On 27 September 2017, the District Court of Rotterdam dismissed claims by Vodafone that KPN abused its dominant position on the market for Virtual Internet Service Provider (VISP) services. In essence, the Court found that KPN did not have a dominant position on this hypothetical market because several companies had developed alternatives to KPN's services.
In 2007, KPN (through its subsidiary Tiscali) started to provide VISP services to Vodafone. These services allowed Vodafone to develop and offer retail internet, television and telephone ("Triple Play") services. In 2009, KPN announced its intention to terminate the VISP services agreement. After Vodafone objected to the termination, the two companies concluded a new agreement in 2011.
According to Vodafone, KPN abused its dominant position by terminating the original agreement and subsequently failing to comply with its obligations under the new VISP services agreement. This resulted in the delay of Vodafone's planned launch of television services through KPN's copper network until the end of 2014. According to Vodafone, this allowed KPN to continue to strengthen its own position on the retail market without having to face competition from Vodafone.
The District Court concluded that KPN did not have a dominant position on the hypothetical market for VISP services. In that regard it considered that KPN was unable to act independently of its competitors, because companies such as Tele2, BBned and Online were capable of developing their own television platforms, either using services provided by competitors of KPN such as Samsung, or by developing such a platform themselves. Vodafone had also argued that KPN's services were the only suitable option available. However, the Court considered that KPN's attractiveness as a service provider in this case was the result of Vodafone's own strategic choices and not because there was a lack of alternatives.
This article was published in the Competition Law Newsletter of October 2017. Other articles in this newsletter:
- Court of Justice landmark judgment: Intel's EUR 1.06 billion fine is sent back to the General Court
- Court of Justice upholds fine imposed on Philips and LG in the cathode ray tubes cartel
- Court of Justice clarifies that a change from sole to joint control requires EU clearance only if the joint venture is "full-function"
- Court of Justice provides guidance on examining excessive prices as abuse of a dominant position
- Curaçao Competition Act entered into force on 1 September 2017