# C_2015314EN.01000401.xml

| 23.9.2015 | EN | Official Journal of the European Union | C 314/4 |
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23.9.2015

EN

Official Journal of the European Union

C 314/4

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Final report of the hearing officer (1)

1

Slovak Telekom

(AT.39523)

(2015/C 314/04)

I.   INTRODUCTION

INTRODUCTION

| (1) | The hearing officer originally responsible for this case was Mr Michael Albers. He organised and conducted the oral hearing and submitted an interim report to the competent member of the Commission in accordance with Article 14 of Decision 2011/695/EU. Following the departure of Mr Albers from the Commission, I took over this case as from 16 October 2013. |
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(1)

The hearing officer originally responsible for this case was Mr Michael Albers. He organised and conducted the oral hearing and submitted an interim report to the competent member of the Commission in accordance with Article 14 of Decision 2011/695/EU. Following the departure of Mr Albers from the Commission, I took over this case as from 16 October 2013.

| (2) | Thus, as regards the procedural steps that took place before my appointment, this report is based on the findings of the previous hearing officer. |
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(2)

Thus, as regards the procedural steps that took place before my appointment, this report is based on the findings of the previous hearing officer.

II.   PROCEDURE

PROCEDURE

1.   Investigation phase

Investigation phase

| (3) | The proceeding was initiated by the Commission ex officio in June 2008, following indications of low broadband penetration and delayed triple play launch in the Slovak Republic. Inspections were carried out at the premises of Slovak Telekom (‘ST’) from 13 to 15 January 2009 and a second time, on 13 and 14 July 2009. The proceedings were formally opened on 8 April 2009 against ST and on 13 December 2010 against Deutsche Telekom (‘DT’). |
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(3)

The proceeding was initiated by the Commission ex officio in June 2008, following indications of low broadband penetration and delayed triple play launch in the Slovak Republic. Inspections were carried out at the premises of Slovak Telekom (‘ST’) from 13 to 15 January 2009 and a second time, on 13 and 14 July 2009. The proceedings were formally opened on 8 April 2009 against ST and on 13 December 2010 against Deutsche Telekom (‘DT’).

ex officio

| (4) | ST lodged actions for annulment against two Commission requests for information covering data from the period prior to the accession of Slovak Republic to the EU (i.e. prior to 1 May 2004), on the ground that the Commission had no competence to request and use such information. The General Court rejected both actions of ST (2). |
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(4)

ST lodged actions for annulment against two Commission requests for information covering data from the period prior to the accession of Slovak Republic to the EU (i.e. prior to 1 May 2004), on the ground that the Commission had no competence to request and use such information. The General Court rejected both actions of ST (2).

i.e.

2

2.   Statement of Objections

Statement of Objections

| (5) | A Statement of Objections (‘SO’) addressed to ST and DT was adopted on 7 May 2012. In the SO, the Commission preliminarily found that ST had abused its dominant position on the market for wholesale broadband access (‘WBA’) services in the Slovak Republic, through the following conduct: (i) refusal to supply and margin squeeze regarding the unbundled access to the local loop (‘ULL’), starting from 12 August 2005; (ii) margin squeeze and refusal to supply regarding the regional WBA, starting from 6 June 2007; and (iii) margin squeeze regarding the national WBA, starting from 1 May 2004. The Commission concluded preliminarily in the SO that the conduct of ST amounted to a violation of Article 102 TFEU, which started on 1 May 2004 and was still on-going at the time of the SO. The SO also preliminarily found DT liable for the suspected infringements of ST on the ground that it was the parent company and was in a position to exercise decisive influence and actually exercised such influence. |
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(5)

A Statement of Objections (‘SO’) addressed to ST and DT was adopted on 7 May 2012. In the SO, the Commission preliminarily found that ST had abused its dominant position on the market for wholesale broadband access (‘WBA’) services in the Slovak Republic, through the following conduct: (i) refusal to supply and margin squeeze regarding the unbundled access to the local loop (‘ULL’), starting from 12 August 2005; (ii) margin squeeze and refusal to supply regarding the regional WBA, starting from 6 June 2007; and (iii) margin squeeze regarding the national WBA, starting from 1 May 2004. The Commission concluded preliminarily in the SO that the conduct of ST amounted to a violation of Article 102 TFEU, which started on 1 May 2004 and was still on-going at the time of the SO. The SO also preliminarily found DT liable for the suspected infringements of ST on the ground that it was the parent company and was in a position to exercise decisive influence and actually exercised such influence.

