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Dominance

Dominance in the telecommunications sector: An overview of EU and national case law

Cani Fernández and Irene Moreno-Tapia, 4 September 2013, e-Competitions Bulletin Telecom & Dominance, Art. N° 42836.

See Irene Moreno-Tapia's resume See Cani Fernández's resume

It is an honor for us to write this 2013 updated introduction to the e-Competitions special issue on Dominance in the Telecommunications Sector. We welcome this initiative and are grateful to have the opportunity to assess the work of competition authorities in this field over the last 12 years.

In addition to market dominance and the abuse of it being extraordinary and fascinating topics, they also represent an indisputable challenge for competition authorities when it comes to the assessment and the application of these concepts in a sector such as telecoms. We can identify, at least, the following reasons:

(i) The markets in question are of a technical and sophisticated nature, and are rapidly evolving and subject to continuous, high-speed changes.

This has a particular impact on the definition of the markets, which can easily vary within short periods of time, and on the position of the players therein. As a result, precedents have limited relevance where the determination of dominance is concerned.

Also, the convergence of media –i.e., separate services converging into single packages such as VoIP, IPTV and Mobile TV- gives rise not only to new markets, but also to new types of conduct. This phenomenon directly affects the constantly evolving concept of abuse.

(ii) Telecommunications is a recently liberalized sector.

In some cases, markets still require sector-specific regulation to assure a proper transition to a competitive environment. Competition law co-exists with regulatory legislation, and competition authorities share competences with telecoms regulators. This raises interesting jurisdictional issues, which are repeatedly invoked by dominant operators to contest the opening of competition procedures on practices subject to sector-specific regulation.

As we will comment below, the European courts have settled this issue in the Deutsche Telekom, TeliaSonera and Telefónica rulings, and national competition authorities have followed their example.

(iii) EU directives and ex ante regulation condition to a large extent the behavior of undertakings holding significant market power in the relevant markets.

Competition authorities must take that framework into account when assessing alleged abuses [1].

(iv) Entry into the telecoms sector requires substantial investment and sunk costs while former monopolists rely on existing and mostly amortized infrastructure. In addition, the latter are vertically integrated and operate in a large number of closely related markets.

This directly concerns the determination of dominance, as such features imply competitive advantages for monopolists as compared to new entrants in mature markets (e.g., telephony); they also facilitate the involvement of former monopolists in newly emerging technologies and markets.

The abovementioned circumstances make the telecoms sector a particular one in terms of competition law in general, and in terms of abuse of a dominant position in particular. They also explain why, in spite of harmonization at EU level and the significant role of ex ante national regulation, there is still sufficient room for competition authorities to intervene.

1. Overview

We have analyzed over 160 case summaries on European and national decisions before administrative bodies and courts concerning the application of article 102 of the Treaty (TFEU) and the corresponding national provisions in the telecoms sector [2]. We will try here to focus on the most — in our view — interesting issues dealt with in such cases, comparing, where possible, the European and national scenarios.

It has been an intensive period in terms of production, particularly at national level, which proves the success of decentralization. However, it also highlights the flaws of the liberalization process that started in 1998, in particular when considering the types of conduct most investigated throughout Europe (i.e., margin squeezes and refusal of supply/access). We may wonder how the liberalization process would have evolved had EU legislation imposed the separation between networks and services from the beginning, as in other sectors (e.g., energy).

Since 1998, the European Commission has imposed fines in only four cases concerning abuse of dominant position in the telecoms industry [3] : Deutsche Telekom (EUR 12.6 million) [4], FT/Wanadoo (EUR 10.35 million) [5], Telefónica (EUR 151.88 million) [6] and Telekomunikacja Polska (EUR 127.6 million) [7]. The three first decisions concern pricing practices (margin squeeze and predatory pricing), whereas the latter covers access issues [8]. Despite this limited experience at European level, it has had a huge impact on national authorities and courts, which largely refer to European cases and guidelines.

Indeed, national decisions and judgments very rarely depart from the European practice. The most striking exception is perhaps the Decision of the Spanish Competition Authority in the Uni2/TME/Airtel/Amena case (2004) [9] where a complaint over a margin squeeze practice was dismissed. The body in charge of the investigation [10] found that TME had indeed committed a margin squeeze; however, the final decision held that no abuse was to be found, mainly because the termination fees had been determined by the National Regulatory Authority [11] and because, in the case of provision of integrated services, it was impossible to allocate costs for each service.

Surprisingly, the Spanish Competition Authority mentioned that there were few decisions on margin squeeze practices but that these were not related to the telecommunications sector. However, after the complaint was filed, and long before the final decision was adopted, the European Commission had already imposed high fines on Deutsche Telekom and FT/Wanadoo. In fact, two members of the board of the Spanish Competition Authority issued a dissenting opinion, explicitly referring to the Deutsche Telekom case [12].

Another similar exception is the interim decision of the Belgian Competition Council on the Belgacom/Tele2 case (2006) [13], in which a request of interim measures against an alleged margin squeeze was rejected on similar grounds. In this case, the decision was annulled by the Brussels Court of Appeal. Recently, the Belgian Competition Council, departing from the Prosecutor’s report, has decided that there are no grounds for action against Belgacom since the “equally efficient operator” test did not reveal any evidence of price squeeze [14].

