ECJ upholds fine on Telefonica Espana’s for anticompetitive broadband activity

11 Jul 2014

The European Court of Justice (ECJ) has reportedly upheld the record EUR152 million (USD207 million) fine handed down to Spanish fixed line incumbent Telefonica Espana for restricting competition in the broadband market.

As noted in TeleGeography’s GlobalComms Database, in 2007 European antitrust regulators fined Telefonica Espana EUR151.9 million for abusing its dominance in the provision of broadband internet access. The European Commission (EC) at that date accused the telco of charging wholesale rates that were too close to retail prices, thus preventing rival internet service providers (ISPs) from making a profit.

Telefonica Espana, which offers services under the Movistar banner, saw a March 2012 appeal against the 2007 fine rejected, at which date the EU’s General Court asserted that the EC ‘rightly held that Telefonica had abused its dominant position’. With Telefonica having subsequently appealed the General Court’s decision, the matter was moved to the ECJ for consideration.

In the latest finding, the ECJ confirmed that it had dismissed the Spanish operator’s appeal ‘in its entirety’, with the fine remaining unchanged. In its ruling it said it had found that the General Court had carried out an in-depth review of the EC’s initial decision ‘which satisfied the requirements of a review exercising its powers of unlimited jurisdiction’. Moreover, the ECJ said it considered that the EC’ gave adequate reasons for its decision, that there was no breach of the principle of equal treatment and that Telefonica has failed to show in what way the starting amount of EUR90 million imposed by the Commission in its decision was excessive to the point of being disproportionate’. Meanwhile, the ECJ noted that, according to the findings of the General Court, the Commission had ‘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’.

Spain, Telefonica Espana (Movistar)