Saturday, May 17, 2014

Deutsche Telekom AG v. Commission European Court of Justice case brief summary

Deutsche Telekom AG v. Commission European Court of Justice 2008 


Facts: DT was monopoly with sole access to the local loop. Charged higher wholesale than retail prices.
Claim: Price squeeze restricted competition in the mkt for retail access services.
Holding: Harm to competition
Reasoning: Small market shares of competitors are evidence of the restrictions that the applicant's pricing practices have imposed on the growth of competition in these markets.
Failure of regulator to act would NOT absolve DT from a violation of EU law. COMPETITORS had to resort to cross-subsidization in order to be able to remain competitive on the market in access services.
Postscript: Competition Commissioner Kroes said that the margin squeeze was harmful to consumers because competition between operators is the best means to bring overall prices down.
Europe rejects Chicago School. EU would never say that monopoly prices are okay as Roberts said in Linkline.

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