On 17 December 2015, the General Court ("GC") handed down its judgment on appeal, dismissing the actions brought before it by Orange Polska S.A. ("OP", formerly Telekommunikacje Polska ("TP")). OP appealed against a Commission decision from 2011, which imposed a EUR 127.5 million fine on TP for abusing its dominant position on the Polish wholesale broadband market.
TP was the incumbent telecoms operator in Poland. Polish national regulation compelled TP, in view of its significant market power, to grant alternative operators ("AOs") access to its network in order to allow for effective competition on the downstream markets.
The GC agreed with the Commission that the Polish regulation had not been effective in opening up competition on the wholesale market for broadband internet access. The Commission found that from 2005 until 2009 TP engaged in abusive conduct towards AOs consisting of multiple elements, such as proposing unreasonable terms for access to its wholesale broadband products, delaying the process of negotiating agreements about access terms and limiting access to its network. The abusive conduct was found to constitute a single and continuous infringement of Article 102 TFEU.
OP did not dispute the existence of the infringement but argued on appeal that the Commission erred in calculating the basic amount of the fine. In particular, OP claimed that the Commission did not take account of the varying duration and intensity of the individual elements constituting the infringement in its fine calculation. The GC, however, concluded that the Commission took due account of the differing duration and intensity of the separate elements and did not err by looking at the elements as a whole when assessing the gravity of the infringement. Contrary to OP's claim, the GC also found that the Commission had not taken into account the actual effects of the infringement in assessing its gravity and, consequently, did not have to provide any evidence to this effect.
Furthermore, OP asserted that the Commission failed to take mitigating circumstances into consideration. OP claimed that TP had made investments following an agreement with the national regulator, voluntarily terminated the infringement and offered to make commitments. However, the GC held that the investments were not made with a view to compensating the AOs and end users. It further held that TP did not terminate the infringement immediately after the Commission intervened. Finally, the commitments did not go beyond TP's obligations to cooperate with the Commission. Therefore, none of the foregoing circumstances could justify a fine reduction.
The GC's judgment shows that high fines can be imposed for abuse of a dominant position, even if it concerns non-price abuses. The French competition authority recently also rendered a decision imposing a EUR 350 million fine on Orange for abusing its market dominance in France.
This article was published in the Competition Law Newsletter of January 2016. Other articles in this newsletter: