Notice on the application of the competition rules to access agreements in the telecommunications sector - framework, relevant markets and principles
Date: 1998-08-22
Institutions: European Commission
Subjects: competition law, competition policy, easement, telecommunications

C  265/2

EN

Official  Journal  of  the  European  Communities

22.8.98

Notice  on  the  application  of  the  competition  rules  to  access  agreements  in  the
telecommunications  sector

FRAMEWORK,  RELEVANT  MARKETS  AND  PRINCIPLES

(98/C  265/02)

(Text  with  EEA  relevance)

PREFACE

In  the  telecommunications 
participants  the  benefits  of  liberalisation.

industry,  access  agreements  are  central 

in  allowing  market

The  purpose  of  this  notice  is  threefold:

-(cid:217)to  set  out  access  principles  stemming  from  Community  competition  law  as  shown  in  a  large
number  of  Commission  decisions  in  order  to  create  greater  market  certainty  and  more
stable  conditions  for  investment  and  commercial  initiative  in  the  telecoms  and  multimedia
sectors;

-(cid:217)to  define  and  clarify  the  relationship  between  competition  law  and  sector  specific  legislation
under  the  Article  100a  framework  (in  particular  this  relates  to  the  relationship  between
competition  rules  and  open  network  provision  legislation);

-(cid:217)to  explain  how  competition  rules  will  be  applied  in  a  consistent  way  across  the  sectors
involved  in  the  provision  of  new  services,  and  in  particular  to  access  issues  and  gateways  in
this  context.

INTRODUCTION

in  a  competitive  environment 

1.(cid:217)The  timetable  for  full  liberalisation  in  the  telecom(cid:220)
munications  sector  has  now  been  established,  and
most  Member  States  had  to  remove  the  last  barriers
to  the  provision  of  telecommunications  networks
and  services 
to
consumers  by  1  January  1998(cid:216)(˛).  As  a  result  of  this
liberalisation  a  second  set  of  related  products  or
services  will  emerge  as  well  as  the  need  for  access
to  facilities  necessary  to  provide  these  services.  In
this  sector,  interconnection  to  the  public  switched
telecommunications  network  is  a  typical,  but  not
the  only,  example  of  such  access.  The  Commission
has  stated  that  it  will  define  the  treatment  of  access
agreements  in  the  telecommunications  sector  under
the  competition  rules(cid:216)(ˇ).  This  notice,  therefore,
addresses  the  issue  of  how  competition  rules  and

procedures  apply 
the
context  of  harmonised  EC  and  national  regulation
in  the  telecommunications  sector.

to  access  agreements 

in 

the 

2.(cid:217)The  regulatory  framework  for  the  liberalisation  of
liberalisation
telecommunications  consists  of 
directives  issued  under  Article  90  of  the  Treaty  and
the  harmonisation  Directives  under  Article  100a,
including  in  particular  the  open  network  provision
(ONP)  framework.  The  ONP  framework  provides
harmonised  rules  for  access  and  interconnection  to
the  telecommunications  networks  and  the  voice
telephony  services.  The  legal  framework  provided
by  the  liberalisation  and  harmonisation  legislation  is
the
to  any  action 
the  background 
Commission  in  its  application  of  the  competition
rules.  Both  the  liberalisation  legislation  (the  Article
90  Directives)(cid:216)(—)  and  the  harmonisation  legislation

taken  by 

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Official  Journal  of  the  European  Communities

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(the  ONP  Directives)(cid:216)((cid:209))  are  aimed  at  ensuring  the
attainment  of  the  objectives  of  the  Community  as
laid  out  in  Article  3  of  the  Treaty,  and  specifically,
the  establishment  of 
that
"a 
competition  in  the  internal  market  is  not  distorted’
and 
the
abolition,  as  between  Member  States,  of  obstacles
to  the  free  movement  of  goods,  persons,  services
and  capital’.

internal  market  characterised  by 

system  ensuring 

"an 

3.(cid:217)The  Commission  has  published  Guidelines  on  the
application  of  EEC  competition  rules  in  the  tele(cid:220)
communications  sector(cid:216)((cid:210)).  The  present  notice 
is
intended  to  build  on  those  Guidelines,  which  do
not  deal  explicitly  with  access  issues.

4.(cid:217)In  the  telecommunications  sector,  liberalisation  and
harmonisation  legislation  permit  and  simplify  the
task  of  Community  firms  in  embarking  on  new
activities  in  new  markets  and  consequently  allow
users  to  benefit  from  increased  competition.  These
advantages  must  not  be  jeopardised  by  restrictive  or
abusive  practices  of  undertakings:  the  Community’s
competition  rules  are  therefore  essential  to  ensure
the  completion  of  this  development.  New  entrants
must  in  the  initial  stages  be  guaranteed  the  right  to
have  access  to  the  networks  of  incumbent  telecom(cid:220)
munications  operators  (TOs).  Several  authorities,  at
the  regional,  national  and  Community  levels,  have
a  role  in  regulating  this  sector.  If  the  competition
process  is  to  work  well  in  the  internal  market,
institutions
effective  coordination  between 
must  be  ensured.

