EU court partially annuls European Commission finding against Slovak Telekom and Deutsche Telekom

EU court partially annuls European Commission finding against Slovak Telekom and Deutsche Telekom

On 13 December 2018, the General Court issued its judgement on appeals from Slovak Telekom and its parent company Deutsche Telekom challenging a European Commission that fined them for abusive conduct in the Slovak broadband market. The GC judgment partially annulled the Commission decision and reduced the amount of the fines imposed.

The GC supported Slovak Telekom’s argument that the Commission has failed to demonstrate a broadband margin squeeze in the period prior to 1 January 2006. The Commission’s ‘year-by-year’ approach showed positive margins in 2005 but the Commission nevertheless argued that the abusive conduct took place throughout the 2005-2010, relying on a ‘multi-year’ approach where it considered the aggregated margin across the whole period. The Court found the application of a ‘multi-year’ approach in the current context to be flawed, as Slovak Telekom could not foresee future margins when it set its retail and wholesale prices in 2005; the Commission’s finding of margin squeeze in 2005 has been annulled by the Court’s decision.

Frontier Economics acted as a lead economic advisor to Slovak Telekom throughout the abuse of dominance investigation by the European Commission and during the appeal to the General Court. Frontier regularly advises clients on regulatory and competition issues in the telecommunications sector.

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