Another noteworthy decision is the Swiss Supreme Court’s ruling of April 11, 2011, confirming the annulment of a fine exceeding EUR 200 million on Swisscom for imposing excessive termination rates on its competitors. The Court upheld the Federal Administrative Court’s view that Swisscom could not “impose” excessive pricing on its competitors, as they could have filed a complaint with the telecom regulator to challenge Swisscom’s termination rates [15].

2. Competition authorities and sector regulators

National regulatory authorities (i.e., telecoms regulators) must enhance competition in the provision of electronic communications networks, services and associated facilities and services, with the aim of contributing to the development of the internal market, and promoting the interests of the citizens of the European Union in this sector.

Accordingly, they are required to monitor the transition from monopoly to full competition. When a telecoms regulator concludes that there is not effective competition within a particular telecoms market [16], it may impose appropriate obligations or remedies on undertakings considered to individually or jointly hold significant market power. Such remedies may vary in light of the identified competition problems, but generally refer to obligations of access to and use of specific network facilities, price control and cost accounting obligations. The undertakings concerned must abide by such obligations.

It is no surprise that companies subject to competition investigations often use regulatory interventions to justify their conduct. According to their logic, they cannot be punished for complying with regulatory obligations, even if such obligations amount to abusive practices.

This issue was explicitly assessed in the Deutsche Telekom case. The European Court of Justice finally confirmed that “[i]t is common ground that that regulation did not in any way deny the appellant the possibility of adjusting its retail prices for end-user access services or, therefore, of engaging in autonomous conduct that is subject to Article[102] EC, since the competition rules laid down by the EC Treaty supplement in that regard, by an ex post review, the legislative framework adopted by the Union legislature for ex ante regulation of the telecommunications markets [17].

This view is generally followed by national competition authorities [18]. To begin with, the extremely high number of cases dealt with and penalized by competition authorities shows that the existence of regulators with seemingly conflicting competences does not hinder the full application of competition law in the telecommunications sector [19].

This does not mean that the regulatory legislation is of no relevance at all in cases of abusive practices. The European Commission itself applied a 10% reduction on the fine for Deutsche Telekom on the grounds that “the retail and wholesale charges in question in the current proceeding were subject to sector specific regulation since 1988 on national level until today [20]. Similarly, the Italian Supreme Administrative Court has stated that the prior regulatory authorization of the contractual terms in question prevented the qualification of the infringement as serious [21]; the Portuguese Competition Authority, in a discrimination case, considered as a mitigating circumstance the sector regulator’s decision not to oppose the coming into effect of the scale of changes established by PT [22]. The French Competition Council , when imposing a EUR 181.3 million fine on Orange (France Télécom) and SFR for implementing abusive rate differentiations, considered that a change in the regulatory framework had encouraged the practices and accepted a 50% reduction of the basic amount of the fines [23].

Competition authorities are fully aware of their role in this sector. Indeed, they sometimes have admitted that the telecoms regulator was better placed to intervene by means of ex ante regulation [24].

Although the situation seems to be clear, as a consequence of the duality of authorities with competence in this sector, there is still a certain risk of contradictions and conflicts. EU legislation in the sector of telecoms imposes on the regulatory authorities consultation and close cooperation with national authorities entrusted with the implementation of competition law; however, this may not be enough when it comes to ensure effective competition before it is too late (e.g., new entrants are compelled to leave the market). Entrusting a single authority with ex ante and ex post competences in all sectors might be, in our view, the best solution to ensure compliance with this objective [25].

3. Determination of dominance

The existing guidelines and decisions of the European Commission in relation to the definition of the market and the determination of dominance have proved to be extremely useful for national competition authorities to carry out their assessment [26].

Market shares are mostly used at national level — by both competition authorities and courts — as a relevant proxy, but the assessment very often include other factors, such as competitor’s shares and evolution, control over essential facilities [27], barriers to entry, and limitations imposed by regulation [28].

Reports by regulatory authorities issued on a regular basis with an overview of the liberalization progress, and the current status of the market and its functioning, where significant market power is also identified, have been used by competition authorities as a basis for their findings on dominance [29].

4. Abuse and standard of proof

The decisions that we have analyzed cover a wide range of different types of conduct, including very often — given the particularities of these markets — refusals of supply or access [30], discrimination [31], and pricing practices [32]. Less frequently, cases concern tying or bundling [33], exclusivity [34], fidelity rebates [35], consumer misleading [36], and cross-subsidizing [37]. Margin squeeze is undoubtedly the most investigated type of conduct [38].

The case probably most reviewed in France concerns a margin squeeze practice: it is the SFR-France Télécom saga [39]. In 2004, the French Competition Authority had imposed a fine on France Télécom and SFR. The Court of Appeal reversed the decision in 2005, arguing that “the French Competition Authority should have established that alternative operators could not avoid the direct interconnection for incoming calls and therefore they had no means to escape the margin squeeze, in order to establish that France Telecom and SFR infringed abuse of dominance provisions [40]. The Court of Appeal so established that margin squeeze was abusive only if facilities provided by the dominant firm were indispensable.

The French Supreme Court referred the case back to the Court of Appeal, whose judgment was again appealed.

