Ofgem (PDF) says it welcomes this week’s decision by the Competition Appeal Tribunal (CAT), which upheld Ofgem’s finding that National Grid was in breach of competition law for restricting the development of competition in the domestic gas meter market.

Under its contracts with suppliers, National Grid could impose penalties for firms replacing its meters with more advanced smart meters.

In its decision, the CAT ruled that National Grid should face a £30 million financial penalty. Although that’s lower than the £41.6 million fine imposed by Ofgem, it is the highest penalty for abuse of dominance imposed to date in the UK.

The CAT decision also upheld Ofgem’s directions requiring National Grid to bring these multi-million pound contracts into compliance with competition law.

“This case illustrates Ofgem’s commitment to make full use of its powers to tackle abuse and ensure energy markets work effectively for consumers,” said Lord Mogg, Ofgem chairman. “The CAT’s ruling upholds Ofgem’s decision and confirms that National Grid has abused its dominance in the domestic gas metering market, restricting competition and harming consumers.”

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