these 

In 

this 

rules. 

context, 

competition 

5.(cid:217)Part  I  of  the  notice  sets  out  the  legal  framework
and  details  how  the  Commission  intends  to  avoid
unnecessary  duplication  of  procedures  while  safe(cid:220)
guarding  the  rights  of  undertakings  and  users  under
the 
the
Commission’s  efforts  to  encourage  decentralised
application  of  the  competition  rules  by  national
courts  and  national  authorities  aim  at  achieving
remedies  at  a  national  level,  unless  a  significant
Community  interest  is  involved  in  a  particular  case.
In  the  telecommunications  sector,  specific  proce(cid:220)
dures 
likewise  aim  at
resolving  access  problems  in  the  first  place  at  a
decentralised,  national 
further
possibility  for  conciliation  at  Community  level  in
certain 
the
Commission’s  approach  to  market  definition  in  this
the
sector.  Part  III  details 
Commission  will  follow  in  the  application  of  the
it  aims  to  help  telecommuni(cid:220)
competition  rules: 
their  access
cations  market  participants 

in  the  ONP  framework 

circumstances.  Part 

the  principles 

level,  with 

defines 

shape 

that 

II 

a 

the  competition 

agreements  by  explaining 
law
requirements.  The  principles  set  out  in  this  Notice
apply  not  only  to  traditional  fixed  line  telecom(cid:220)
munications,  but  also  to  all  telecommunications,
including  areas  such  as  satellite  communications
and  mobile  communications.

is  based  on 

6.(cid:217)The  notice  is  based  on  the  Commission’s  experience
in  several  cases(cid:216)((cid:211)),  and  certain  studies  into  this  area
carried  out  on  behalf  of  the  Commission(cid:216)((cid:212)).  As  this
the  generally  applicable
notice 
competition  rules,  the  principles  set  out 
in  this
Notice  will,  to  extent  that  comparable  problems
arise,  be  equally  applicable  in  other  areas,  such  as
in  digital  communications  sectors
issues 
access 
generally.  Similarly, 
the  principles
contained  in  the  Treaty  (cid:220)  will  be  of  relevance  to
any  company  occupying  a  dominant  position
including  those  in  fields  other  than  telecommuni(cid:220)
cations.

several  of 

to  competitive  markets.  Given 

7.(cid:217)The  present  notice  is  based  on  issues  which  have
arisen  during  the  initial  stages  of  transition  from
monopolies 
the
telecommunications,  broad(cid:220)
convergence  of 
casting  and  information  technology  sectors(cid:216)((cid:213)),  and
the  increased  competition  on  these  markets,  other
issues  will  emerge.  This  may  make  it  necessary  to
adapt  the  scope  and  principles  set  out  in  this  notice
to  these  new  sectors.

the 

8.(cid:217)The  principles  set  out  in  this  document  will  apply
to  practices  outside  the  Community  to  the  extent
that  such  practices  have  an  effect  on  competition
within  the  Community  and  affect  trade  between
Member  States.  In  applying  the  competition  rules,
the  Commission 
is  obliged  to  comply  with  the
Community’s  obligations  under  the  WTO  telecom(cid:220)
munications  agreement(cid:216)((cid:214)).  The  Commission  also
notes  that  there  are  continuing  discussions  with
regard  to  the  international  accounting  rates  system
in  the  context  of  the  ITU.  The  present  notice  is
without  prejudice  to  the  Commission’s  position  in
these  discussions.

9.(cid:217)This  notice  does  not  in  any  way  restrict  the  rights
conferred  on 
individuals  or  undertakings  by
Community  law,  and  is  without  prejudice  to  any
interpretation  of  the  Community  competition  rules

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Official  Journal  of  the  European  Communities

22.8.98

Instance  of 

that  may  be  given  by  the  Court  of  Justice  or  the
Court  of  First 
the  European
Communities.  This  notice  does  not  purport  to  be  a
comprehensive  analysis  of  all  possible  competition
in  this  sector:  other  problems  already
problems 
exist  and  more  are  likely  to  arise  in  the  future.

10.(cid:217)The  Commission  will  consider  whether  the  present
notice  should  be  amended  or  added  to  in  the  light
of  experience  gained  during  the  first  period  of  a
liberalised  telecommunications  environment.