3.   Access to the file and extension of the time limit to reply to the SO

Access to the file and extension of the time limit to reply to the SO

| (6) | ST and DT were granted access to the Commission file via access-to-file CD-ROMs on 15 and 18 May 2012. |
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(6)

ST and DT were granted access to the Commission file via access-to-file CD-ROMs on 15 and 18 May 2012.

| (7) | Upon request, ST was granted additional access to the file by DG Competition in July and August 2012. Upon ST's request, DG Competition disclosed some of the previously redacted parts of the SO. For other parts of the SO the Commission accepted DT's request for confidential treatment. |
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(7)

Upon request, ST was granted additional access to the file by DG Competition in July and August 2012. Upon ST's request, DG Competition disclosed some of the previously redacted parts of the SO. For other parts of the SO the Commission accepted DT's request for confidential treatment.

| (8) | In July 2012, DT complained about the quality of the German version of the SO it received. One month later, DG Competition sent a corrigendum. |
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(8)

In July 2012, DT complained about the quality of the German version of the SO it received. One month later, DG Competition sent a corrigendum.

| (9) | As a result of ST's requests for additional access to the file and DT's complaint, the deadline to reply to the SO was extended for both parties by 3 weeks, until 6 September 2012. |
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(9)

As a result of ST's requests for additional access to the file and DT's complaint, the deadline to reply to the SO was extended for both parties by 3 weeks, until 6 September 2012.

4.   Interested Third Persons

Interested Third Persons

| (10) | On 9 July 2012, the hearing officer received an application to be heard as a third person from Slovanet, an alternative telecommunication operator in the Slovak Republic. Slovanet demonstrated ‘sufficient interest’ and was therefore admitted to be heard in writing by the Commission. Slovanet did not request to participate in the oral hearing. |
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(10)

On 9 July 2012, the hearing officer received an application to be heard as a third person from Slovanet, an alternative telecommunication operator in the Slovak Republic. Slovanet demonstrated ‘sufficient interest’ and was therefore admitted to be heard in writing by the Commission. Slovanet did not request to participate in the oral hearing.

III.   ORAL HEARING

ORAL HEARING

| (11) | The oral hearing took place on 6 and 7 November 2012. Both ST and DT participated. |
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(11)

The oral hearing took place on 6 and 7 November 2012. Both ST and DT participated.

IV.   ADDITIONAL ACCESS TO THE FILE AFTER THE SO

ADDITIONAL ACCESS TO THE FILE AFTER THE SO

1.   Letter of Facts

Letter of Facts

| (12) | On 6 December 2013 and 10 January 2014, the Commission addressed respectively to ST and DT a Letter of Facts bringing to their attention new evidence that it intended to rely upon in a possible future decision, and granted them the opportunity to submit written comments. The Commission also indicated that it intended to take the view that any future decision addressed to ST and DT should cover only the abuses regarding the access to the ULL, and that the infringement period would consequently start on 12 August 2005 and continued until at least 31 December 2010. |
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(12)

On 6 December 2013 and 10 January 2014, the Commission addressed respectively to ST and DT a Letter of Facts bringing to their attention new evidence that it intended to rely upon in a possible future decision, and granted them the opportunity to submit written comments. The Commission also indicated that it intended to take the view that any future decision addressed to ST and DT should cover only the abuses regarding the access to the ULL, and that the infringement period would consequently start on 12 August 2005 and continued until at least 31 December 2010.

