Case C‑152/19 P

Deutsche Telekom AG

v

European Commission
and
Slovanet, a.s.

Judgment of the Court (Third Chamber), 25 March 2021

(Appeal – Competition – Article 102 TFEU – Abuse of dominant position – Slovak market for broadband internet access services – Regulatory obligation on the part of operators with significant market power to grant access to the local loop – Conditions laid down by the incumbent operator for unbundled access by other operators to the local loop – Indispensability of the access – Imputability of a subsidiary’s conduct to the parent company – Rights of the defence)

1. Dominant position – Abuse – Refusal of an undertaking in a dominant position to allow another undertaking access to a product or service necessary for its business – Access by third undertakings to the incumbent operator’s local loop on the broadband telecommunications services market – Setting unfair access conditions resulting in an implied refusal of access – Assessment of whether abusive – Obligation for the Commission to demonstrate that access to the local loop is indispensable for competing operators to enter the market – Absence

   (Art. 102 TFEU; EEA Agreement, Art. 54)

   (see paragraphs 40-60)

2. Competition – EU rules – Infringements – Attribution – Parent company and subsidiaries – Economic unit – Criteria for assessment – Exercise of decisive influence over the conduct of the subsidiary which may be inferred from a set of indicia relating to the economic, organisational and legal links with its parent company – Circumstances allowing the existence of decisive influence to be established – Presence of senior managers on the subsidiary’s board of directors – Provision of staff to the subsidiary – Regular receipt of information on the subsidiary’s commercial strategy

   (Art. 102 TFEU; EEA Agreement, Art. 54)

   (see paragraphs 72‑87, 94‑97)

3. Competition – Administrative procedure – Statement of objections – Necessary content – Observance of the rights of the defence – New factors brought to the interested party’s knowledge at a very advanced stage – Short time limit granted to submit observations – Whether permissible

   (Charter of Fundamental Rights of the European Union, Art. 41(2); Council Regulation No 1/2003, Art. 27(1))

   (see paragraphs 105, 106)

Résumé

The Court of Justice dismisses the appeals lodged by Slovak Telekom and Deutsche Telekom against the judgments of the General Court relating to anticompetitive practices on the Slovak telecommunications market. The fine of EUR 38 061 963, for which those two companies were found jointly and severally liable, and the fine of EUR 19 030 981, for which only Deutsche Telekom was found liable, therefore remain unchanged.

Slovak Telekom a.s. (‘ST’) offers, in its capacity as the incumbent telecommunications operator in Slovakia, broadband services on its fixed copper and fibre optic networks. ST’s networks include also the ‘local loop’, namely, the physical lines which connect the subscriber’s telephone jack with the main distribution frame of the fixed telephone network.

Following an analysis of its domestic market, the Slovak national regulatory authority for telecommunications adopted, on 8 March 2005, a decision designating ST as an operator with significant market power on the wholesale market for unbundled access to the local loop. Consequently, ST was obliged, under the EU regulatory framework, ( 1 ) to grant alternative operators access to the local loop owned by it, thus allowing new entrants to use that infrastructure with a view to offering their own services to end users.

On 15 October 2014, the Commission adopted a decision in which it found that ST, and its parent company Deutsche Telekom AG (‘DT’), had abused its dominant position on the Slovak market for broadband internet services, by limiting the access of alternative operators to its local loop between 2005 and 2010 (‘the decision at issue’). The Commission found, more specifically, that ST, and DT, had infringed Article 102 TFEU by setting unfair terms and conditions in its reference offer concerning unbundled access to its local loop and by applying unfair tariffs which did not allow an equally efficient competitor to replicate the retail services offered by ST without incurring a loss. As a result, the Commission imposed a fine of EUR 38 838 000 on ST and DT, jointly and severally, and a fine of EUR 31 070 000 on DT.

By judgments of 13 December 2018, Deutsche Telekom v Commission ( 2 ) and Slovak Telekom v Commission, ( 3 ) the General Court partially annulled the decision at issue, setting the fine for which ST and DT had been found jointly and severally liable at EUR 38 061 963 and the fine for which DT alone had been found liable at EUR 19 030 981.

