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Decision against Telekom Slovenije, dd concerning abuse of dominant position overturned by the Supreme Court

Decision against Telekom Slovenije, dd concerning abuse of dominant position overturned by the Supreme Court

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The leading Slovenian mobile telephony operator, and fixed-line incumbent, recently underwent privatization proceedings which were unsuccessfully closed in August 2015 (see www.sdh.si/en-us/Novica/1052).  On 19 August 2015, Telekom Slovenije, dd (‘TS’) informed the public that the Supreme Court of the Republic of Slovenia had overturned Administrative Court’s decision in an abuse of dominance case relating to the bit-stream broadband access interconnection market through the copper network in the Republic of Slovenia—a tying sale of an Asymmetric Digital Subscriber Line (‘ADSL’) connection with prior purchase of Integrated Services over Digital Network (‘ISDN’). This announcement can be read here.

The definition of the concept of tying under Slovenian law generally follows the definition on the EU level, more information on which can be found in paras 17.027 – 17.054 of Whish and Bailey, Competition Law (8th edn, OUP 2015) and paras 4.474 – 4.557 of Faull and Nikpay (eds) The EU Law of Competition (3rd edn, OUP 2014). The abuse in this case allegedly consisted of contractual tying: suppliers of internet services could not get access to the ADSL connection for a consumer (without an existing ISDN connection) if the ISDN connection was not purchased from TS simultaneously, even though such an ISDN connection was not requested and also not technically indispensable. TS thereby allegedly limited the technological process and conditioned the conclusion of contract on acceptance of supplementary obligations which, by their nature or according to commercial usage, had no connection with the subject of the contract.

The case commenced in October 2004 when the Slovenian Competition Protection Office (now Competition Protection Agency (‘CPA’)) initiated abuse of dominance proceedings against TS due to alleged tying in violation of the national equivalent of Article 102 TFEU. The first abuse finding decision of the Competition Protection Office was overturned by the Administrative Court. Repeated administrative proceedings were then completed before the CPA in October 2013, resulting in a finding of abuse in the period from 1 December 2002 until 5 September 2005, which the Administrative Court confirmed in December 2014. This event prompted certain associations, including the Slovene Consumers’ Protection Association (‘ZPS’), to issue alerts advising consumers allegedly damaged by the described conduct—by around EUR 100 per ISDN connection—on the procedure for filing individual damages claims against TS. The ZPS has more information on this here. However, following the Supreme Court decision, the administrative matter will once again be heard by the Administrative Court.

The Supreme Court decided on several important substantial and procedural aspects that are likely to affect future Slovenian abuse of dominance cases and also other competition cases. Among others, it decided that an omission can also represent abuse of a dominant position: an action of a dominant undertaking is not required to constitute an abuse. The Supreme Court also decided which competition legislation was to be used in administrative proceedings if the law applicable at the time of the alleged violation had changed by the time of the CPA decision-making. Finally, the Supreme Court left the door open for a potential preliminary ruling request in spite of a purely Slovenian law violation. In this respect, the Supreme Court referred to Autorità Garante della Concurrenza e del Mercato v Ente tabacchi italiani, Reference for a preliminary ruling, Case C-280/06; [2007] ECR I-10893; [2008] 4 CMLR 277, 11 December 2007.

Nataša Pipan Nahtigal, Attorney-at-Law, Odvetniki Šelih & partnerji, o.p., d.o.o