Deutsche Telekom AG v European Commission.

• Jurisdiction: European Union
• Court: Court of Justice (European Union)
• ECLI: ECLI:EU:C:2021:238
• Docket Number: C-152/19
• Date: 25 March 2021

Provisional text

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)

In Case C‑152/19 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 21 February 2019,

Deutsche Telekom AG, established in Bonn (Germany), represented by D. Schroeder and K. Apel, Rechtsanwälte,

appellant,

the other parties to the proceedings being:

European Commission, represented by M. Kellerbauer, M. Farley, L. Malferrari, C. Vollrath and L. Wildpanner, acting as Agents,

defendant at first instance,

Slovanet a.s., established in Bratislava (Slovakia), represented by P. Tisaj, advokát,

intervener at first instance,

THE COURT (Third Chamber),

composed of A. Prechal (Rapporteur), President of the Chamber, K. Lenaerts, President of the Court of Justice, acting as Judge of the Third Chamber, N. Wahl, F. Biltgen and L.S. Rossi, Judges,

Advocate General: H. Saugmandsgaard Øe,

Registrar: D. Dittert, Head of Unit,

having regard to the written procedure and further to the hearing on 17 June 2020,

after hearing the Opinion of the Advocate General at the sitting on 9 September 2020,

gives the following

Judgment

1 By its appeal, Deutsche Telekom AG requests that the Court set aside the judgment of the General Court of the European Union of 13 December 2018, Deutsche Telekom v Commission (T‑827/14, EU:T:2018:930; ‘the judgment under appeal’), by which the General Court partially dismissed its action seeking, primarily, the annulment, in whole or in part, in so far as it concerns Deutsche Telekom, of Commission Decision C(2014) 7465 final of 15 October 2014 relating to proceedings under Article 102 [TFEU] and Article 54 of the EEA Agreement (Case AT.39523 – Slovak Telekom), as rectified by Commission Decision C(2014) 10119 final of 16 December 2014 and by Commission Decision C(2015) 2484 final of 17 April 2015 (‘the decision at issue’), and, in the alternative, the annulment or the reduction of the fines imposed on the appellant by that decision.

Legal context

Regulation(EC) No 2887/2000

2 Recitals 3, 6 and 7 of 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) stated:

‘(3) The “local loop” is the physical twisted metallic pair circuit in the fixed public telephone network connecting the network termination point at the subscriber’s premises to the main distribution frame or equivalent facility. As noted in the [European] Commission’s Fifth Report on the implementation of the telecommunications regulatory package, the local access network remains one of the least competitive segments of the liberalised telecommunications market. New entrants do not have widespread alternative network infrastructures and are unable, with traditional technologies, to match the economies of scale and the coverage of operators designated as having significant market power in the fixed public telephone network market. This results from the fact that these operators rolled out their metallic local access infrastructures over significant periods of time protected by exclusive rights and were able to fund investment costs through monopoly rents.

…

(6) It would not be economically viable for new entrants to duplicate the incumbent’s metallic local access infrastructure in its entirety within a reasonable time. Alternative infrastructures such as cable television, satellite, wireless local loops do not generally offer the same functionality or ubiquity for the time being, though situations in Member States may differ.

(7) Unbundled access to the local loop allows new entrants to compete with notified operators in offering high bit-rate data transmission services for continuous Internet access and for multimedia applications based on digital subscriber line (DSL) technology as well as voice telephony services. A reasonable request for unbundled access implies that the access is necessary for the provision of the services of the beneficiary, and that refusal of the request would prevent, restrict or distort competition in this sector.’

3 Article 1 of that regulation, entitled ‘Aim and scope’, provided:

‘1. This Regulation aims at intensifying competition and stimulating technological innovation on the local access market, through the setting of harmonised conditions for unbundled access to the local loop, to foster the competitive provision of a wide range of electronic communications services.

2. This Regulation shall apply to unbundled access to the local loops and related facilities of notified operators as defined in Article 2(a).

…’

4 Article 2 of that regulation contained the following definitions:

‘…

(a) “notified operator” means operators of fixed public telephone networks that have been designated by their national regulatory authority as having significant market power in the provision of fixed public telephone networks …

…

(c) “local loop” means the physical twisted metallic pair circuit connecting the network termination point at the subscriber’s premises to the main distribution frame or equivalent facility in the fixed public telephone network;

…’

5 Article 3 of that regulation read as follows:

‘1. Notified operators shall publish from 31 December 2000, and keep updated, a reference offer for unbundled access to their local loops and related facilities, which shall include at least the items listed in the Annex. The offer shall be sufficiently unbundled so that the beneficiary does not have to pay for network elements or facilities which are not necessary for the supply of its services, and shall contain a description of the components of the offer, associated terms and conditions, including charges.

2. Notified operators shall from 31 December 2000 meet reasonable requests from beneficiaries for unbundled access to their local loops and related facilities, under transparent, fair and non-discriminatory conditions. Requests shall only be refused on the basis of objective criteria, relating to technical feasibility or the need to maintain network integrity. … Notified operators shall provide beneficiaries with facilities equivalent to those provided for their own services or to their associated companies, and with the same conditions and time-scales.

…’

6 Pursuant to Articles 4 and 6 of Directive 2009/140/EC of the European Parliament and of the Council of 25 November 2009 amending Directives 2002/21/EC on a common regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/EC on the authorisation of electronic communications networks and services (OJ 2009 L 337, p. 37), Regulation No 2887/2000 was repealed with effect from 19 December 2009.

Directive 2002/21/EC

7 Article 8 of 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 (‘Framework Directive’) (OJ 2002 L 108, p. 33), as amended by Directive 2009/140, provides:

‘…

2. The national regulatory authorities shall promote competition in the provision of electronic communications networks, electronic communications services and associated facilities and services by inter alia:

…

(b) ensuring that there is no distortion or restriction of competition in the electronic communications sector, including the transmission of content;

…

5. The national regulatory authorities shall, in pursuit of the policy objectives referred to in paragraphs 2, 3 and 4, apply objective, transparent, non-discriminatory and proportionate regulatory principles by, inter alia:

…

(f) imposing ex ante regulatory obligations only where there is no effective and sustainable competition and relaxing or lifting such obligations as soon as that condition is fulfilled.’

Background to the dispute

8 The background to the dispute was set out in paragraphs 1 to 53 of the judgment under appeal and may be summarised as follows.

9 The appellant is the incumbent telecommunications operator in Germany and the company at the helm of the Deutsche Telekom group. During the period between 12 August 2005 and 31 December 2010, the appellant owned 51% of the capital of the incumbent telecommunications operator in Slovakia, Slovak Telekom a.s. (‘ST’).

10 ST, which enjoyed a legal monopoly on the Slovak telecommunications market until 2000, is the largest telecommunications operator and broadband provider in Slovakia. ST’s copper and mobile networks cover almost the entire Slovak territory.

11 Following a market analysis, in 2005 the Slovak national regulatory authority for telecommunications (‘the TUSR’) designated ST as an operator with significant power on the wholesale market for unbundled access to the local loop within the meaning of Regulation No 2887/2000.

12 Consequently, the TUSR imposed on ST, inter alia, the requirement to grant all reasonable and justified requests for unbundling of its local loop in order to enable alternative operators to use that loop with a view to offering their own services on the retail mass market for broadband internet access services at a fixed location in Slovakia. In order to make it possible to fulfil that obligation, ST published its reference unbundling offer which set out the contractual and technical conditions for access to its local loop.

13 Following an investigation of the Commission, opened on its own initiative, into, inter...