European court rejects Deutsche Telekom appeal against 2003 fine

11 Apr 2008

The European Court of First Instance (CFI) has upheld in its entirety a 2003 European Commission (EC) decision to impose a EUR12.6 million (USD19.9 million) fine on German incumbent Deutsche Telekom (DT) for abusing its dominant market position. The original charge was that for five years between 1998 and 2003, DT charged unfair prices for the provision of local access to its fixed network (local loop unbundling), by having too little spread between wholesale and retail access charges, forcing very thin margins on competitors in the absence of a viable alternative wireline infrastructure. This meant that rival telcos could not compete on a level field with DT, and consumers were deprived of the benefits of choice and price competition.

In a press release, the EC welcomed the CFI’s ruling, and said that it was important ‘not only for German consumers, but also because it confirms that dominant operators who have a regulatory obligation to supply access to their networks cannot evade this obligation through a margin-squeeze price policy.’

Germany, Deutsche Telekom (DT)