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MEMO/09/203

Brussels, 27 April 2009

Antitrust: Commission opens formal proceedings against telecoms incumbents Telekomunikacja Polska and Slovak Telekom

The European Commission has decided to open two separate antitrust investigations against the Polish and Slovak incumbent telecoms operators, Telekomunikacja Polska and Slovak Telekom, for suspected breaches of the EC Treaty's prohibition of abusive practices (Article 82). The opening of formal proceedings follows inspections carried out in September 2008 in Telekomunikacja Polska and in January 2009 in Slovak Telekom (see MEMO/08/666 and MEMO/09/22). The Commission proceedings focus on suspicions of abusive behaviour that may prevent or hinder competition on broadband internet access and other electronic communications markets in Poland and in Slovakia.

The opening of proceedings does not imply that the Commission has conclusive proof of the infringements but merely means that the Commission will deal with the cases as a matter of priority.

The companies' rights of defence will be fully respected.

There is no strict deadline to complete inquiries into anticompetitive conduct. Their duration depends on a number of factors, including the complexity of each case, the extent to which the undertakings concerned co-operate with the Commission and the exercise of the rights of the defence.

Why has the Commission decided to open proceedings?

The two cases are separate and will each be considered on its own merits. Both cases demonstrate the Commission's worries about the situation in the new Member States, where competition is still at an early stage of development (see SPEECH/08/658).

The Slovak case

The Commission will investigate a possible refusal to give access to infrastructure and a possible margin squeeze (insufficient margin between the retail and wholesale prices of Slovak Telekom making it difficult for alternative operators to compete using Slovak Telekom's infrastructure) with respect to the unbundled local loop. The Commission will also examine a possible margin squeeze and other possibly abusive behavior with respect to other wholesale and retail broadband access services in Slovakia. If confirmed, such behavior could constitute an abuse of a dominant position, which is prohibited by Article 82 of the EC Treaty.

The Polish case

The Commission will investigate a possible refusal to give access to bitstream and to the unbundled local loop. In particular, the Commission will look into practices which inhibit third parties from successfully providing broadband services on the downstream market on the basis of either bitstream or unbundled local loops. The Commission will also examine other possible types of non-price conduct related to the purchase of wholesale broadband access services that may restrict the ability of operators to effectively compete with the incumbent. If confirmed, the behavior of Telekomunikacja Polska could constitute an abuse of a dominant position in breach of Article 82 of the EC Treaty.

What is the legal basis for the decisions?

The legal basis for this procedural step is Article 11(6) of Council Regulation No 1/2003 and Article 2(1) of Commission Regulation No 773/2004.

Article 11(6) of Regulation No 1/2003 provides that the initiation of proceedings relieves the competition authorities of the Member States of their authority to apply Articles 81 and 82 of the Treaty to the practices under investigation by the Commission. Moreover, Article 16(1) of the same Regulation provides that national courts must avoid giving decisions which would conflict with a decision contemplated by the Commission in proceedings that it has initiated.

Article 2 of Regulation No 773/2004 provides that the Commission can initiate proceedings with a view to adopting at a later stage a decision on substance according to Articles 7-10 of Regulation No 1/2003 at any point in time, but at the latest when issuing a statement of objections or a preliminary assessment notice in a settlement procedure. In the two cases at stake, the Commission has chosen to open proceedings before such further steps.

The Commission may also make public the initiation of proceedings in any appropriate way. Before doing so, it has to inform the parties concerned.


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