In Case C-295/12 Telefónica S.A. and Telefónica de Espa?a S:A:U: v Commission, the CJEU dismissed the appeal lodged by Telefónica and Telefónica de Espaha against the fine imposed concerning its abuse of a dominant position on the Spanish broadband market.
The fine of almost €152 million imposed by the Commission and upheld by the General Court remains unchanged.
After receiving a complaint, the Commission declared, by decision of 4 July 2007, that Telefónica and Telefónica de Espaha (‘Telefónica’) had abused their dominant position by imposing unfair prices on their competitors in the form of a margin squeeze between the prices for retail broadband access on the Spanish ‘mass market’ and the prices on the regional and national wholesale broadband access markets throughout the period from September 2001 to December 2006. The Commission considered that there was clear-cut abuse on the part of an undertaking holding a virtual monopoly and that the abuse was to be classified as ‘very serious’. A fine of €151,875 000 was therefore imposed on Telefónica, the starting amount of the calculation being set at €90 million.
Telefónica brought proceedings against the Commission’s decision before the General Court.
By judgment of 29 March 2012, the General Court dismissed the action.
Telefónica then lodged an appeal against the General Court’s decision before the Court of Justice.
In the judgment of 10 July, the Court has dismissed Telefónica’s appeal in its entirety. The fine of €151 875 000 imposed by the Commission and upheld by the General Court therefore remains unchanged.
The Court observes, first of all, that the General Court did in fact carry out an in-depth review of the Commission’s decision in the light of the pleas in law put forward by Telefónica, which satisfied the requirements of a review exercising its powers of unlimited jurisdiction.
The Court points out that, according to the findings of the General Court, the Commission demonstrated that there were potential anti-competitive effects that may have excluded competitors who were at least as efficient as Telefónica, which is sufficient to establish that the practice of squeezing margins was abusive.
As regards Telefónica’s argument that it could not reasonably have foreseen the Commission’s interpretation of EU law regarding the conditions for the application of that law to the practice of squeezing margins, the Court observes that that interpretation was reasonably foreseeable at the time the infringement was committed.
Lastly, the Court points out that the General Court did not err in law in finding that the restriction of the relevant geographic market to Spain does not mean that the infringement cannot be classified as ‘very serious’. The classification of an infringement as ‘serious’ or ‘very serious’ does not depend only on the size of the relevant geographic market but also on other criteria characterising the infringement.
The Court also considers that the Commission gave adequate reasons for its decision, that there was no breach of the principle of equal treatment and that Telefónica has failed to show in what way the starting amount of €90 million imposed by the Commission in its decision was excessive to the point of being disproportionate.
