NCR's terms for licensing ATM software

Office of Fair Trading (OFT) closed Competition Act 1998 case.

From:
Competition and Markets Authority
Published
29 January 2007
Case type:
CA98 and civil cartels
Case state:
Closed
Market sector:
Electronics
Outcome:
CA98 - no grounds for action
Opened:
1 June 2005
Closed:
29 January 2007

Case information

Party: NCR Corporation (NCR)

Issue: The terms upon which NCR licenses certain of its ATM software and provides other support to software developers and whether NCR should make certain interface information available

Relevant provision: Chapter II prohibition, Competition Act 1998 and Article 82, EC Treaty

Outline of the case

In early 2005, Korala Associates Limited (KAL) [note 1] submitted a formal complaint to the OFT alleging that NCR had abused a dominant position through various forms of exclusionary conduct. In particular, KAL alleged that NCR had abused its dominant position by:

  1. discriminatorily refusing to supply KAL with licences and other support on terms similar to those offered to other ATM software [note 2] developers for the purpose of testing and developing Application Software on NCR ATMs, and

  2. refusing to supply KAL with the interface information necessary to develop Platform Software [note 3] for NCR ATMs.

In June 2005, the OFT commenced a formal investigation and sought information from: NCR; KAL; other ATM manufacturers and software developers and some of the main purchasers of ATMs in the UK, namely banks and Independent ATM Deployers (IADs).

As part of its investigation, the OFT also surveyed a number of ATM software and ATM hardware suppliers across the world to gauge whether there was industry interest in developing Platform Software for NCR ATMs and whether there was likely to be demand for this from banks and IADs.

The OFT would have needed to undertake further work to reach a concluded view on whether or not NCR’s alleged conduct was in breach of the Chapter II prohibition of the Competition Act 1998 and/or Article 82 of the EC Treaty.

The OFT referred to its prioritisation criteria [note 4] and weighed up the potential benefits of pursuing the NCR investigation against the potential benefits of diverting resources from other cases. Particular considerations for the OFT included:

  • the likely level of any consumer detriment arising from NCR’s alleged conduct appeared to be considerably less that the OFT initially thought
  • the fact that most of the banks and IADs whom the OFT contacted did not voice major concerns, and the volume of additional work bearing in mind that increasingly, the evidence the OFT needed was information held by parties based outside the EU.

In light of these factors the OFT decided to close the NCR investigation on the grounds that it was no longer an administrative priority.

Case reference: CE/5628-05

Notes

  1. KAL has expressly permitted the OFT to reveal its identity as the complainant.
  2. Application Software is the software which controls key ATM functions such as when to dispense cash and screen graphics.
  3. Platform Software is the basic software in an ATM that provides the platform with which other software communicates.
  4. Competition prioritisation framework
Published 29 January 2007