PART  I  -  FRAMEWORK

1.(cid:217)Competition  rules  and  sector  specific  regulation

11.(cid:217)Access  problems  in  the  broadest  sense  of  the  word
can  be  dealt  with  at  different  levels  and  on  the  basis
of  a  range  of  legislative  provisions,  of  both  national
and  Community  origin.  A  service  provider  faced
with  an  access  problem  such  as  a  TO’s  unjustified
refusal  to  supply  (or  on  reasonable  terms)  a  leased
line  needed  by  the  applicant  to  provide  services  to
its  customers  could  therefore  contemplate  a  number
of  routes  to  seek  a  remedy.  Generally  speaking,
aggrieved  parties  will  experience  a  number  of
benefits,  at 
in  seeking
redress  at  a  national  level.  At  a  national  level,  the
applicant  has  two  main  choices,  namely  (1)  specific
national  regulatory  procedures  now  established  in
accordance  with  Community  law  and  harmonised
under  Open  Network  Provision  (see  footnote  4),
and 
and/or
Community  law  before  a  national  court  or  national
competition  authority(cid:216)(˛˝).

action  under  national 

initial  stage, 

in  an 

least 

(2) 

an 

the 

that 

latter 

is  applying 

law,  based  as 

13.(cid:217)The  Commission  recognises  that  national  regu(cid:220)
latory  authorities  (NRAs)(cid:216)(˛˛)  have  different  tasks,
and  operate  in  a  different  legal  framework  from  the
Commission  when 
the
competition  rules.  First,  the  NRAs  operate  under
national  law,  albeit  often  implementing  European
law.  Secondly, 
is  on
considerations  of  telecommunications  policy,  may
have  objectives  different  to,  but  consistent  with,  the
objectives  of  Community  competition  policy.  The
Commission  cooperates  as  far  as  possible  with  the
NRAs,  and  NRAs  also  have  to  cooperate  between
themselves  in  particular  when  dealing  with  cross(cid:220)
border  issues(cid:216)(˛ˇ).  Under  Community  law,  national
authorities, 
including  regulatory  authorities  and
competition  authorities,  have  a  duty  not  to  approve
any  practice  or  agreement  contrary  to  Community
competition  law.

it 

sector.  NRAs 

14.(cid:217)Community  competition  rules  are  not  sufficient  to
remedy  all  of  the  various  problems  in  the  telecom(cid:220)
munications 
therefore  have  a
significantly  wider  ambit  and  a  significant  and
far(cid:220)reaching  role  in  the  regulation  of  the  sector.  It
that  as  a  matter  of
should  also  be  noted 
Community 
inde(cid:220)
pendent(cid:216)(˛—).

the  NRAs  must  be 

law, 

obligations 

transparency 

15.(cid:217)It  is  also  important  to  note  that  the  ONP  Directives
impose  on  TOs  having  significant  market  power
and
certain 
of 
non(cid:220)discrimination 
that
would  normally  be  imposed  under  Article  86  of  the
Treaty.  ONP  Directives 
lay  down  obligations
relating  to  transparency,  obligations  to  supply  and
pricing  practices.  These  obligations  are  enforced  by
the  NRAs,  which  also  have  jurisdiction  to  take
steps  to  ensure  effective  competition(cid:216)(˛(cid:209)).

that  go  beyond 

those 

12.(cid:217)Complaints  made  to  the  Commission  under  the
competition  rules  in  the  place  of  or  in  addition  to
national  courts,  national  competition  authorities
and/or  to  national  regulatory  authorities  under
ONP  procedures  will  be  dealt  with  according  to
the  priority  which  they  deserve  in  view  of  the
urgency,  novelty  and  transnational  nature  of  the
problem  involved  and  taking  into  account  the  need
to  avoid  duplicate  proceedings  (see  points  23  et
seq.).

networks 

16.(cid:217)In  relation  to  Article  86,  this  notice  is  written,  for
convenience,  in  most  respects  as  if  there  was  one
telecommunications  operator  occupying  a  dominant
position.  This  will  not  necessarily  be  the  case  in  all
Member  States:  for  example  new  telecommuni(cid:220)
increasingly  wide
offering 
cations 
coverage  will  develop  progressively.  These  alter(cid:220)
native  telecommunications  networks  may,  or  may
ultimately,  be  large  and  extensive  enough  to  be
partly  or  even  wholly  substitutable  for  the  existing
national  networks,  and  this  should  be  kept  in  mind.
The  existence  and  the  position  on  the  market  of
competing  operators  will  be  relevant  in  determining
joint  dominant  positions  exist:
whether  sole  or 

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references  to  the  existence  of  a  dominant  position
in  this  notice  should  be  read  with  this  in  mind.

so  as  to  undermine  those  rights,  the  Member  State
may  itself  be  liable  for  damages  to  those  harmed  by
this  action(cid:216)(ˇˇ).  In  addition,  NRAs  have  jurisdiction
under  the  ONP  directives  to  take  steps  to  ensure
effective  competition(cid:216)(ˇ—).

