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UK Court Hears Motorola’s Appeal Against CMA’s Price Cap on Emergency Service Network

By  |  November 11, 2024

Telecommunications giant Motorola is currently in the Court of Appeal, challenging a decision by the UK’s competition watchdog that limits the amount its subsidiary, Airwave Solutions, can charge for emergency communication services.

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    The Competition and Markets Authority (CMA) initially acted against Motorola two years ago, expressing concerns over what it described as excessive profits within the company. According to Yahoo News, the CMA deemed Motorola Solutions a monopoly provider for the emergency services radio network, Airwave. Airwave, which Motorola acquired in 2016, provides essential mobile communication services for emergency responders throughout Great Britain.

    Following an in-depth investigation, the CMA published its final report in April last year, identifying competition issues in the mobile radio services market that impacted emergency response operations across the UK. According to Yahoo News, the CMA criticized Motorola’s influence over pricing negotiations, stating that the telecom firm “held all the cards.” As a result, the CMA found that the UK’s emergency services were paying nearly £200 million more annually than necessary since 2020.

    To address the findings, the regulator imposed a price cap on Motorola’s charges for Airwave services. This restriction is intended to curb the alleged overcharging and is anticipated to save emergency services approximately £200 million annually. The cap will remain in place until a scheduled review in 2026 and will extend through 2029, unless further action is taken.

    Motorola, however, is resisting the regulator’s decision. It initially approached the Competition Appeal Tribunal (CAT) for a review of the CMA’s ruling. Despite an initial rejection of its case last December, Motorola managed to secure permission to appeal the decision the following month. The appeal now underway could be Motorola’s last recourse for overturning the charge control decision. According to Yahoo News, Motorola’s chief executive, Greg Brown, described the Court of Appeal as the “only last option as it relates to this dispute” during an earnings call in August.

    Motorola has additional legal battles underway, including a separate case against the UK government over an unpaid £14.5 million allegedly owed under a contract to upgrade emergency services communication infrastructure. Filed in April, this lawsuit alleges the government failed to honor its financial commitments on a modernization project critical to public safety.

    The Court of Appeal is expected to weigh Motorola’s challenge against the backdrop of regulatory efforts to ensure fair pricing for essential services used by emergency responders.

    Source: Yahoo News