(Cases С-280/08 Deutsche Telekom and С-52/09 TeliaSonera)

 

Hristo Kirilov [1]

 

Based on the judgments of the Court of Justice of the European Unionfrom 14 October 2010 in case C‑280/08 P Deutsche Telekom AG and from 17 February 2011 in case C‑52/09 TeliaSonera Sverige AB, this paper aims at giving a comprehensive description of the “margin squeeze” as a standalone form of abuse of a dominant position under art. 102 of the Treaty on the Functioning of the European Union. The analysis is limited to the regulated telecom sector where the scenario generally involves a vertically integrated undertaking with a dominant position at least at the upstream market, several competitors on the downstream market and a sector regulator. In this context it seems that there is not a clear-cut solution as to what should be the appropriate incumbent’s behavior in order to concurrently abide to the sector regulations, the applicable competition law and besides be economically effective. However, it is concluded from the above-mentioned decisions that the European Commission and the CJEU have achieved a consistent and reasonable position with regards to the “margin squeeze” as a separate abuse of a dominant position in the sector.

The article is structured as follows. The first section describes the applicable legal framework for assessing whether there is an infringement of art. 102 TFEU and gives a general overview of the principal goals of EU legislation in the Telecommunications Sector. In the second part are presented the facts in both cases Deutsche Telekom and TeliaSonera and are outlined the decisions of the Court on the merits. In the last section a general conclusion is made about the “margin squeeze” as an abuse of a dominant position and its elements are depicted. The issue of the interaction between competition law and sectoral regulation as a single instrument for the achievement of EU goals on the particular markets is also discussed. A reference is made to the decisions of national authorities and jurisdictions on margin squeeze.

As to the substance, it should be shortly mentioned that according to the judgments of the CJEU the margin squeeze is capable, in itself, of constituting an abuse in view of the exclusionary effect that it can create for competitors who are at least as efficient as the dominant undertaking. It is not, therefore, necessary to establish, additionally, that the wholesale prices or retail prices for end-users are in themselves abusive on account of their excessive or predatory nature, as the case may be.

In view of the findings of the Court, the article concludes with a reflection about the interaction of competition law and sector-specific regulations. Clearly, in Deutsche Telekom the Court has considered that the margin for action of Deutsche Telekom has not been too squeezed (by the sector regulator and the ex ante control effectuated) so that the incumbent could still fall under the legal squeeze of European Justice. This is how in this particular case and for that time the CJEU decided that it is for the incumbent to bear the responsibility for not rising prices on the downstream market and thus avoiding margin squeeze. Nevertheless the issue that seems to come forward is how EU institutions would further distribute the economic burden between the Member States, the incumbents and the consumers that is to be supported all the way long to the achievement of completely liberalized market of telecommunication services.

 

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Линк към цялата статия на български език:  „ЦЕНОВАТА ПРЕСА” КАТО ЗЛОУПОТРЕБА С ГОСПОДСТВАЩО ПОЛОЖЕНИЕ НА РЕГУЛИРАНИТЕ ПАЗАРИ НА ДАЛЕКОСЪОБЩИТЕЛНИ УСЛУГИ

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[1]LLM (EU Law) Junior Expert at the Bulgarian Commission for Protection of Competition. Former member of the Sofia Bar Association. hristo.kirilov@mail.bg