Telefónica SA v Commission
Telefónica SA v Commission is a European competition law case relevant for UK enterprise law, concerning telecommunications.
Facts
Telefonica appealed against a Commission fine of €151m for abuse of dominance for wholesale ADSL broadband in Spain from 2001-2006. Telefonica had a statutory monopoly on retail provision of landlines before 1998. It was the only company with a nationwide fixed telephone network. It provided wholesale broadband to other telecomms companies, and its own retail services. The Commission found Telefonica imposed unfair prices through a margin squeeze on competitors, so the difference between their wholesale prices and its retail prices were not enough to make a profit. It assessed Telefonica’s downstream costs using LRAIC as the standard.The General Court held that to establish a margin squeeze there was no need to show excessive or predatory prices: the abuse was in the spread available. The test was whether an equally efficient competitor, based on the dominant undertaking’s own costs could survive.