Antitrust Lawyer Blog Commentary on Current Developments

SPANISH GOVERNMENT TO CHALLENGE EUROPEAN COMMISSION’S DECISION TO FINE TELEF

The Spanish Government announced on October 8, 2007, that it will bring an action before the Court of First Instance against the Commission’s decision to fine Telefónica. The Spanish Government believes that the Commission’s decision does not respect the Spanish telecoms regulator’s (“CMT”) competencies.

On July 4, 2007, the Commission fined Telefónica $214.5 million for abusing its dominant position in the Spanish broadband market. The Commission found that Telefónica imposed unfair prices in the form of a margin squeeze between the wholesale prices it charged to its competitors and the retail prices it charged to its own customers. The CMT argued, however, that Telefónica was not guilty of a competition law infringement because those margins had been fixed by the CMT itself. The CMT considers that the Commission’s decision seriously affects its own competencies, as well as its regulatory tasks. Furthermore, the Spanish regulator is critical of the fact that the Commission did not consult it during the decision-making process.
Camelia C. Mazard
202-589-1837
cmazard@dbmlawgroup.com