| (13) | Together with the Letter of Facts, the Commission provided ST and DT with access to all documents which were included in the file following the SO. Upon ST's request, DG Competition disclosed previously redacted parts of a document mentioned in the Letter of Facts, and also provided ST and DT with additional documents that were not initially in the Commission file. |
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(13)

Together with the Letter of Facts, the Commission provided ST and DT with access to all documents which were included in the file following the SO. Upon ST's request, DG Competition disclosed previously redacted parts of a document mentioned in the Letter of Facts, and also provided ST and DT with additional documents that were not initially in the Commission file.

| (14) | Further to requests for extensions of the deadline to respond which were granted by DG Competition, ST and DT replied in writing to the Letter of Facts on, respectively, 21 February (ST) and 6 March (DT) 2014. |
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(14)

Further to requests for extensions of the deadline to respond which were granted by DG Competition, ST and DT replied in writing to the Letter of Facts on, respectively, 21 February (ST) and 6 March (DT) 2014.

2.   Request of DT for an oral hearing

Request of DT for an oral hearing

| (15) | In its reply to the Letter of Facts and in a subsequent letter of 8 April 2014 addressed to DG Competition, DT requested an oral hearing. DG Competition refused this request by letters of 21 March and 15 April 2014, and on 4 September 2014, DT referred the matter to me. I rejected this request on the ground that the Letter of Facts did not entitle DT to an oral hearing, and that on the other hand, the Letter of Facts could not be considered as a Supplementary SO as it did not introduce any new objections or altered the objections set out in the SO. |
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(15)

In its reply to the Letter of Facts and in a subsequent letter of 8 April 2014 addressed to DG Competition, DT requested an oral hearing. DG Competition refused this request by letters of 21 March and 15 April 2014, and on 4 September 2014, DT referred the matter to me. I rejected this request on the ground that the Letter of Facts did not entitle DT to an oral hearing, and that on the other hand, the Letter of Facts could not be considered as a Supplementary SO as it did not introduce any new objections or altered the objections set out in the SO.

3.   Request for access to the margin squeeze analysis

Request for access to the margin squeeze analysis

| (16) | On 16 January 2014, ST requested access to any revised margin squeeze calculations that the Commission may have made since adoption of the SO. It argued that these calculations should have been included in the Letter of Facts and that they were necessary for the proper exercise of ST's right to be heard. DT also made a similar request to DG Competition on 1 March 2014. DG Competition rejected both parties' claims pointing out that at that stage of the procedure the Commission intended to retain in a possible future decision the same margin squeeze principles and formulas used in the SO, and to update the calculations by accepting some of ST's arguments and calculations as outlined in ST's reply to the SO, and by rebutting others. |
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(16)

On 16 January 2014, ST requested access to any revised margin squeeze calculations that the Commission may have made since adoption of the SO. It argued that these calculations should have been included in the Letter of Facts and that they were necessary for the proper exercise of ST's right to be heard. DT also made a similar request to DG Competition on 1 March 2014. DG Competition rejected both parties' claims pointing out that at that stage of the procedure the Commission intended to retain in a possible future decision the same margin squeeze principles and formulas used in the SO, and to update the calculations by accepting some of ST's arguments and calculations as outlined in ST's reply to the SO, and by rebutting others.

| (17) | ST subsequently referred the matter to me. By letters of 5 February and 25 April 2014, I rejected ST's claims. Firstly, the margin squeeze analysis was still ongoing at the time of ST's request, and was thus an internal document, which as such was not accessible. Secondly, I considered, on the basis of settled case law (3), that there exists no rule requiring the Commission to hear ST on the final position it intends to reach on its margin squeeze calculations, provided however that such position would not lead to raising new objections. In this respect, I had no indication that any of the Commission's intended changes of the margin squeeze calculations would alter the objections set out in the SO in a manner which would be unfavourable to ST. |
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(17)

ST subsequently referred the matter to me. By letters of 5 February and 25 April 2014, I rejected ST's claims. Firstly, the margin squeeze analysis was still ongoing at the time of ST's request, and was thus an internal document, which as such was not accessible. Secondly, I considered, on the basis of settled case law (3), that there exists no rule requiring the Commission to hear ST on the final position it intends to reach on its margin squeeze calculations, provided however that such position would not lead to raising new objections. In this respect, I had no indication that any of the Commission's intended changes of the margin squeeze calculations would alter the objections set out in the SO in a manner which would be unfavourable to ST.

