORD JUSTICE MUMMERY

LORD JUSTICE LONGMORE

MR JUSTICE HARRISON

21 DECEMBER 2001


Judgment

Lord Justice Mummery

  1. This is an appeal from an order made on 5 April 2001 by Mr. Peter Whiteman QC sitting as deputy High Court Judge of the Chancery Division. After holding that an interim injunction should be discharged on the ground of material non-disclosure, he exercised his discretion to re-impose the injunction in the terms of an order made by Park J on 4 December 2000 (as varied by an order of Neuberger J on 15 December 2000).

  2. The injunction ordered the defendant (appellant) Jobserve Limited not to do various acts alleged by the claimant, Network Multimedia Television Limited (Network), to be an abuse of a dominant position in the relevant market, including, in particular,

    A.

    refuse to accept advertisements for IT job vacancies from any recruitment agency on the ground that such agency also advertises, has advertised or proposes to advertise IT job vacancies on the World Wide Web site operated by the claimant and known as ATSCOjobs.com and/or from any recruitment agency that is a member of the Association of Technology Staffing Companies Limited ("ATSCo").

  3. The deputy judge held that there was a serious question to be tried both as to whether Jobserve had a dominant position in the relevant market and as to whether it had acted in abuse of that position. He concluded that the balance of justice favoured the grant of an interim injunction.

  4. There is only one point in this appeal: was the judge wrong in holding that there is a serious question to be tried as to abuse of a dominant position? Mr. Khan, on behalf of Jobserve, accepts that there is a serious question to be tried on the issue of Jobserve's dominance in the relevant market, but asserts that the deputy judge ought to have accepted his contention that Jobserve's conduct could never be characterised as an infringement of section 18 of the Competition Act 1998, interpreted and applied, as it must be, in accordance with the decisions of the European Commission and of the Court of Justice (see section 60 of the 1998 Act). Indeed, he argued that the abuse point has already been conclusively determined in favour of Jobserve by the decision of the Court of Justice in Oscar Bronner v Mediaprint [1998] ECR 1-7791 and that the judge erred in law in failing to follow it. He should have held that Network has no cause of action.

  5. The pleadings in the action disclose that there are issues of fact which cannot be resolved at this stage in the action. There will have to be a trial of those issues. For the purposes of this appeal, however, Jobserve has taken the position that, even on Network's version of the facts, Network cannot possibly win this case, because it cannot demonstrate that Jobserve has abused or threatens to abuse an assumed dominant position in breach of section 18. That section provides that

    .... any conduct on the part of one or more undertakings which amounts to the abuse of a dominant position in a market is prohibited if it may affect trade within the United Kingdom.

  6. Both parties operate internet websites providing a service to recruitment agencies in the information technology (IT) sector. Recruitment agencies post vacancies on websites (known as "job boards") for viewing by potential job applicants. An applicant for a job may e-mail a CV direct to the relevant agency. One of the disputes between the parties concerns the definition of the "relevant market." Network contends that it is the market for on-line advertising services for IT vacancies. Jobserve contends that the market is for services for identifying candidates for IT vacancies, including print advertising. That issue can only be resolved at trial.

  7. The dispute arose in this way. ATSCo is a trade association representing the interests of the IT and communications recruitment industry. Its 49 or so members include many of the largest agencies in the UK. Together they account for 50% of the turnover of the IT recruitment market. Almost all of the members of ATSCo have used the advertising services supplied by Jobserve (which is not itself a recruitment agency) to the IT recruitment industry via the medium of an on-line job board on an internet website www.jobserve.com. The site includes a searchable database of job vacancies.

  8. Jobserve has a policy of not accepting advertising from agencies with an interest in job boards. It regards such agencies as competitors rather than as customers. Jobserve now seeks to apply this policy to the members of ATSCo. It is at this point that Network enters upon the scene. It is a publishing company specialising in IT and in the provision of business information services on the internet. It operates a job board website called silicon.com. It is not itself a recruitment agency. It is a new entrant in the on-line job board market, accepting advertisements from recruitment agencies in the IT industry. In June 2000 it entered into an agreement with ATSCo to design, develop, establish and operate an IT recruitment website (www.atscojobs.com.), which includes a searchable database of vacancies. ATSCo members exclusively can advertise their vacancies on Network's website. Jobserve's reaction in November 2000 was to inform recruitment agencies making use of its services and advertising IT vacancies on its website that, if they advertised on ATSCo.job.com., they would not be allowed to advertise IT vacancies on Jobserve's website. Jobserve informed ATSCo that no member using atscojobs.com would be allowed to have any involvement with Jobserve.

  9. Network then applied for an interim injunction to restrain Jobserve from acting in contravention of section 18, principally by its refusal to deal with existing customers who also deal with Network as a new competitor in the market already dominated by Jobserve. Network's case is that, if Jobserve is not restrained from so acting, Network will be prevented from competing with Jobserve: if forced to make a choice, members of ATSCo will stay with the site which dominates the market rather than opt to use a new site attempting to compete with Jobserve.

