UK mapping agency Ordnance Survey stands accused of using £800m of government contracts to stifle competition in a row over the release of geographical information as open data.
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Geo-data firm Getmapping claimed Ordnance Survey received illegal state aid in a complaint it lodged at the European Commission (EC) last Friday (7 November 2014). The company repeated similar allegations to those it has tried and failed to stand up with UK authorities a number of times since Ordnance Survey was turned into a quasi-public government corporation in 1999.
Getmapping claimed Ordnance Survey used two 10-year government contracts worth £800m to stifle smaller, private geographical intelligence firms. The complaint seeks to make Ordnance Survey curtail its ambitions so private companies can prosper in its stead. Getmapping said the Department for Communities and Local Government (DCLG) let the contracts wrongfully in 2010 and 2011, because it didn't put them to public tender.
One was the Public Sector Mapping Agreement (PSMA), which pays Ordnance Survey about £60m a year to supply mapping data across government. The other was a 10-year deal to compensate the agency for releasing some of its assets free of charge, under the government's open data scheme. The open data was estimated to be worth £20m a year in lost sales.
Public data and funding
The complaint adds to pressure on the mapping agency as it negotiates its future as a public corporation with its parent, the Department for Business, Innovation and Skills (BIS).
The shift of maps from paper to data created opportunities for startups - 350 of which now do business using Ordnance Survey data. Getmapping chairman Tristram Cary, who filed the complaint, said Ordnance Survey's government contracts were a national scandal because it was using the money to crowd startups out of profitable business opportunities.
"Ordnance Survey has been granted these contracts, which has made it highly profitable - much more profitable than most industry companies. It is using its state aid to compete with the rest of the partner network. Ordnance Survey is a serial abuser of its partners. And the government knows it," he said.
Getmapping's submission to the EC, a copy of which was obtained by Computer Weekly, said: "The core of our complaint is that the state-funded PSMA contracts allow Ordnance Survey to make unreasonably high profits".
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The director of another UK geo-intelligence firm, who asked not to be named, said: "There's a lot of sympathy for the position Getmapping is taking. Ordnance Survey is moving progressively into its partners' domain of activity. The sense is that Ordnance Survey is a very big beast and can eat their lunch. Yet it pays our bills and we have to be nice to it," he said.
Having been threatened with privatisation for decades, Ordnance Survey had been due to announce in September 2014 whether it would undergo further reforms to make it more like a private company. But the decision was put off by a political furore over the earlier privatisation of data assets held by the Post Office and an attempt to partially privatise the Land Registry.
The government had been expected to retain public data assets such as the mapping database, so they could be released under its open data programme. But that strategy was at odds with another policy - to close or sell off public agencies.
Public assets in the private sector
The most valuable public data assets – such as the mapping database, Post Office address list and the Land Registry – are housed in quasi-public agencies called Trading Funds. Launching a review of public bodies last week, the Cabinet Office said Trading Funds were being phased out and would be replaced by more convenient commercial entities.
The government had earlier earmarked Ordnance Survey and Land Registry to become a form of government-owned company less inhibited by public ownership rules from private sector mergers, or from downsizing. But business secretary Vince Cable blocked the move in apparent opposition to the government's privatising reforms.
The Trading Funds were originally cut off from direct funding from taxpayers and made to trade their assets to recover the costs of maintaining them. The open data strategy would have made those data assets wholly public again. The government's digital transformation programme would have made that more feasible, by cutting the high cost of manual, paper administration. But it also made public data assets more attractive to private investors.
Mike Cooper, executive director of the Association for Geographic Information, said the EC complaint focused on a crucial question about Ordnance Survey's future. "The question is, what is its role? It's either a commercial organisation or a national asset. If it's a Trading Fund, then why not privatise it? My personal opinion is that would be a disaster for the country. There are huge benefits in having a nationally-owned geographical base model," said Cooper, a former Ordnance Survey head surveyor.
Getmapping, which has a £1m government contract of its own and also sells data to Ordnance Survey in a contract worth £400,000-a-year, has repeated similar allegations numerous times since its formation in 1999. It lost a court case against Ordnance Survey in 2002. Its government contracts amount to almost half its UK revenue.
DCLG said it cleared the PSMA deal with the Office of Fair Trading after setting the contract up in 2010. A spokeswoman for BIS, which subsequently took ownership of the mapping agency, said in a statement: "We reject the points made in the complaint but it would be inappropriate to comment further before the European Commission has considered it."
An Ordnance Survey spokesman said: "It is not appropriate to comment, given that the matter is now the subject of a complaint to the European Commission."