UK antitrust authority Competition and Markets Authority (CMA) concluded its investigation concerning long term exclusive agreements entered into by Gridserve relating to the provision of EV chargepoints at motorway service areas ("MSAs") operated by Moto, Roadchef and Extra, based on commitments presented by Gridserve not to enforce certain exclusive rights in agreements with Moto, Roadchef and Extra relating to the installation of EV chargepoints; those three parties also committed not to take any action that would undermine Gridserve's commitments.
Gridserve's exclusive rights cover approximately two thirds of the MSAs in the United Kingdom. The commitments require Gridserve not to enforce those rights after November 2026, and to reduce the length of the exclusive rights in the contracts with Moto by around two years and with Roadchef by around four years.
The CMA's decision recognised the need to strike a balance between incentivising investment in EV charging infrastructure and ensuring that there is sufficient scope for competition in the provision of chargepoints. The CMA acknowledged that, at the nascent stage of a strategically important sector (such as the transition from petrol and diesel cars and vans to electric vehicles), necessary investments can be inherently risky, in particular because of uncertainty regarding the growth of demand. The CMA noted that, in such a context, exclusivity is likely to be problematic where the business that benefits from it holds a position of market power, and that such power might result, in particular, from the existence of a network of exclusive agreements.
The CMA considered that striking an appropriate balance between investment incentives and risk will be facilitated by the Government's Rapid Charging Fund ("RCF") which provides for the investment of £950m of public funds in upgrading the network grid capacity and connections along motorways and key A roads in England. It noted that obtaining RCF funding is likely to be contingent on multiple chargepoint operators ("CPOs") having the opportunity to access RCF-funded capacity at relevant MSA sites through an open, competitive bidding process.
The availability of RCF funding is intended to transfer to the public sector an element of the cost and risk associated with the major investments that are required in order to create extensive EV charging infrastructure on motorways and key A roads, and thereby to facilitate market entry. Reflecting this, the Commitments require the removal of exclusivity at a point when competition would be likely to become more viable at more sites across the United Kingdom because of RCF funding, and when it is anticipated that consumer demand will materially increase.
In an open letter, the CMA has reminded all motorway service area operators and CPOs to ensure that their arrangements comply with competition law and to make any necessary changes to existing commercial arrangements to ensure compliance. The CMA stated that this applies to current and future arrangements for the supply of EV chargepoints in all locations, and not just at MSAs.
(CMA – 08.03.2022)
NAZALI TAX & LEGAL