17.(cid:217)Given 

for 

resources 

the
the  Commission’s  responsibility 
Community’s  competition  policy,  the  Commission
must  serve  the  Community’s  general  interest.  The
administrative 
the  Commission’s
disposal  to  perform  its  task  are  necessarily  limited
and  cannot  be  used  to  deal  with  all  the  cases
brought 
is
therefore  obliged,  in  general,  to  take  all  organisa(cid:220)
tional  measures  necessary  for  the  performance  of  its
task  and,  in  particular,  to  establish  priorities(cid:216)(˛(cid:210)).

its  attention.  The  Commission 

to 

at 

18.(cid:217)The  Commission  has  therefore 

having 

complaints 

proceedings 

indicated  that 

it
intends,  in  using  its  decision(cid:220)making  powers,  to
and
concentrate  on  notifications, 
own(cid:220)initiative 
particular
political,  economic  or 
legal  significance  for  the
Community(cid:216)(˛(cid:211)).  Where  these  features  are  absent  in
a  particular  case,  notifications  will  not  normally  be
dealt  with  by  means  of  a  formal  decision,  but  rather
a  comfort  letter  (subject  to  the  consent  of  the
parties),  and  complaints  should,  as  a  rule,  be
handled  by  national  courts  or  other  relevant  auth(cid:220)
orities.  In  this  context,  it  should  be  noted  that  the
competition  rules  are  directly  effective(cid:216)(˛(cid:212))  so  that
Community  competition  law  is  enforceable  in  the
national  courts.  Even  where  other  Community
legislation  has  been  respected,  this  does  not  remove
the  Community
comply  with 
the  need 
competition  rules(cid:216)(˛(cid:213)).

to 

20.(cid:217)Access 

regulate 

agreements 

in  principle 

the
provision  of  certain  services  between  independent
undertakings  and  do  not  result  in  the  creation  of  an
autonomous  entity  which  would  be  distinct  from
the  parties  to  the  agreements.  Access  agreements
are  thus  generally  outside  the  scope  of  the  Merger
Regulation(cid:216)(ˇ(cid:209)).

21.(cid:217)Under  Regulation  No  17(cid:216)(ˇ(cid:210)), 

access 

against 

agreement  or 

the  Commission
could  be  seised  of  an 
issue  relating  to  access
agreements  by  way  of  a  notification  of  an  access
the  parties
agreement  by  one  or  more  of 
involved(cid:216)(ˇ(cid:211)),  by  way  of  a  complaint  against  a
restrictive 
the
behaviour  of  a  dominant  company  in  granting  or
refusing  access(cid:216)(ˇ(cid:212)),  by  way  of  a  Commission
into  such  a  grant  or
own(cid:220)initiative  procedure 
inquiry(cid:216)(ˇ(cid:213)).  In
refusal,  or  by  way  of  a  sector 
addition,  a  complainant  may  request 
the
that 
Commission  take  interim  measures  in  circumstances
where  there  is  an  urgent  risk  of  serious  and  irrep(cid:220)
arable  harm  to  the  complainant  or  to  the  public
interest(cid:216)(ˇ(cid:214)).  It  should  however,  be  noted  in  cases  of
great  urgency 
that  procedures  before  national
courts  can  usually  result  more  quickly  in  an  order
to  end  the  infringements  than  procedures  before  the
Commission(cid:216)(—˝).

19.(cid:217)Other  national  authorities, 

in  particular  NRAs
juris(cid:220)
acting  within  the  ONP  framework,  have 
diction  over  certain  access  agreements  (which  must
be  notified  to  them).  However,  notification  of  an
agreement  to  an  NRA  does  not  make  notification
of  an  agreement  to  the  Commission  unnecessary.
The  NRAs  must  ensure  that  actions  taken  by  them
are 
competition
law(cid:216)(˛(cid:214)).  This  duty  requires  them  to  refrain  from
action 
effective
the 
law  rights  under  the
protection  of  Community 
competition  rules(cid:216)(ˇ˝).  Therefore, 
they  may  not
approve  arrangements  which  are  contrary  to  the
competition  rules(cid:216)(ˇ˛).  If  the  national  authorities  act

consistent  with  Community 

that  would  undermine 

a 

to  both 

regulatory 

22.(cid:217)There  are  a  number  of  areas  where  agreements  will
the  competition  rules  and
be  subject 
national  or  European  sector  specific  measures,  most
notably  Internal  Market  measures.  In  the  telecom(cid:220)
munications  sector,  the  ONP  Directives  aim  at
access
establishing 
agreements.  Given  the  detailed  nature  of  ONP
rules  and  the  fact  that  they  may  go  beyond  the
requirements  of  Article  86,  undertakings  operating
in  the  telecommunications  sector  should  be  aware
that  compliance  with  the  Community  competition
rules  does  not  absolve  them  of  their  duty  to  abide
by  obligations  imposed  in  the  ONP  context,  and
vice  versa.

regime 

for 

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2.(cid:217)Commission 

action 

in 

relation 

to 

access

agreements (—˛)

should 

23.(cid:217)Access  agreements  taken  as  a  whole  are  of  great
significance,  and  it  is  therefore  appropriate  for  the
Commission  to  spell  out  as  clearly  as  possible  the
Community  legal  framework  within  which  these
agreements 
Access
be 
agreements  having  restrictive  clauses  will  involve
issues  under  Article  85.  Agreements  which  involve
dominant,  or  monopolist,  undertakings 
involve
the
issues:  concerns  arising 
Article  86 
dominance  of  one  or  more  of  the  parties  will
generally  be  of  greater  significance  in  the  context
of  a  particular  agreement  than  those  under  Ar(cid:220)
ticle  85.

concluded. 

