On 25 July 2018, the European Court of Justice rejected Orange Polska's appeal relating to a European Commission decision finding an abuse of dominance on the Polish wholesale broadband market. The judgment clarifies that the Commission does not have to take into account the actual or likely effects of an infringement when determining the amount of the fine.
In 2011, the Commission found that Orange Polska had abused its dominant position on several Polish telecom markets by proposing unreasonable terms to alternative operators, delaying the process of negotiating agreements and limiting access to its network and to subscriber lines. The appeal brought before the General Court was dismissed in its entirety [see our January 2016 Newsletter]. Orange Polska subsequently lodged an appeal with the Court of Justice.
In its second ground of appeal, Orange Polska submitted that the Commission should have shown the existence of the actual or likely effects of the infringement, as the Commission had taken those effects into account in the assessment of the gravity of the infringement. The Court of Justice ruled that Orange's argument was based on an erroneous reading of the fining decision, as the Commission had not taken the effects of the infringement into account when determining the amount of the fine. Consequently, the Commission did not have to show the existence of those effects.
The Court's ruling is contrary to the Opinion of Advocate General Wathelet, who argued that the Commission is obliged to take into consideration the actual or likely impact of the infringement when calculating the amount of the fine in the case of an abuse of a dominant position. In the Advocate General's view, such an effects-based approach followed from the Court's landmark judgment in Intel. In Intel, the Court ruled that if an undertaking submits that a certain allegedly abusive practice is not capable of restricting competition, the Commission will need to carry out a detailed economic examination of the alleged negative effects on competition before an infringement of Article 102 TFEU can be established [see our October 2017 Newsletter]. The Orange Polska judgment clarifies that this reasoning cannot be applied by analogy to the Commission's determination of the amount of the fine and that the Commission in that context has a discretion not to take into account the actual or likely effects of the infringement.
This article was published in the Competition Law Newsletter of August 2018. Other articles in this newsletter:
- General Court underlines importance of Commission's duty to state reasons
- General Court dismisses appeals by investor against power cable cartel fine
- Google receives a second record fine of EUR 4.34 billion for imposing restrictions on Android device makers
- European Commission issues a new Best Practices Code for State aid control
- District Court in the Netherlands rules on limitation periods in CRT case
- Court of Appeal in the Netherlands decides to appoint independent economic experts in TenneT v ABB
- Belgian Court of Cassation annuls decision prohibiting pharmacists from using Google Adwords