The Supreme Court finally stated in 2009 that the margin squeeze’s anti-competitive effect arises “if a potential competitor, as efficient as the dominant vertically integrated firm, can only enter the downstream market by suffering losses. Such an effect can only be presumed when the facilities provided by the dominant firm to its competitors are indispensable in order for the new entrant to compete in the retail market [41]. The Supreme Court did, therefore, not exclude that the practice can be abusive even where the wholesale facilities are not indispensable.

This ruling anticipated the European Court of Justice’s response on the TeliaSonera preliminary ruling of February 2011, which concluded in identical terms.

Indeed, the Court stated that “[w]hen assessing whether [a practice of margin squeeze] is abusive, all of the circumstances of each individual case should be taken into consideration. In particular, […] it is necessary to demonstrate that, taking particular account of whether the wholesale product is indispensable, that practice produces an anti-competitive effect, at least potentially, on the retail market, and that the practice is not in any way economically justified [42]. The Court explained that where access to the supply of the wholesale product is indispensable for the sale of the retail product, “the at least potentially anti-competitive effect of a margin squeeze is probable”; it is for the national court to verify whether, where the wholesale product is not indispensable, the practice may be capable of having anti-competitive effects on the markets concerned [43].

The French Court of Appeal finally annulled the decision of the French Competition Authority in January 2011. It considered that the facility supplied by the dominant operator could not be seen as indispensable and, therefore, the anti-competitive effect could not be presumed. The Court of Appeal based its conclusions only on the losses suffered by competitors of the dominant firm and indicated that “the French Competition Authority had not provided enough evidence of the exact losses suffered by potential competitors as efficient as the dominant vertically integrated firm for the purposes of entering the wholesale market [44].

It still seems that the Court of Appeal may be imposing a too strict standard of proof on the Competition Authority (“enough evidence on the exact losses suffered”). The French Supreme Court confirmed this approach in its ruling of January 17, 2012.

The Retevisión/Telefónica case in Spain is worth mentioning in relation to the standard of proof applicable to abuse [45]. In 2003, the Spanish Competition Authority fined Telefónica approximately EUR 8.4 million for the launch of an advertising campaign for special subscription fares. The advertising campaign was launched shortly after the beginning of the process for the liberalization of the telecoms sector in Spain. The invested amount exceeded the costs of any previous campaign ever undertaken by Telefónica. By the time the campaign was launched, such offers had not received the compulsory administrative authorization from the Spanish government; actually, some of the fares advertised did not finally receive such authorization.

The Court of Appeal (Audiencia Nacional) upheld the decision, but reduced the fine to EUR 901,500. The Supreme Court [46] annulled the decision on the grounds that the economic position of the potential competitor (i.e., Retevisión) was relevant to decide whether the campaign established a barrier for access to the market. For the Supreme Court, such barrier did not exist, because Retevisión was able to reproduce Telefónica’s investment in advertising.

This ruling overlooked that the European Courts’ case law had already established that the mere intention to exclude competitors of the dominant company can imply the existence of an abuse [47]. Similarly, the recent judgment of the European Court of Justice in the TeliaSonera case indicates that the anti-competitive effect does not necessarily have to be concrete, being sufficient to demonstrate that there is an anti-competitive effect which may potentially exclude competitors.

The Spanish Supreme Court also ignored the long-standing case law [48], stating that dominant firms have a special responsibility not to allow their conduct to impair genuine undistorted competition on the common market. Although dominant firms are entitled to protect their own commercial interests when they are attacked, and whilst such undertakings must be allowed the right to take such reasonable steps as they deem appropriate to protect those interests, such behavior cannot be allowed if its purpose is to strengthen that dominant position and thereby abuse it. Accordingly, Telefónica —dominant firm — and Retevisión — or any other company in the process of accessing the market — could not be placed in comparable situations. Only Telefónica held a special responsibility not to hinder the liberalization process; however, as internal documents showed, its conduct went far beyond the defense of its commercial interests and was clearly intended to delay entry.

On the basis of this case, the Audiencia Nacional later annulled a decision by the Spanish Competition Authority fining Telefónica EUR 57 million, on the grounds that there was not enough evidence that Telefónica’s behavior (i.e., launching an advertising campaign that denigrated its competitors for not offering some services related to the network) had increased Telefónica’s market share in detriment of those of its competitors.

On the basis of these judgments, one could think that Spanish courts are adopting an effects-based approach in cases of abuse of a dominant position, although a wider analysis should be undertaken in order to reach such a relevant conclusion. In the Telefónica case, the European General Court, in its judgment of March 12, 2012, the European General Court recalled that “for the purposes of establishing an infringement of article [102], it is sufficient to show that the abusive conduct […] tends to restrict competition […]. The pricing practice concerned must have an anti-competitive effect on the market, but the effect does not necessarily have to be concrete, and it is sufficient to demonstrate that there is a potential anti-competitive effect that may exclude competitors who are at least as efficient as the dominant undertaking [49].

5. Fines and recidivism

There is not much to say in relation to the level of fines [50]. Considering the size of former monopolists, together with the seriousness of the types of conduct investigated, fines are usually very high [51].