from 

N o t i f i c a t i o n s

24.(cid:217)In  applying  the  competition  rules,  the  Commission
will  build  on  the  ONP  Directives  which  set  a
framework  for  action  at  the  national  level  by  the
NRAs.  Where  agreements  fall  within  Article  85(1),
they  must  be  notified  to  the  Commission  if  they  are
to  benefit  from  an  exemption  under  Article  85(3).
Where  agreements  are  notified,  the  Commission
intends  to  deal  with  some  notifications  by  way  of
formal  decisions,  following  appropriate  publicity  in
the  Official  Journal  of  the  European  Communities,
and  in  accordance  with  the  principles  set  out  below.
Once  the  legal  principles  have  been  clearly  estab(cid:220)
lished,  the  Commission  then  proposes  to  deal  by
way  of  comfort 
letter  with  other  notifications
raising  the  same  issues.

3. Complaints

by 

that 

certain 

require 

circumstances, 

25.(cid:217)Natural  or  legal  persons  with  a  legitimate  interest
may,  under 
submit  a
complaint  to  the  Commission,  requesting  that  the
Commission 
an
decision 
infringement  of  Article  85  or  Article  86  of  the
Treaty  be  brought  to  an  end.  A  complainant  may
additionally  request 
take
that 
interim  measures  where  there  is  an  urgent  risk  of
serious  and 
irreparable  harm(cid:216)(—ˇ).  A  prospective
complainant  has  other  equally  or  even  more
effective  options,  such  as  an  action  before  a
national  court.  In  this  context,  it  should  be  noted
that  procedures  before  the  national  courts  can  offer

the  Commission 

considerable 
companies,  such  as  in  particular(cid:216)(——):

advantages 

for 

individuals 

and

-(cid:217)national  courts  can  deal  with  and  award  a  claim
for  damages  resulting  from  an  infringement  of
the  competition  rules,

-(cid:217)national  courts  can  usually  adopt 

interim
measures  and  order 
termination  of  an
infringement  more  quickly  than  the  Commission
is  able  to  do,

the 

-(cid:217)before  national  courts,  it  is  possible  to  combine
a  claim  under  Community  law  with  a  claim
under  national  law,

-(cid:217)legal  costs  can  be  awarded  to  the  successful

applicant  before  a  national  court.

Furthermore,  the  specific  national  regulatory  prin(cid:220)
ciples  as  harmonised  under  ONP  Directives  can
offer  recourse  both  at  the  national  level  and,  if
necessary,  at  the  Community  level.

3.1.(cid:217)Use  of  national  and  ONP  procedures

to 

In 

evaluating 

its  attention. 

26.(cid:217)As  referred  to  above(cid:216)(—(cid:209))  the  Commission  will  take
into  account  the  Community  interest  of  each  case
the
brought 
Community  interest,  the  Commission  examines  ".(cid:216).(cid:216).
the  significance  of  the  alleged 
infringement  as
regards  the  functioning  of  the  common  market,  the
probability  of  establishing  the  existence  of  the
investigation
infringement  and  the  scope  of  the 
required  in  order  to  fulfil,  under  the  best  possible
conditions,  its  task  of  ensuring  that  Articles  85  and
86  are  complied  with  .(cid:216).(cid:216).’(cid:216)(—(cid:210)).

Another  essential  element  in  this  evaluation  is  the
extent  to  which  a  national  judge  is  in  a  position  to
provide  an  effective  remedy  for  an  infringement
of  Article  85  or  86.  This  may  prove  difficult,
for  example, 
involving  extra(cid:220)territorial
elements.

in  cases 

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27.(cid:217)Article  85(1)  and  Article  86  of  the  Treaty  produce
direct  effects  in  relations  between  individuals  which
must  be  safeguarded  by  national  courts(cid:216)(—(cid:211)).  As
regards  actions  before  the  NRA,  the  ONP  Inter(cid:220)
an
connection  Directive  provides 
authority  has  power  to  intervene  and  order  changes
in  relation  to  both  the  existence  and  content  of
access  agreements.  NRAs  must  take  into  account
"the  need  to  stimulate  a  competitive  market’  and
may  impose  conditions  on  one  or  more  parties,
inter  alia,  "to  ensure  effective  competition’(cid:216)(—(cid:212)).

such 

that 

to 

efforts 

28.(cid:217)The  Commission  may  itself  be  seised  of  a  dispute
rules,  or
the  competition 
either  pursuant 
to  an  ONP  conciliation  procedure.
pursuant 
lead  to  unnecessary
Multiple  proceedings  might 
duplication 
the
investigative 
of 
Commission  and  the  national  authorities.  Where
complaints  are  lodged  with  the  Commission  under
Article  3  of  Regulation  No  17  while  there  are
related  actions  before  a  relevant  national  or
European  authority  or  court, 
the  Directorate(cid:220)
General  for  Competition  will  generally  not  initially
pursue  any  investigation  as  to  the  existence  of  an
infringement  under  Article  85  or  86  of  the  Treaty.
This  is  subject,  however,  to  the  following  points.

