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Out-Law News 3 min. read

British Horseracing Board wins right to keep database prices high


The British Horseracing Board has won a major court victory in its battle to capitalise on its racing database. The Court of Appeal has overturned a High Court ruling that it had used its market dominance to over-charge a TV station for information.

The judgment ruled that despite being a dominant player in the market for racing information, BHB was entitled to charge high fees for its information because its customers could, in turn, make significant income from the data.

The BHB, which is the governing authority for British horseracing, compiles databases of all the runners and riders in horse races up and down the country and sells the right to use and republish those lists to bookmakers, newspapers and television stations. The lists are made available for publishing the morning before the race.

Companies that are said to have a dominant market position are held to more stringent rules when it comes to competition law than other companies.

The High Court found that the BHB had a dominant market position in the supply of its information, and that it used that to charge too high a price for that information to web business and overseas betting company Attheraces.

Attheraces Ltd is a joint venture between media and racing companies BSkyB, Arena Leisure, Ascot Racecourse and other racecourses. It challenged the BHB and won its case in 2005, but lost on appeal last week. It is believed likely to seek permission to appeal to the House of Lords.

Attheraces had argued that the price of information should be decided by working out the cost of producing it and adding on a reasonable profit margin, a mechanism which was backed by the High Court.

The Court of Appeal, however, ruled that that BHB was entitled to justify high prices by looking at the economic benefit that the information would bring to its customer, in this case Attheraces.

Angelo Basu, a competition law specialist at Pinsent Masons, the law firm behind OUT-LAW.COM, said: "BHB wanted to charge Attheraces 50% of the profit that it made from Attheraces' use of the database rather than just a mark up on the cost to BHB of producing the database and Attheraces thought that this was an excessive price and an abuse of BHB's dominant position."

"The Court of Appeal turned around and said no, you don't just have to look at it in terms of cost. Instead, it focused on the question of the commercial use to which Attheraces would put the information," said Basu. "The proper questions were, what is the economic value to Attheraces of the information and can the price charged by BHB be justified in that context? If it could, it would not be abusively excessive."

The Court of Appeal ruled that it could, and that such an approach was reasonable.

The case also touched on the controversial issue of database rights, and slightly strengthened the BHB's rights to exploit its own database.

The courts have had to decide before exactly what database rights mean, in cases involving BHB. In a landmark ruling of 2004 the European Court of Justice ruled that bookmaker William Hill did not violate the BHB's database rights when it published runners and riders lists online.

The ECJ found that the amount of information carried by William Hill relative to the whole database was not substantial. The database rights that the BHB sought to protect are relative to the investment that an organisation puts into a database's creation and maintenance. Here, too, the ECJ said the investment was not substantial.

The ECJ drew a distinction between the investment involved in creating horse races, which necessarily involved creating lists of runners, riders, form information and pedigree data, and the putting of that information into a database. The BHB, it said, could not claim that all of its activity in putting on horse races was solely for the purposes of creating a database.

The ECJ said that the resources used by the BHB in the course of organising horse races, to decide the date, the time, the place and or name of the race and the horses running in it, represented investment in the creation of the materials contained in its database, which is not relevant in terms of the Database Directive's protection.

In the Attheraces case, though, the Court of Appeal said that BHB did not need a formal database right in order to conduct commercial exploitation of its rights. The Court's decision confirms that even where it has no database rights or other intellectual property, an organisation still has the right to commercially exploit the information it maintains, without such commercial dealing being considered an abuse.

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