An interesting point regarding the fines concerns the recidivism in a sector where incumbent operators have been found to have committed abuse repeatedly. As established by the European Court of Justice in its judgment on the Danone case [52], “the repeated infringement was not only a relevant factor but also a particularly important factor and a very significant indication of the gravity of the infringement for the purpose of assessing the amount of the fine in the context of effective deterrence.

Two similar cases illustrate the application of recidivism. The Spanish Competition Act [53] considers “the repeated commission of infringements” an aggravating circumstance. Accordingly, the Competition Authority’s Communication on Fines establishes that “repetition” implies a firm administrative or judicial decision, i.e., not subject to further appeal, establishing the previous infringement within the previous 10 years [54].

This evokes the appeal in the Retevisión/Telefónica case, mentioned above. To set the fine, the Competition Authority had taken into account that Telefónica had been fined five times before. However, the Audiencia Nacional stated that no previous decision could be taken into account for the purposes of setting the fine as long as any relevant prior fine was not definitive — all previous decisions were under appeal at the time — and, accordingly, meanwhile previous decisions merely “give an impression” of a repeated infringement.

A similar approach to the Spanish one was followed by the French Competition Council (“the Conseil”) in the France Télécom/Wanadoo case [55]. The Conseil established the conditions for a repeated infringement: a previous final decision having fined the practice, identical or similar practices, and the time period elapsed between the two decisions should also be taken into account. To assess whether the practices are identical or similar, it is sufficient that both practices have an anti-competitive effect [56]. The Conseil increased the fine by 50%, and still France Télécom was fined EUR 27.6 million nine months later for abuse in the landline and internet access markets in Guadeloupe, Guayana, Martinique and Réunion [57]. In December 2012, the Conseil increased a fine on France Télécom by 50% due to prior confirmed convictions (six in the preceding 15 years), finally imposing EUR 117.4 million for abusive price differentiation [58].

The requirement that the previous decision be final in order to apply recidivism as an aggravating circumstance is objectionable. Considering the average time to have a firm decision [59], the aggravating circumstance of recidivism may have an extremely limited application, in detriment of the effective deterrence referred to by the European Court of Justice.

The national approach conflicts with the European Commission’s practice and with European case law. The Commission’s Guidelines on the method of setting fines [60] merely refer to the Commission or a national competition authority having made a previous finding that the undertaking infringed Article 102 TFEU. The European Court of Justice has supported this approach, stating that “the Commission is entitled to take account of repeated infringement that the undertaking has previously been found guilty of an infringement of the same type, even if the decision is still subject to review by the courts [61].

The Court wisely affirmed that infringers would otherwise be encouraged to bring purely dilatory actions with the sole purpose of avoiding the consequences of recidivism whilst proceedings were pending before the European courts.

6. Conclusion

The telecoms industry is with no doubt abundant in cases of abuse of a dominant position. It is fortunate that, save a few exceptions, national competition authorities are aligned with European practice and case law, at least where the basic features and the need to secure effective competition are concerned. The European Competition Network and the cooperation among authorities therein have probably played a relevant role in that situation, together with the guidance of the European Commission and the authority of the European Court of Justice.

It is to be expected that competition enforcement will continue strongly at national level (in spite of the heavy fines so far imposed), as the liberalization process is still ongoing.

Footnotes

[1See paragraph 82 of the Commission’s enforcement priorities in applying Article 102 of the TFEU to abusive exclusionary conduct by dominant undertakings (OJ C45, 24.2.2009, pages 7-20).

[2The period covered is 2002 to mid-2013.

[3In that period, two other complaints were rejected: on July 2, 2010, in case COMP/C-1/39.653, the European Commission rejected a complaint by Vivendi against France Télécom on account of alleged discriminatory practices and excessive prices in the French fixed-line and internet markets (this rejection has been appealed before the European General Court, pending case T-432/10). On March 29, 2012, in case COMP/39.892, the European Commission rejected a complaint against Numericable Luxembourg regarding refusal to supply and unfair prices in the fixed-line, internet and cable television markets. Both complaints were rejected for lack of Community interest.

[8The European courts have so far confirmed the European Commission’s decisions. The Deutsche Telekom decision was sustained by both the European General Court (case T-271/03) and the European Court of Justice (case C-280/08P), and further confirmed in the TeliaSonera ruling (Judgment of the European Court of Justice of February 17, 2011, case C-52/09 – see Anne-Lise Sibony, Margin squeeze : The CJEU rules that an abuse of a dominant position in the form of margin squeeze may be constituted even where intermediary services do not constitute an indispensible input for new entrants on the downstream market, provided potential exclusionary effect is established (Konkurrensverket v. TeliaSonera), Concurrences, n° 2-2011 and Jaime Garcia-Nieto, Jordi Casanova Tormo, The European Court of Justice holds a preliminary ruling in a margin squeeze case in the telecomunications sector (TeliaSonera Sverige), 17 February 2011, e-Competitions, n° 36666). The FT/Wanadoo case was also confirmed by the General Court (case T-340/03) and the European Court of Justice (case C-202/07 P – see Iratxe Gurpegui Ballesteros, Agnes Szarka, The European Court of Justice rules that proof of recouping losses is not required in predatory pricing cases (France Telecom, Wanadoo Interactive), 2 avril 2009, Art. n° 35037). The General Court dismissed Telefonica and Spain’s appeals against the Telefónicadecision in March 2012 (cases T-336/07 and T-398/07 – see Hendrik Auf’mkolk, The EU General Court dismisses Spanish telecom incumbent’s appeal against a Commission decision that imposed a €151 million fine on the company for a margin squeeze in the regulated national broadband market (Telefonica/Commission), 29 March 2012, e-Competitions, n° 45020). It is now pending appeal before the European Court of Justice (case C-295/12P). An appeal is also pending against the Telekomunikacja Polska decision (case T-486/11).