by 

3.2. Safeguarding  complainant’s  rights

29.(cid:217)Undertakings  are  entitled  to  effective  protection  of
their  Community  law  rights(cid:216)(—(cid:213)).  Those  rights  would
if  national  proceedings  were
be  undermined 
lead  to  an  excessive  delay  of  the
allowed  to 
Commission’s 
satisfactory
action,  without 
resolution  of  the  matter  at  a  national  level.  In  the
innovation  cycles  are
telecommunications  sector, 
relatively 
in
substantial  delay 
short,  and  any 
resolving  an  access  dispute  might  in  practice  be
equivalent  to  a  refusal  of  access,  thus  prejudging
the  proper  determination  of  the  case.

a 

form  of  relief  which  would  safeguard  the  rights  of
the  complainant.  If  the  matter  has  not  reached  such
a  resolution  then,  prima  facie,  the  rights  of  the
parties  are  not  being  effectively  protected,  and  the
Commission  would  in  principle,  upon  request  by
the  complainant,  begin  its  investigations  into  the
its  normal  procedures,
case 
in  cooperation  with  the
after  consultation  and 
the
national  authority 
Commission  will  not  begin 
investigations
where  there  is  already  an  ongoing  action  under
ONP  conciliation  procedures.

in  question.  In  general, 
such 

in  accordance  with 

31.(cid:217)In  addition,  the  Commission  must  always  look  at
each  case  on  its  merits:  it  will  take  action  if  it  feels
is  a  substantial
that 
Community  interest  affecting,  or  likely  to  affect,
competition  in  a  number  of  Member  States.

in  a  particular  case,  there 

3.3.(cid:217)Interim  measures

32.(cid:217)As  regards  any  request  for  interim  measures,  the
existence  or  possibility  of  national  proceedings  is
relevant  to  the  question  of  whether  there  is  a  risk  of
serious  and 
irreparable  harm.  Such  proceedings
should,  prima  facie,  remove  the  risk  of  such  harm
and  it  would  therefore  not  be  appropriate  for  the
Commission 
the
absence  of  evidence  that  the  risk  would  nevertheless
remain.

interim  measures 

to  grant 

in 

33.(cid:217)The  availability  of  and 

for 

criteria 

interim
injunctive  relief  is  an  important  factor  which  the
Commission  must  take  into  account  in  reaching  this
prima  facie  conclusion.  If  interim  injunctive  relief
were  not  available,  or  if  such  relief  was  not  likely
the  complainant’s  rights
adequately 
under  Community 
law,  the  Commission  would
consider  that  the  national  proceedings  did  not
remove  the  risk  of  harm,  and  could  therefore
commence  its  examination  of  the  case.

to  protect 

30.(cid:217)The  Commission  therefore  takes  the  view  that  an
access  dispute  before  an  NRA  should  be  resolved
within  a  reasonable  period  of 
time,  normally
speaking  not  extending  beyond  six  months  of  the
matter  first  being  drawn  to  the  attention  of  that
authority.  This  resolution  could  take  the  form  of
either  a  final  determination  of  the  action  or  another

4. Own(cid:220)initiative  investigation  and  sector  inquiries

34.(cid:217)If  it  appears  necessary,  the  Commission  will  open
an  own(cid:220)initiative  investigation.  It  can  also  launch  a

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inquiry, 

sector 
the
Advisory  Committee  of  Member  State  competition
authorities.

to  consultation  of 

subject 

(b) the  breach  of  Article  85  is  particularly  serious.

The  Commission  has  recently  published  Guidelines
on  how  fines  will  be  calculated(cid:216)((cid:209)(cid:209)).

5. Fines

35.(cid:217)The  Commission  may  impose  fines  of  up  to  10(cid:216)%
of  the  annual  worldwide  turnover  of  undertakings
which 
intentionally  or  negligently  breach  Ar(cid:220)
ticle  85(1)  or  Article  86(cid:216)(—(cid:214)).  Where  agreements
have  been  notified  pursuant  to  Regulation  No  17
for  an  exemption  under  Article  85(3),  no  fine  may
be  levied  by  the  Commission  in  respect  of  activities
described 
in  the  notification(cid:216)((cid:209)˝)  for  the  period
following  notification.  However,  the  Commission
may  withdraw 
fines  by
informing  the  undertakings  concerned  that,  after
preliminary  examination,  it  is  of  the  opinion  that
Article  85(1)  of 
that
the  Treaty  applies  and 
application  of  Article  85(3)  is  not  justified(cid:216)((cid:209)˛).

immunity 

from 

the 

38.(cid:217)Notification  to  the  NRA  is  not  a  substitute  for  a
notification  to  the  Commission  and  does  not  limit
the  possibility  for  interested  parties  to  submit  a
complaint 
the
Commission  to  begin  an  own(cid:220)initiative  investigation
into  access  agreements.  Nor  does  such  notification
limit  the  rights  of  a  party  to  seek  damages  before  a
national  court  for  harm  caused  by  anti(cid:220)competitive
agreements(cid:216)((cid:209)(cid:210)).

