The Competition Authority yesterday threw out a complaint by the grocers' lobby RGDATA, which claimed that Vodafone was abusing its strength in the market by cutting retailers' commission for top-up cards.

The authority said no abuse of the Competition Act had taken place in relation to the commission, even though some retailers were passing a handling fee on to consumers to compensate for the cut.

But in a letter to RGDATA, the authority held out the possibility of action against Vodafone if it was proved that the phone company was applying dissimilar conditions to separate retailers. The examination of that complaint was continuing, said an authority member, Dr Paul Gorecki.

The ruling was dismissed by RGDATA, whose director general, Ms Ailish Forde, accused the authority of being "hopelessly confused" on the matter.

"The actions of big companies like Vodafone have an enormous impact on smaller businesses and consumers.

"The Competition Authority seems content to pursue fine economic models based on efficiency, but ignores some of the true and real consequences of competition," she said. "This authority is useless for small and medium-sized enterprises."

The case centres on moves by Vodafone this summer to reduce to 6.5 per cent the 10 per cent commission it previously paid on €10 and €15 electronic top-ups for pre-paid mobile phones. Thirty individuals and groups complained to the authority.

Dr Gorecki said that, after his investigation, the "facts" he had established did not support an abuse of dominance. He also pointed out that many retailers did not charge the handling fee and said that top-up credit could be bought online and at bank machines.

In addition, he said, Vodafone had stated that its cost savings would be ploughed back into investment in its network.

But Ms Forde said the authority "must still believe in the tooth fairy if they genuinely believe Vodafone".

Her complaints were in turn dismissed by a spokesman for the authority.