UK court upholds ICE Trayport sale order

A UK appeals court has upheld a ruling by competition authorities that Intercontinental Exchange must sell Trayport, an energy software trading platform it bought for $650m more than a year ago.

The Competition Appeal Tribunal said late on Monday it backed a ruling by the UK antitrust watchdog that the deal could curb competition in the European energy trading market.

The Competition and Markets Authority’s ruling against ICE last October was the first time the CMA had demanded a company sell an asset it had already bought since the watchdog replaced the merged Office of Fair Trading and Competition Commission in 2014.

Trayport is the main platform that connects traders, brokers and companies to the energy market’s electronic trading and clearing systems. About 70-80 per cent of European utilities trades flows through it. ICE had argued that the CMA’s verdict was “simplistic” and “set a terrible precedent”.

In a statement on Monday ICE said it was disappointed by the CAT ruling. “We will review the CAT’s judgment and consider our options, including the possibility of a further appeal to the Court of Appeal,” it said.

However the Tribunal said the CMA had no grounds to force ICE to unwind an agreement struck with Trayport last May. That would put ICE’s data on Trayport trading screens and offer customers a link to ICE’s clearing house. The CAT said the CMA’s decision on this aspect of the case was “too cursory and too conclusory”. This “represented a serious failure,” the CAT concluded.

ICE and the CMA must now discuss the issues again. “We are hopeful that the CMA will recognise the merits of customers gaining access to additional Trayport connectivity and greater access to relevant markets through the agreement,” ICE said.