  10. Mr. Khan's response is that Jobserve is entitled to mount a legitimate defence of its interests against a competitor. It does not impose exclusivity on its customers. They are as free as they always have been to use other independent rival job boards and advertising media. Section 18, he argues, is not infringed by a person refusing to supply its service to those who intend to compete with it. ATSCo has established, via Network's "partnership" relationship with it and its members, a facility to supply the same service as that supplied to members of ATSCo by Jobserve. Section 18 cannot be invoked to force Jobserve to assist a competitor. Jobserve has done nothing to prevent Network from competing against it in the market. It is a case of ATSCo members seeking to exploit their dominance over the field of IT recruitment agencies to gain market dominance in the field of job boards by the use of an alternative website. Network's action in starting these proceedings simply shows a serious loss of nerve on its part in the future of its venture with ATSCo.

  11. In Bronner, which forms the foundation of Mr. Khan's contentions, Mediaprint published daily papers in Austria and it was the owner of Austria's only nationwide home delivery service for its newspapers. Bronner published a competing newspaper. It was not an existing customer of Mediaprint. It had no access to its delivery service. Mediaprint refused to distribute Bronner's paper through its distribution network, even on payment of reasonable remuneration. The Court of Justice held that there was no abuse of a dominant position by Mediaprint. Bronner was unable to establish that Mediaprint's distribution service was indispensable for the carrying on of Bronner's competing business. A refusal to grant a competitor access to a facility was only an abuse of a dominant position where such access was a prerequisite of competition in the relevant market, such as where there was no actual or potential substitute in existence for that home delivery scheme. Mr. Khan contends that Network is unable to show that there is no actual or potential substitute for the services supplied by Jobserve. Indeed, Network's complaint arises out of its own attempts to compete with and to be a substitute for Jobserve.

  12. Like the deputy judge I am not convinced that Bronner necessarily disposes of this case. I agree with him that there is a serious question to be tried on the issue of breach of section 18. As I see it, the present position is this:

    1. In general, abuse of a dominant position is a complex question of mixed fact and law, which should be determined at trial on the basis of tested oral and documentary evidence and rival submissions, rather than in the summary setting of an application for an interim injunction.

    2. I would need to be more confident than I am about the direction of the jurisprudence of the European Court of Justice in the area of abuse of a dominant position before accepting Mr. Khan's submission that Bronner clearly covers this case. As pointed out by Mr. Macnab there are a number of grounds on which it is seriously arguable that this case is distinguishable from Bronner. Those grounds receive some support from a very recent decision of the Court of First Instance in Amministrazione Autonoma dei Monopoli di Stato v Commission of the European Communities ( 22 November 2001 Case T-139/98) at paragraph 68. On its facts Bronner can be treated as an "essential facilities " case i.e. one in which an undertaking is seeking to gain access to an essential facility owned and controlled by a competitor: see Bellamy & Child, European Community Law of Competition (5th ed. edited by PM Roth QC) at paragraph 9-098 et seq. In order to establish an abuse in such a case it has to be demonstrated that, without that access, the claimant could not provide a competing service. Network, however, does not seek to, and has no need to, gain access to any facilities owned or controlled by Jobserve or to use any of the services supplied by it. Network has its own website on the internet by means of which it offers the same service to the members of ATSCo as is already provided by Jobserve and in competition with it..

    3. It is reasonably arguable that Network's real complaint is different from that of Bronner. Network's complaint is about the detrimental effects suffered by it as a result of Jobserve's treatment of its existing ATSCo customers. It requires them to make a choice under threat of refusing to continue to supply them with an existing service. The choice presented by Jobserve to members of ATSCo is between continuing to use Jobserve's facility, which enjoys a dominant position in the relevant market, and using the new competing facility, which Network wishes to establish in the same market. Jobserve has not refused to allow Network to use essential facilities. Jobserve's action against ATSCo members is aimed at destroying, distorting or restricting competition from Network. The action involves Jobserve's use of its dominant position in order to stop its existing ATSCo customers from using a competing service. By that means Jobserve hopes to perpetuate its existing dominance of the relevant market.

  13. At the end of the day Jobserve may turn out to be right. The question at this stage, however, is whether Network's case is seriously arguable. In my judgment, the court below was right to hold that it is. It is neither necessary nor appropriate to say any more than this in order to dispose of this appeal. The deputy judge in a full and careful judgment summarised the submissions of each side and concluded that there is a serious question to be tried. He clearly accepted Network's arguments as pointing to that conclusion. That is sufficient reasoning to support the result on an application for an interim injunction. As the balance of justice was in favour of granting an injunction, it was not appropriate for the court below and it is not appropriate for this court to express a view on the relative strengths of the arguments on the abuse point.

  14. I would dismiss this appeal.

    Lord Justice Longmore

  15. I also agree.

    Mr. Justice Harrison

  16. I agree.


Cases

Oscar Bronner v Mediaprint [1998] ECR 1-7791; Amministrazione Autonoma dei Monopoli di Stato v Commission of the European Communities, 22 November 2001 Case T-139/98

Legislations

Competition Act 1998: s.18

Authors and other references

Bellamy & Child, European Community Law of Competition (5th ed. edited by PM Roth QC)

Representations

Mr. N Khan (instructed by Wollastons for the Appellant)

Mr. A Macnab (instructed by The Simkins Partnership for the Respondent)


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