A recent judgment by the Competition Appeal Tribunal has resolved a damages claim brought by Global-365 against PayPoint regarding alleged exclusionary conduct in the British energy prepayment market. Global-365 argued that it was effectively barred from the market for over-the-counter (OTC) energy prepayment services between 2018 and 2021, a period marked by the high-profile rollout of smart meters across Great Britain. The claimant contended that while PayPoint’s dominance was built on legacy physical infrastructure, the shift to digital smart technology should have leveled the playing field for new entrants. Instead, Global-365 alleged that PayPoint utilized restrictive exclusivity clauses in contracts with both energy suppliers and retailers to maintain its grip on the sector and stifle the growth of competing products like its own SMARTprepay platform.
In its assessment of the market dynamics, the Tribunal determined that PayPoint did indeed hold a dominant position in the OTC prepayment market from 2009 until 2018. This dominance was found to have shifted following the merger of the Post Office and Payzone, after which PayPoint was no longer considered dominant. However, the Tribunal agreed with the claimant that PayPoint’s use of exclusive purchase obligations and convenience exclusivity provisions constituted an abuse of that earlier market power. These practices created what the court described as a “step-function” in the market, which hindered the ability of competitors to build the necessary network of retailers or secure a large enough portfolio of energy suppliers to sustain a viable business.
Despite finding that PayPoint’s conduct was exclusionary, the Tribunal’s conclusions on causation and damages differed sharply from the figures proposed by Global-365. While the claimant sought over £113 million in lost profits and terminal value, the Tribunal found that Global-365 was only prepared for a material commercial rollout by early 2019, rather than 2018. Furthermore, the court remained unconvinced that SMARTprepay was a sufficiently robust or attractive product for large-scale “Big Six” energy suppliers, who prioritize extreme reliability. Consequently, the Tribunal ruled that Global-365 only lost a modest 20% chance of securing business specifically from smaller, tier-three energy suppliers.
The final financial award reflected this narrower scope of loss. The Tribunal assessed Global-365’s actual damages at £169,334, a fraction of the original multi-million pound claim. This sum is to be paid alongside simple interest set at 2% above the Bank of England’s base rate, calculated from the start of 2020. This ruling underscores the high legal threshold for proving that innovative new products would have achieved mass-market success, even in environments where dominant incumbents are found to have engaged in anti-competitive behavior.