[10It was then called Servicio de Defensa de la Competencia (Service for the Defense of Competition); it is now the Dirección de Investigación (Investigation Directorate).

[11Comisión del Mercado de las Telecomunicaciones.

[16That is, in markets where one or more undertakings have significant market power, and where national and EU competition law remedies are not sufficient to address the problem.

[17Paragraph 92 of the judgment in case C-280/08P.

[18See, for instance, the decision by the Slovak Council of Competition of December 21, 2005, Slovak Telecom, although annulled on different grounds (See Robert Neruda, The Slovak Council of the Competition authority imposes significant fine for repeated abuse of dominant position by not granting access to essential facilities (Slovak Telecom), 21 December 2005, e-Competitions, n° 21310); the judgment of the Italian Supreme Administrative Court of March 10, 2006, Telecom Italia/Albacom-Colt Telecom-Tiscali (See Paolisa Nebbia, The Italian supreme administrative Court confirms a decision of the NCA condemning the formerly State-owned telecommunications monopolist for the abuse of its dominant position on the market of the fixed network telecommunications services for business customers (Telecom Italia/Albacom - Colt Telecom - Tiscali), 10 March 2006, e-Competitions, n° 1146); the decision of the Spanish telecoms regulator of November 16, 2006, Telefónica (See Pedro Callol, Jorge Manzarbeitia, The Spanish telecommunications regulator fines the incumbent € 20 M for abuse related to access to the subscriber loop but raises questions on its relationship with Spanish NCAs regarding competition law enforcement (Telefonica), 16 November 2006, e-Competitions, n° 13773); and the decision by the Portuguese Competition Authority in September 2008, PT Comunicações (See Luis D. S. Morais, The Portuguese Competition Authority fines the telecom incumbent for abuse of a dominant position raising the issue of the interplay between the application of national and EC competition laws and application of ’ex ante’ sectoral regulation (PT Comunicacoes), 1 September 2008, e-Competitions, n° 25895). In its judgment of November 7, 2012, the Macedonian High Administrative Court ruled out any conflict of interest between the Competition Authority and the sectorial regulator, stating that the affected company itself had never questioned the competence of the Competition Authority (See Alexandr Svetlicinii, The Macedonian High Administrative Court upholds the decision of the Macedonian Competition Authority prosecuting the incumbent telecom operator for establishing high prices for its digital lines leased to the rival Internet providers (Macedonian Telecom), 7 novembre 2012, Art. n° 50877).

[19However, in February 2011 the Bulgarian Supreme Administrative Court ruled that communications, being a regulated industry, fell outside competition scrutiny (see an extensive and interesting analysis of this judgment in Anton Dinev, The Bulgarian Supreme Administrative Court upholds an NCA decision finding no infringement of Art. 102 TFEU in a case involving concurrent application of competition rules and communications regulation (BTC Cable Ducts), 15 February 2011, e-Competitions, n° 38336).

[20Paragraph 221 of the European Commission decision.

[23Decision of the French Competition Council of December 13, 2012 (e-Competitions no. 50852). This decision has been appealed.

[25Spain has recently followed this path. Under Act 3/2013, of June 4, the Spanish Competition Commission and the sectorial regulators, including telecommunications companies, have been brought together under the National Competition and Markets Commission, mainly to ensure legal certainty by avoiding contradictory decisions. The new authority is expected to begin operating in October 2013.

[26In particular, Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications networks and services (OJ C165, 11.7.2002, pages 6-31).

[28An example of this is the decision of the UK Office of Communications of August 1, 2006 (See Richard Murgatroyd, The UK OFCOM rejects allegation of predatory pricing of digital cordless phones (BT), 1 August 2006, e-Competitions, n° 16062) on a complaint that British Telecom’s pricing of digital cordless phones was predatory. In spite of British Telecom’s high market shares and though it had historically enjoyed market shares greater than any other player, this did not necessarily imply dominance. Ofcom considered variation in shares, reasons of market exits and British Telecom’s pricing policy.

[29In the decision of the Swedish Market Court of November 1, 2005, B2 Bredband/TeliaSonera (See Fredrik Lindblom, The Swedish Market Court rejects a complaint against the incumbent for abusive mixed bundling and predatory pricing in the broadband internet access sector (B2 Bredband/TeliaSonera), 1 November 2005, e-Competitions, n° 1135), the relevant report, which was allegedly elaborated in the absence of any exact market share data, was largely relied upon to conclude that the company concerned did not have a dominant position in the market for fixed line telephony. The court regretted that no investigation of the market characteristic had been presented to it.

