"Competition is not about protecting your competitor's established business model"

Monday 09 October 2017

A landmark case involving ATF Fuels and the Jersey Competition and Regulatory Authority (JCRA) has concluded and the Bailiff and two Jurats hearing the case are now considering their decision.

ATF Fuels was appealing a 2016 decision by the regulator, the Jersey Competition and Regulatory Authority (JCRA) who found that the company had abused a dominant market position by refusing to supply Aviation Beauport with fuel for resale, and by charging them more than previous suppliers.

Advocate John Kelleher, who was representing ATF Fuels, told the court that if the fuel provider had agreed to the arrangement sought by Aviation Beauport - fuel purchased at a discounted price from ATF Fuels would have been sold on to its customers with a margin - and customers would have found themselves worse off because they would be charged more. ATF would also have found itself with less revenue, which again could potentially have affected customers with them being forced to pay more. Advocate Kelleher said: "The only ones to be better off would have been Aviation Beauport. That is not what competition is all about. It is about the customers getting the best service at the best price. It is not about protecting your competitor's established business model at the customers' expense." 

He added that the JCRA's decision was based on the idea that customers were losing out because ATF Fuels came into the market. He said: "There is no choice for the customers if the choice is between excessive prices charged by Rubis and excessive charges charged by Aviation Beauport." He argued that from the first day of ATF Fuels being in operation, consumers were getting a better deal as they reduced the price of fuel by 15p per litre and the margin by 14p. 

Pictured: The case was heard in the Royal Court.

He also said that there was no proof that ATF Fuels was not willing to let Aviation Beauport act as an agent or that they had made an attempt to eliminate downstream market. He said that Aviation Beauport's market was not weakened either as all customers could obtain aviation fuel and even use Aviation Beauport as a customer's agent.

Earlier in the day, Advocate Nigel Sanders, representing the JCRA, said that their decision was not wrong because ATF Fuels did discriminate against Aviation Beauport by refusing to deliver fuel. He added that the successive offers made for an arrangement between the two companies were detrimental to Aviation Beauport, as they were being charged more than they were before or being invoiced for any fuel not uplifted. 

He added that other companies who were buying considerably less aviation fuel than Aviation Beauport were paying less and were offered better conditions. He argued that ATF Fuels was using the same equipment between unscheduled and scheduled deliveries, and that the latter always got priority, and that as such there was no reason for a difference in price. He said: "Big customers were getting a deal. Aviation Beauport was the only one paying more than they once were. The only single entity who was asked not to have a supply and who was getting the worst deal was Aviation Beauport."

Pictured: Advocate Nigel Sanders told the Court that it was Aviation Beauport that got "the worst deal."

Both parties concluded their submissions on Friday. The Bailiff, Sir William Bailhache, who heard the trial with Jurats Colette Crill and Jerry Ramsden, will now retire to consider their decision on the judgment, which will then be published.