3

| (18) | However, in the interest of transparency, during state of play meetings which took place in September 2014, DG Competition showed to ST and DT the margin squeeze calculations and explained to them in detail the changes made to the calculations and the methodology used, and replied to a number of questions from the parties. |
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(18)

However, in the interest of transparency, during state of play meetings which took place in September 2014, DG Competition showed to ST and DT the margin squeeze calculations and explained to them in detail the changes made to the calculations and the methodology used, and replied to a number of questions from the parties.

| (19) | On 6 October 2014, I received letters from ST and DT claiming that during the state of play meetings DG Competition had presented to them new facts and methodologies, in particular with respect to the margin squeeze calculations, and requesting the opportunity to be heard on them in writing and at an oral hearing. After a careful review, I rejected these requests on the ground that in the draft decision the Commission did not introduce any new principles and approaches to the detriment to the parties in this respect. |
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(19)

On 6 October 2014, I received letters from ST and DT claiming that during the state of play meetings DG Competition had presented to them new facts and methodologies, in particular with respect to the margin squeeze calculations, and requesting the opportunity to be heard on them in writing and at an oral hearing. After a careful review, I rejected these requests on the ground that in the draft decision the Commission did not introduce any new principles and approaches to the detriment to the parties in this respect.

| (20) | DT also requested access to ST's reply to the Letter of Facts. DG Competition granted this request purely in the interest of transparency, with an opportunity to provide further comments. |
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(20)

DT also requested access to ST's reply to the Letter of Facts. DG Competition granted this request purely in the interest of transparency, with an opportunity to provide further comments.

V.   THE DRAFT DECISION

THE DRAFT DECISION

| (21) | After having heard the addressees of the SO in writing and orally, the Commission decided to drop the allegations of abuses regarding the regional and national WBA, and to retain only the allegation of abuses regarding the access to the ULL (4). The overall infringement period was consequently reduced, as the starting period shifted from 1 May 2004 to 12 August 2005, and in addition, the end of the infringement period was set at 31 December 2010. |
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(21)

After having heard the addressees of the SO in writing and orally, the Commission decided to drop the allegations of abuses regarding the regional and national WBA, and to retain only the allegation of abuses regarding the access to the ULL (4). The overall infringement period was consequently reduced, as the starting period shifted from 1 May 2004 to 12 August 2005, and in addition, the end of the infringement period was set at 31 December 2010.

4

| (22) | Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with the objections in respect of which ST and DT have been afforded the opportunity of making known their views, and I have come to a positive conclusion. |
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(22)

Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with the objections in respect of which ST and DT have been afforded the opportunity of making known their views, and I have come to a positive conclusion.

| (23) | Overall, I conclude that all parties have been able to effectively exercise their procedural rights in this case. |
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(23)

Overall, I conclude that all parties have been able to effectively exercise their procedural rights in this case.

Brussels, 10 October 2014.

Joos STRAGIER

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(1)  Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29) (‘Decision 2011/695/EU’).

1

(2)  Judgment of the General Court of 22 March 2012 in Joined Cases T-458/09 and T-171/10 Slovak Telekom a.s. v Commission, EU:T:2012:145.

2

Slovak Telekom a.s. v Commission

(3)  Case T-392/09, garantovana a.s. v Commission, EU:T:2012:674, paragraph 74; and, Case T-15/02 BASF v Commission EU:T:2006:74, paragraph 94.

3

garantovana a.s. v Commission,

BASF v Commission

(4)  See paragraph (12) above.

4

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