Brussels, 10/07/2014 (Agence Europe) - There has indeed been an abuse of dominant position by Telefonica, according to the European Court of Justice (CJEU) in its decision made on Thursday 10 July (C-295/12 P). The CJEU rejected the entire appeal made by Telefonica on this subject and upheld the fine of €152 million imposed by the European Commission in 2007.
EU competition law prohibits any abuse by companies of their dominant position on the internal market or part of it insofar as trade between member states could be affected by this practice. On this basis, the Commission decided on 4 July 2007 that Telefonica had abused its dominant position between 2001 and 2008 by imposing unfair prices on its competitors on the Spanish broadband internet market. A fine of €152 million was imposed (the starting amount of the calculation being set at €90 million). Telefonica subsequently appealed to the EU General Court, which rejected its appeal in March 2012. The company pursued its case and introduced an appeal at the European Court of Justice against the ruling of the General Court. The CJEU has in turn rejected this appeal.
The General Court carried out a thorough examination of the decision made by the Commission, states the CJEU in its ruling and it says that “the Commission demonstrated that there were potential anti-competitive effects that may have excluded competitors who were at least as efficient as Telefonica, which is sufficient to establish that the practice of squeezing margins was abusive”. The CJEU also indicates that the General Court had not err in law in finding that the restriction of the relevant geographical market in Spain does not mean that the infringement cannot be classified as “very serious”. It also ruled that the initial amount of the fine of €90 million was not excessive or disproportionate. (IL)