[30Commitment decision of the French Competition Authority of October 7, 2008, Solutel/France Télécom (See Romain Maulin, Sergio Sorinas, The French NCA accepts commitments from the incumbent operator in the sector of engineering, consultancy and certification of telecommunication facilities in a case of alleged abuse of dominant position (Solutel/France Telecom), 7 October 2008, e-Competitions, n° 26686); decision of the Cypriot Competition Authority of December 21, 2008, Thunderworx/Cyprus Telecommunications Authority (See Anastasios Antoniou, The Cypriot NCA holds the telecommunications to have abused its dominant position in the SMS market (Thunderworx / Cyprus Telecommunications Authority), 21 December 2008, e-Competitions, n° 23107); decision of the French Competition Authority of July 28, 2009, France Télécom (See Joseph Vogel, The French Competition Authority holds again that the main telecom operator had exploited its dominant position (France Telecom), 28 July 2009, e-Competitions, n° 29111); judgment of the Portuguese Commerce Court of March 2nd, 2010, PT Comunicações Conduit Network (See Luís D. S. Morais, A Portuguese Commerce Court acquits the telecommunications incumbent and the NCA appeals to the Lisbon Appeals Court in a case dealing with the essential infrastructures doctrine (PT Comunicações Conduit Network), 2 March 2010, e-Competitions, n° 31023) and judgment of the Lisbon Court of Appeals of December 22, 2010 (See Luís D. S. Morais, The Lisbon Court of Appeals acquits Portuguese telecommunications incumbent (PT Comunicações), 22 December 2010, e-Competitions, n° 33892); decision of the Romanian Competition Authority of October 7, 2011, Utility Poles (See Alexandr Svetlicinii, The Romanian Competition Authority finds no anti-competitive practices on the market for access to the network infrastructure (Utility poles), 7 octobre 2011, Art. n° 39654); and decision of the Italian Competition Authority of May 9, 2013, Wind Fastweb/Telecom Italia (See Sara Lembo, The Italian Competition Authority fines incumbent telecom operator approximately EUR 104 M for ’constructive’ refusal to supply and margin squeeze (Wind - Fastweb/Telecom Italia) , 9 mai 2013, Art. n° 52730 and Article from European Competition Network Brief, The Italian Competition Authority fines a telecom operator for unilateral practices in wholesale broadband markets (Telecom Italia), 9 mai 2013, Art. n° 53340).

[32Decision of the French Competition Authority of July 28, 2009, France Télécom (See Joseph Vogel, The French Competition Authority holds again that the main telecom operator had exploited its dominant position (France Telecom), 28 July 2009, e-Competitions, n° 29111); decision of the Belgian Competition Council’s College of Prosecutors of December 24, 2009, Base/Belgacom (See Pierre Sabbadini, Norman Neyrinck, The Belgian competition Council’s College of Prosecutors dismiss multiple complaints against the incumbent telecom operator for abuse of a dominant position on the international transit services for call termination in Belgium (Base / Belgacom), 24 December 2009 e-Competitions, n° 35146 and Article from European Competition Network Brief, The College of Competition Prosecutors of the Belgian Competition Council rejects a complaint about termination rates for international calls against incumbent telecoms operator (BASE, Belgacom), 24 December 2009, e-Competitions, n° 33432); decision of the Bulgarian Competition Authority of October 1, 2009, BTC Cable Ducts and judgment of the Bulgarian Supreme Administrative Court of February 15, 2011 (See Anton Dinev, The Bulgarian Supreme Administrative Court upholds an NCA decision finding no infringement of Art. 102 TFEU in a case involving concurrent application of competition rules and communications regulation (BTC Cable Ducts), 15 February 2011, e-Competitions, n° 38336); decision of the Slovenian Competition Authority of February 13, 2012 (See Article from the European Competition Network Brief, The Slovenian Competition Authority fines abuse of dominant position in mobile telecommunications market (Telekom Slovenije), 13 February 2012, , e-Competitions n° 46691); and decision of the Spanish Competition Authority of December 19, 2012, Telefónica Móviles, Vodafone and Orange(Article from European Competition Network Brief, The Spanish Competition Commission opens formal proceedings against three telecommunications operators (Telefonica Moviles, Vodafone and Orange), 17 January 2011, e-Competitions, n° 35734 and Patricia Pérez Fernández, The Spanish Competition Authority imposes fines of nearly € 120 M on telecom operators for having abused of their dominant position in the wholesale telephone sort messaging market (Telefonica, Vodafone and Orange), 19 décembre 2012, Art. n° 50523).

[33Decision of the Slovenian Competition Authority of March 31, 2008, Slovenije Telekom – ISDN/ADSL (See Andrej Fatur, The Slovenian Competition Authority finds incumbent telecommunications operator was abusing its dominant position in the inter-operators market for provision of ADSL broadband access in Slovenia (Slovenije Telekom - ISDN/ADSL), 31 March 2008, e-Competitions, n° 22381); decision of the Bulgarian Supreme Administrative Court of February 19, 2009, Bulgarian Telecom (See Alexandr Svetlicinii, The Bulgarian Supreme Administrative Court affirms the decision of the Bulgarian Competition Authority prosecuting incumbent telecom operator for tying its ADSL and fixed voice services (Bulgarian Telecom), 19 February 2009, e-Competitions, n° 29342); judgment of the Polish Supreme Court of March 17, 2010, Telekomunikacja Polska (See Article from European Competition Network Brief, The Polish Supreme Court dismisses a cassation appeal filed by the incumbent telecommunications operator against a decision which condemned it for abusing its dominant position (Telekomunikacja Polska), 17 March 2010, e-Competitions, n° 33463); and commitment decision of the Luxembourg Competition Council of December 10, 2010, Coditel (See William Simpson, Philippe-Emmanuel Partsch, The Luxembourg Competition Council releases a decision imposing remedies on an undertaking active on the cabled distribution market (Coditel), 10 December 2010, e-Competitions, n° 33937), followed by its decision of July 18, 2011, imposing a EUR 190,000 fine for misimplementing the commitments (See William Simpson, Philippe-Emmanuel Partsch, The Luxembourg Competition Council holds that cable operator did not properly implemented all the corrective measures imposed in its decision concerning an abuse of dominant position in the market for the distribution of TV programs by cable, DSL and satellite (CODITEL), 18 juillet 2011, Art. n° 42451).