The appeals lodged by ST and DT are dismissed by the Court of Justice which clarifies, in that context, the scope of its judgment in Bronner ( 4 ) as regards the classification as abusive, for the purposes of Article 102 TFEU, of a refusal of access to infrastructures owned by a dominant undertaking. In that judgment, the Court of Justice had set a higher threshold for a finding that a practice consisting in a refusal, on the part of a dominant undertaking, to make available infrastructure it owns to competing undertakings, is abusive.

Assessment of the Court of Justice

The Court of Justice emphasises, first, that any undertaking, even if dominant, remains, in principle, free to refuse to conclude contracts and to use the infrastructure that it has developed for its own needs. Imposing on a dominant undertaking, as a result of its abusive refusal to conclude a contract, an obligation to conclude a contract with a competing undertaking with a view to allowing that competing undertaking access to its own infrastructure is therefore especially detrimental to the freedom of contract and the right to property of the dominant undertaking. Thus, where a dominant undertaking refuses to give access to its infrastructure, the decision to oblige it to grant its competitors access cannot be justified, at a competition policy level, unless the dominant undertaking has a genuinely tight grip on the market concerned.

The Court notes, next, that the application of the conditions laid down by the Court of Justice in the judgment in Bronner, and in particular the third condition, allows it to be determined whether a dominant undertaking has a genuinely tight grip on the market by virtue of its infrastructure. In accordance with that judgment, a dominant undertaking may be forced to give access to an infrastructure that it has developed for the needs of its own business only where, first, refusing that access is likely to eliminate all competition on the part of the competing undertaking requesting access, second, that refusal cannot be objectively justified, and third, such access is indispensable to the business of the competing undertaking, that is to say, there is no actual or potential substitute for that infrastructure.

By contrast, where a dominant undertaking gives access to its infrastructure but makes that access subject to unfair conditions, the conditions laid down by the Court of Justice in the judgment in Bronner do not apply. While such practices can be abusive, in that they are able to give rise to anticompetitive effects on the markets concerned, they cannot be equated to a refusal by the dominant undertaking to give access to its infrastructure, since the competition authorities will not be able to force that undertaking to give access to its infrastructure, as that access has already been granted. The measures to be taken in such a context will thus be less detrimental to the freedom of contract of the dominant undertaking and to its right to property than forcing it to give access to its infrastructure where it has reserved it for the needs of its own business.

In view of the EU regulatory framework, which requires ST to give competing undertakings access to its local loop, the Court of Justice recalls that that Slovak telecommunications operator could not and did not actually refuse to give access to that local loop. On the contrary, it was pursuant to its decision-making autonomy in respect of the configuration of that access that ST set the terms and conditions for access called into question in the decision at issue. Since those terms and conditions did not constitute a refusal of access comparable to the one at issue in the judgment in Bronner, the conditions set out by the Court of Justice in that regard do not apply in the present case. Contrary to the arguments put forward by ST and DT, the Commission was therefore not required to demonstrate that access to ST’s local loop was indispensable for competing undertakings to enter the market, in order to be able to classify the terms and conditions for access called into question as an abuse of dominant position.

Since the other grounds of appeal relied on by ST and DT, relating inter alia to the assessment of ST’s tariff practice which resulted in a margin squeeze and to the imputability of the infringement to DT as the parent company, are also rejected, the Court of Justice dismisses the appeals in their entirety.

( 1 ) This includes Regulation (EC) No 2887/2000 of the European Parliament and of the Council of 18 December 2000 on unbundled access to the local loop (OJ 2000 L 336, p. 4) and Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (OJ 2002 L 108, p. 33).

( 2 ) T‑827/14, EU:T:2018:930.

( 3 ) T‑851/14, EU:T:2018:929.

( 4 ) Judgment of 26 November 1998, Bronner (C‑7/97, EU:C:1998:569).