Telefónica SA v Commission
Telefónica SA v Commission | |
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Court | Court of Justice |
Citation(s) | (2014) C-295/12 |
Keywords | |
Telecommunications |
Telefónica SA v Commission (2014) C-295/12 is a European competition law case relevant for UK enterprise law, concerning telecommunications.
Facts
Telefonica appealed against a Commission fine of €151m for abuse of dominance for wholesale ADSL broadband in Spain from 2001-2006. Telefonica had a statutory monopoly on retail provision of landlines before 1998. It was the only company with a nationwide fixed telephone network. It provided wholesale broadband to other telecomms companies, and its own retail services. The Commission found Telefonica imposed unfair prices through a margin squeeze on competitors, so the difference between their wholesale prices and its retail prices were not enough to make a profit. It assessed Telefonica’s downstream costs using LRAIC as the standard.
The General Court held that to establish a margin squeeze there was no need to show excessive or predatory prices: the abuse was in the spread available. The test was whether an equally efficient competitor, based on the dominant undertaking’s own costs could survive.
Judgment
The CJEU upheld the General Court's decision in its entirety, so that Telefonica still had to pay a fine for abuse of a dominant position.
“ | 9. The General Court summarised the background to the dispute at paragraphs 3 to 29 of the judgment under appeal as follows:
[...] 74 By the third part of their first ground of appeal, the appellants maintain that, at paragraph 182 of the judgment under appeal, the General Court distorted the facts and infringed their rights of defence by finding that they had not relied on the non‑essential nature of wholesale products when assessing the effects of their conduct. 75 That argument is ineffective, as pointed out by the Advocate General at point 27 of his Opinion, since the appellants’ reliance on the non-essential nature of wholesale products formed part of a broader argument in which the General Court was invited to apply the criteria established by the Court of Justice in Bronner (Case C‑7/97 EU:C:1998:569) in connection with a refusal to supply amounting to abuse. As is apparent from paragraphs 180 and 181 of the judgment under appeal, the abusive conduct of which the appellants stand accused, which took the form of a margin squeeze, constitutes an independent form of abuse distinct from that of refusal to supply, so that the criteria established in Bronner (EU:C:1998:569) were not applicable in the present case (Case C‑52/09 TeliaSonera Sverige EU:C:2011:83, paragraphs 55 to 58). [...] 124... in order to establish that a practice such as margin squeeze is abusive, that practice must have an anti-competitive effect on the market, although the effect does not necessarily have to be concrete, it being sufficient to demonstrate that there is a potential anti‑competitive effect which may exclude competitors who are at least as efficient as the dominant undertaking (see TeliaSonera Sverige EU:C:2011:83, paragraph 64) and, second, the General Court found at paragraph 282 of the judgment under appeal, in its assessment of the facts, that the Commission had demonstrated that there were such potential effects. |
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