[38We have identified 28 investigations on margin squeeze practices, some of which are still ongoing.

[39Decision of the French Competition Authority of October 14, 2004; first judgment of the Court of Appeal of April 12, 2005; first judgment of the Commercial Supreme Court of May 10, 2006; second judgment of the Court of Appeal of April 2, 2008; second judgment of the Commercial Supreme Court of March 3, 2009; third judgment of the Court of Appeal of January 27, 2011.

[42Paragraph 113 of the ruling.

[43First the City Court—that had requested the preliminary ruling from the ECJ—and then the Swedish Market Court endorsed the ECJ judgment, finding an abuse by TeliaSonera. However, in its ruling of April 12, 2013, the Market Court reduced the fine from EUR 15 million to EUR 4 million because of, inter alia, the limited duration of the infringement and the limited geographic scope (See Article from European Competition Network Brief, The Swedish Market Court upholds City Court’s decision finding abuse (Telia Sonera), 12 avril 2013, Art. n° 52255 and Emanuela Matei, The Swedish Court of Appeal endorses the EU Court of Justice’s finding of abuse of dominance in margin squeeze case (TeliaSonera), 12 avril 2013, Art. n° 52237).

[44Section 5.b2, page 16, of the judgment.

[45Decision of the Spanish Competition Authority of December 2, 2003.

[47See, among others, judgment of the General Court of September 30, 2003, Manufacture française des pneumatiques Michelin v European Commission, case T-203/01, paragraph 54.

[48Also recalled in the Michelin judgment of 2003, paragraph 55.

[49Judgment of the European General Court of March 29, 2012, Telefónica S.A. and Telefónica de España S.A. v European Commission, case T-336/07, paragraph 268.

[50Not all investigations conclude with a ruling of abuse and fines, e.g. decision of the Competition Authority of Bosnia & Herzegovina of October 12, 2011, Telekom RS/Crumb Group, on procedural grounds (See Alexandr Svetlicinii, The Competition Authority of Bosnia & Herzegovina closes the investigation into the alleged abusive practices of the incumbent telecom operator without reaching a decision on the merits (Telekom RS / Crumb group), 12 October 2011, e-Competitions, n° 40544); commitment decision of Greek Competition Authority of March 26, 2012, Forthnet, Multichoice (See Article from European Competition Network Brief, The Greek Competition Authority accepts commitments in a pay-TV case (Forthnet, Multichoice), 26 mars 2012, Art. n° 46699); decision of the Romanian Competition Council of April 9, 2012, Romtelecom and Netmaster, due to insufficient evidence of the abuse (See Iustinian Captariu, Ioana Tirca, The Romanian Competition Council closes an investigation in relation to an alleged abuse of dominant position on the Romanian telecom sector (Romtelecom and Netmaster), 9 April 2012, e-Competitions n° 46915); commitment decisions of the Italian Competition Authority of June 19, 2012, Telecom Italia (See Article from European Competition Network Brief, The Italian Competition Authority closes case against telecom incumbent with commitments (Telecom Italia), 19 juin 2012, Art. n° 49691); commitment decision of the French Competition Authority of September 20, 2012, France Télécom, Cogent (See Article from European Competition Network Brief, The French Competition Authority issues a first commitment decision concerning competition concerns in the Internet connectivity market (France Telecom, Cogent), 20 septembre 2012, Art. n° 49687); decision of the Belgian Competition Council of November 29, 2012, Belgacom, due to lack of evidence of the alleged abuse (See Article from European Competition Network Brief, The Belgium Competition Council decides there are no grounds for action against the incumbent telecom operator for the launch of new tariff plan for fixed telephony services (Belgacom), 29 novembre 2012, n° 50237); judgment of the Lithuanian Supreme Administrative Court of March 5, 2013, TEO/Viasat, ordering a new evaluation of the commitments imposed by the Competition Council (See Raimundas Moisejevas, The Lithuanian Supreme Administrative Court declares that the Competition Council has to perform new evaluation of commitments since its decision lacked motives and was inconsistent (TEO/Viasat) , 5 mars 2013, Art. n° 51788).