the  Commission,  or 

for 

to 

PART  II  -  RELEVANT  MARKETS

36.(cid:217)The  ONP 

Interconnection  Directive  has 

two
particular  provisions  which  are  relevant  to  fines
under  the  competition  rules.  First,  it  provides  that
interconnection  agreements  must  be  communicated
to 
to
the  relevant  NRAs  and  made  available 
interested  third  parties,  with  the  exception  of  those
parts  which  deal  with  the  commercial  strategy  of
the  parties(cid:216)((cid:209)ˇ).  Secondly,  it  provides  that  the  NRA
must  have  a  number  of  powers  which  it  can  use  to
influence 
interconnection
agreements(cid:216)((cid:209)—).  These  provisions  ensure  that  appro(cid:220)
priate  publicity  is  given  to  the  agreements,  and
provide  the  NRA  with  the  opportunity  to  take
steps,  where  appropriate, 
to  ensure  effective
competition  on  the  market.

amend 

the 

or 

37.(cid:217)Where  an  agreement  has  been  notified  to  an  NRA,
but  has  not  been  notified  to  the  Commission,  the
Commission  does  not  consider 
it  would  be
generally  appropriate  as  a  matter  of  policy  to
impose  a  fine  in  respect  of  the  agreement,  even  if
the 
contain
conditions  in  breach  of  Article  85.  A  fine  would,
however,  be  appropriate  in  some  cases,  for  example
where:

agreement  ultimately  proves 

to 

(a)(cid:217)the  agreement  proves  to  contain  provisions  in

breach  of  Article  86;  and/or

39.(cid:217)In  the  course  of 

investigating  cases  within  the
framework  set  out  in  Part  I  above,  the  Commission
will  base  itself  on  the  approach  to  the  definition  of
the  Commission’s
relevant  markets  set  out 
Notice  on  the  definition  of  the  relevant  market  for
the  purposes  of  Community  competition  law(cid:216)((cid:209)(cid:211)).

in 

40.(cid:217)Firms  are 

to 

three  main 

sources  of
subject 
competitive  constraints;  demand 
substitutability,
supply  substitutability  and  potential  competition,
with  the  first  constituting  the  most  immediate  and
effective  disciplinary  force  on  the  suppliers  of  a
given  product  or  service.  Demand  substitutability  is
therefore  the  main  tool  used  to  define  the  relevant
product  market 
of
on  which 
competition  for  the  purposes  of  Article  85(1)  and
Article  86  can  be  identified.

restrictions 

41.(cid:217)Supply  substitutability  may  in  appropriate  circum(cid:220)
stances  be  used  as  a  complementary  element  to
define  relevant  markets.  In  practice  it  cannot  be
clearly  distinguished  from  potential  competition.
Supply 
potential
substitutability 
competition  are  used  for  the  purpose  of  deter(cid:220)
mining  whether  the  undertaking  has  a  dominant
position  or  whether  the  restriction  of  competition  is
significant  within  the  meaning  of  Article  85,  or
whether  there  is  elimination  of  competition.

side 

and 

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42.(cid:217)In  assessing  relevant  markets  it  is  necessary  to  look
at  developments  in  the  market  in  the  short  term.

The  following  sections  set  out  some  basic  principles
of  particular  relevance  to  the  telecommunications
sector.

1. Relevant  product  market

the  same  regardless  of  the  particular  market  in
question.  Given  the  pace  of  technological  change  in
this  sector,  any  attempt  to  define  particular  product
markets  in  this  notice  would  run  the  risk  of  rapidly
becoming  inaccurate  or  irrelevant.  The  definition  of
particular  product  markets  -  for  example,  the
determination  of  whether  call  origination  and  call
termination  facilities  are  part  of  the  same  facilities
market  -  is  best  done  in  the  light  of  a  detailed
examination  of  an  individual  case.

43.(cid:217)Section  6  of  Form  A/B  defines  the  relevant  product

market  as  follows:

1.1. Services  market

"A  relevant  product  market  comprises  all  those
products  and/or  services  which  are  regarded  as
interchangeable  or  substitutable  by  the  consumer,
by  reason  of  the  products’  characteristics,  their
prices  and  their  intended  use’.

44.(cid:217)Liberalisation  of  the  telecommunications  sector  will
lead  to  the  emergence  of  a  second  type  of  market,
that  of  access  to  facilities  which  are  currently
necessary  to  provide  these  liberalised  services.  Inter(cid:220)
connection  to  the  public  switched  telecommuni(cid:220)
cations  network  would  be  a  typical  example  of  such
it  will  not  be
interconnection, 
access.  Without 
commercially  possible  for  third  parties  to  provide,
for 
telephony
services.

comprehensive 

example, 

voice 

45.(cid:217)It  is  clear,  therefore,  that  in  the  telecommunications
sector  there  are  at 
least  two  types  of  relevant
markets  to  consider  -  that  of  a  service  to  be
provided  to  end  users  and  that  of  access  to  those
facilities  necessary  to  provide  that  service  to  end
users  (information,  physical  network,  etc.).  In  the
context  of  any  particular  case,  it  will  be  necessary
to  define  the  relevant  access  and  services  markets,
such  as  interconnection  to  the  public  telecommuni(cid:220)
cations  network,  and  provision  of  public  voice
telephony  services,  respectively.

if  all  the  suppliers  of  the  services 

46.(cid:217)When  appropriate,  the  Commission  will  use  the  test
of  a  relevant  market  which  is  made  by  asking
whether, 
in
question  raised  their  prices  by  5  to  10(cid:216)%,  their
collective  profits  would  rise.  According  to  this  test,
if  their  profits  would  rise,  the  market  considered  is
a  separate  relevant  market.

