DT loses EC test case

22 May 2003

German telecoms incumbent Deutsche Telekom (DT) has been ordered by the European Commission (EC) to pay a symbolic EUR12.6 million fine after losing a test case over internet access and local loop pricing. The penalty is the result of a four year investigation by the EC into whether DT was guilty of abusing its dominant market position by charging competitors higher fees to use its local network than it did for its own customers. Because of the insufficient difference between DT’s local loop access prices and the tariffs for retail subscriptions, the EU found that new entrants had little scope to compete with DT for end customers. In a statement, Competition Commissioner Mario Monti condemned the fact that there are still very few unbundled local loops in Germany, despite DT having being obliged to provide access to its competitors since 1998. He went on to estimate that DT continues to control around 95% of all fixed lines in Germany, with just 855,000 lines in the hands of alternative operators.