[51Some examples of fines are: Telecom Italia: EUR 152 million in November 2004 (See Denis Fosselard, Vito Auricchio, Valerio Mosca, The Italian Antitrust Authority fines EUR 125 M the incumbent telecommunications operator for abuse of dominant position on the fixed network telecommunications services for business customers, including price squeeze practices (Telecom Italia), 16 November 2004, e-Competitions, n° 25135), EUR 104 million in May 2013 (See Sara Lembo, The Italian Competition Authority fines incumbent telecom operator approximately EUR 104 M for ’constructive’ refusal to supply and margin squeeze (Wind - Fastweb/Telecom Italia) , 9 mai 2013, Art. n° 52730 and Article from European Competition Network Brief, The Italian Competition Authority fines a telecom operator for unilateral practices in wholesale broadband markets (Telecom Italia), 9 mai 2013, Art. n° 53340); France Télécom: EUR 80 million in November 2005 (See Jacques Derenne, Lucas Niedolistek, The French Competition Authority imposes an unprecedented EUR 80 M fine to the telecommunications incumbent for abuse of a dominant position on the broadband internet market (France Telecom), 7 November 2005, e-Competitions, n° 315), EUR 45 million in October 2007, including committing to a compliance and monitoring system (See Fanny Mejane, The French Competition Council inflicts a EUR 45 M fine on the telecommunications incumbent for abusive discrimination and denigration on the ADSL high-speed Internet access market and specifies the notion of repeated infringements (France Telecom-Wanadoo), 15 October 2007, e-Competitions, n° 20347), and EUR 27.6 million in July 2009 (See Joseph Vogel, The French Competition Authority holds again that the main telecom operator had exploited its dominant position (France Telecom), 28 July 2009, e-Competitions, n° 29111); Slovak Telecom: EUR 29.4 million in December 2005 (See Juraj Neuwirth, Rudolf Rentsch, The Slovak NCA fines telecommunications company for margin squeezing in virtual private network market (Slovak Telecom), 14 December 2005, e-Competitions, n° 21308); Cesky Telekom: EUR 7 million in November 2005 (See Lipka Jurav, The Czech Competition Office renders its first case under Art. 82 EC and imposes a fine on the telecommunications incumbent for abuse of dominant position (Cesky Telecom), 24 November 2005, e-Competitions, n° 336); Telekomunikacja Polska: EUR 20 million in December 2007 (See Aldona Kwapisz, The Polish Competition Authority fines the largest telecom operator a record fine of Eur. 20 M for abusing its dominant position on the Internet access market (TP S.A.), 20 December 2007, e-Competitions, n° 15528); PT Group: EUR 2.1 million in September 2008 (See Luis D. S. Morais, The Portuguese Competition Authority fines the telecom incumbent for abuse of a dominant position raising the issue of the interplay between the application of national and EC competition laws and application of ’ex ante’ sectoral regulation (PT Comunicacoes), 1 September 2008, e-Competitions, n° 25895), and EUR 53 million in September 2009 (See Henrique Souza, The Portuguese Competition Authority finds companies guilty for abuse of dominant position on wholesale and retail markets for broadband access services (PT Group and ZON Group), 2 September 2009, e-Competitions, n° 29827 and Miguel Mendes Pereira, Myriam Ouaki, The Portuguese Competition Authority fines two telecoms operators € 53 M euros for abuse of dominant position in the wholesale and retail broadband markets (Portugal Telecom and ZON), 2 September 2009, e-Competitions, n° 28306); Proximus: EUR 66.3 million in May 2009 (See Carme Verdonck, Geoffroy Regout, The Belgian Competition Council fines a Mobile Operator due to price squeeze practices (Proximus), 26 May 2009, e-Competitions, n° 27205); CYTA (Cyprus): EUR 3 million in November 2010 (See Anastasios Antoniou, The Cyprus Competition authority fines the telecommunications incumbent over EUR 3 M for abusing its dominant position once again (Netsmart, Thunderworx), 2 November 2010, e-Competitions, n° 33573); Orange and Vodafone in Romania: EUR 63 million in February 2011; Telefónica: EUR 46.5 million in December 2012 (See Patricia Pérez Fernández, The Spanish Competition Authority imposes fines of nearly € 120 M on telecom operators for having abused of their dominant position in the wholesale telephone sort messaging market (Telefonica, Vodafone and Orange), 19 décembre 2012, Art. n° 50523).

[52Judgment of February 8, 2007, Groupe Danone v European Commission, ECR [2007] I-1355, paragraph 47.

[53Act 15/2007.

[54According to the Spanish Communication of Fines, each aggravating circumstance may lead to increasing the fine by 5% to 15%.

[56As said before, in Spain a previous infringement of the law (regardless of the nature) is sufficient.

[59See, for instance, the Teléfonos en Aeropuertos case, in which Telefónica was considered to have abused its dominant position by refusing to supply lines to 3C Communications. The Spanish Competition Authority issued its decision on February 1, 1995; it took the Supreme Court eight years to issue its definitive decision, which confirmed the original decision of March 6, 2003 (See Paloma Martinez-Lage, The Spanish Supreme Court confirms an abuse of dominant position by the telecom incumbent consisting on a refusal to supply lines to 3C Communications (Telefonos en Aeropuertos - Telefonica de Espana), 6 March 2003, e-Competitions, n° 20062).

[60See paragraph 28.

[61Judgment of June 17, 2010, Lafarge SA v European Commission, ECR [2010] I-5361, paragraphs 81-97.

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