The power of the European Commission to overrule member states’ national telecoms regulators has been confirmed by a court ruling over a fine levied against Telefonica in 2007.
Europe’s General Court yesterday backed the Commission’s decision to fine the Spanish incumbent €151 million for abusing its dominant position in the market by squeezing broadband prices. The EC states the decision affirms its stance that dominant firms cannot be excused from complying with European competition laws by a national regulator.
Specifically, the judgment confirms “the Commission’s methodology for determining the existence of a margin squeeze, and the Commission’s power to intervene ex post against abuses committed on regulated markets.”
The court was ruling on an appeal by Telefonica and Spain against the fine, which the EC levied after ruling the operator held a dominant position in the country’s wholesale markets. Telefonica argued the EC should have conducted a margin squeeze test based on the range of wholesale products available, while Spain claimed the Commission violated its duty to cooperate with its national telecoms regulator.