The European Commission Comes Calling On The Telecoms Sector Again

Author:Mr John Kettle, Niall Collins and David Burke
Profession:Mason Hayes & Curran

On 8 May 2012, the European Commission (the "Commission") opened another chapter in its fight against abuses by dominant undertakings in the telecoms sector when announcing it had issued a statement of objections ("SO") to Slovak Telekom ("ST") and its parent company Deutsche Telekom AG ("DT"). The SO relates to alleged anticompetitive behaviour on several wholesale broadband markets in Slovakia.

In particular, the Commission has taken the view that:

ST may have refused to supply crucial unbundled access to its local loops and wholesale services to competitors by: - imposing unreasonable and burdensome technical and commercial terms; and - using delaying tactics and obstructing negotiations over these terms, and may have imposed a margin squeeze on alternative operators by setting its wholesale prices at a level that made it impossible for other operators to profitably enter and operate in the retail broadband market. In our March 2011 Competition Newsletter, we highlighted the European Court of Justice's (the "ECJ") clarification in its TeliaSonera judgment of the principles on margin squeeze established in Deutsche Telekom, and its affirmation that a refusal to supply and a margin squeeze constitute distinct breaches of Article 102 of the Treaty on the Functioning of the European Union. Of particular relevance to the telecoms sector was the ECJ's affirmation that a margin squeeze may still constitute an abuse of dominance, even where the dominant undertaking is under no express regulatory or legal duty to supply a downstream competitor and, further, that there is no requirement to establish that the wholesale product is "indispensible". This approach was recently...

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