On 3 September 2018, the Trade and Industry Appeals Tribunal (CBb) annulled the market analysis decision regarding 24-hour business mail issued by the Dutch Authority for Consumers and Markets (ACM) on 27 July 2017. In appeal proceedings filed by PostNL, the CBb ruled that the ACM had failed to demonstrate that digital mail was not part of the relevant market for 24-hour business mail.
On the basis of a market consultation conducted in 2014, the ACM identified competition concerns in its finding that PostNL had significant market power on the market for 24-hour physical business mail and effectively refused to offer competitors access to its network and associated facilities. In order to remove these concerns, the ACM imposed access, tariff and transparency obligations on PostNL.
In its appeal, PostNL argued that the ACM had erroneously excluded the market segment for digital mail from the relevant market. The ACM had defined the relevant market on which PostNL allegedly had significant market power exclusively on the basis of product characteristics. PostNL claimed that the market segment for digital mail formed part of the same market as physical mail and put forward an SSNIP test to substantiate that statement.
The CBb held that there is no general obligation for the ACM to quantitatively substantiate its choice for a particular relevant market definition. An approach based on product characteristics may be sufficient in certain circumstances. This does not mean, however, that the ACM has full discretion to refrain from a quantitative method such as the SSNIP test. When the definition of the relevant market on the basis of product characteristics leads to ambiguous results, an SSNIP test, for example, may be required.
According to the CBb, it was not enough for the ACM to rely on a market definition based on product characteristics since PostNL had submitted an SSNIP test that had a different outcome. Therefore, the ACM should have explained why an SSNIP test was not necessary or would not have led to a different market definition. The CBb concluded that the ACM had failed to sufficiently demonstrate why the digital mail segment fell outside the market for 24-hour business mail and had not fulfilled its burden of proof with regard to explaining why the SSNIP test submitted by PostNL was irrelevant given the circumstances of the case.
The CBb ruled that the ACM’s definition of the relevant market could not be maintained. Subsequently, it annulled the market analysis decision and consequently cancelled the obligations imposed on PostNL in that decision.
This article was published in the Competition Law Newsletter of October 2018. Other articles in this newsletter:
1. Court of Justice refers case against Infineon in relation to smart card chips cartel back to the General Court
2. EFTA Court offers guidance for assessing national limitation periods for follow-on damages claims
3. UK Court upholds fine against Ping for online sales ban