47.(cid:217)The  Commission  considers  that  the  principles  under
competition  law  governing  these  markets  remain

48.(cid:217)This  can  be  broadly  defined  as  the  provision  of  any
telecommunications  service  to  users.  Different  tele(cid:220)
considered
services  will 
communications 
substitutable  if  they  show  a  sufficient  degree  of
interchangeability  for  the  end(cid:220)user,  which  would
mean  that  effective  competition  can  take  place
between  the  different  providers  of  these  services.

be 

1.2. Access  to  facilities

49.(cid:217)For  a  service  provider 

the 

to  provide  services 

to  deliver  physically 

to
end(cid:220)users  it  will  often  require  access  to  one  or
facilities.  For
more  (upstream  or  downstream) 
example, 
to
service 
end(cid:220)users,  it  needs  access  to  the  termination  points
of  the  telecommunications  network  to  which  these
end(cid:220)users  are  connected.  This  access  can  be
achieved  at  the  physical  level  through  dedicated  or
shared  local  infrastructure,  either  self  provided  or
leased  from  a  local  infrastructure  provider.  It  can
also  be  achieved  either  through  a  service  provider
who  already  has  these  end(cid:220)users  as  subscribers,  or
through  an 
interconnection  provider  who  has
access  directly  or  indirectly  to  the  relevant  termi(cid:220)
nation  points.

50.(cid:217)In  addition  to  physical  access,  a  service  provider
may  need  access  to  other  facilities  to  enable  it  to
market  its  service  to  end  users:  for  example,  a
service  provider  must  be  able  to  make  end(cid:220)users
aware  of  its  services.  Where  one  organisation  has  a
dominant  position  in  the  supply  of  services  such  as
directory  information,  similar  concerns  arise  as  with
physical  access  issues.

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51.(cid:217)In  many  cases,  the  Commission  will  be  concerned
with  physical  access  issues,  where  what  is  necessary
is  access  to  the  network  facilities  of  the  dominant
TO(cid:216)((cid:209)(cid:212)).

any  exclusive  or  special  rights  owned  by  competing
local  access  providers  are  particularly  relevant(cid:216)((cid:209)(cid:213)).

52.(cid:217)Some  incumbent  TOs  may  be  tempted  to  resist
providing  access  to  third  party  service  providers  or
other  network  operators,  particularly 
in  areas
where  the  proposed  service  will  be  in  competition
with  a  service  provided  by  the  TO  itself.  This
resistance  will  often  manifest  itself  as  unjustified
delay  in  giving  access,  a  reluctance  to  allow  access
or  a  willingness  to  allow  it  only  under  disadvan(cid:220)
tageous  conditions.  It  is  the  role  of  the  competition
rules 
these  prospective  access
markets  are  allowed  to  develop,  and  that  incumbent
TOs  are  not  permitted  to  use  their  control  over
access 
services
stifle  developments  on 
markets.

to  ensure 

that 

the 

to 

53.(cid:217)It  should  be  stressed  that  in  the  telecommunications
sector,  liberalisation  can  be  expected  to  lead  to  the
development  of  new,  alternative  networks  which
will  ultimately  have  an  impact  on  access  market
definition 
incumbent  telecommuni(cid:220)
cations  operator.

involving  the 

2. Relevant  geographic  market

54.(cid:217)Relevant  geographic  markets  are  defined  in  Form

A/B  as  follows:

"The  relevant  geographic  market  comprises  the  area
in  which  the  undertakings  concerned  are  involved
in  the  supply  and  demand  of  products  or  services,
the  conditions  of  competition  are
in  which 
sufficiently  homogeneous  and  which  can  be  distin(cid:220)
guished 
the
conditions  of  competition  are  appreciably  different
in  those  areas.’

from  neighbouring  areas  because 

PART  III  -  PRINCIPLES

56.(cid:217)The  Commission  will  apply  the  following  principles

in  cases  before  it.

law 

rules 

forms  a  coherent 

57.(cid:217)The  Commission  has  recognised  that  "Articles  85
and  86  .(cid:216).(cid:216).  constitute  law  in  force  and  enforceable
throughout  the  Community.  Conflicts  should  not
because
arise  with  other  Community 
Community 
regulatory
framework  .(cid:216).(cid:216).  it  is  obvious  that  Community  acts
adopted  in  the  telecommunications  sector  are  to  be
interpreted  in  a  way  consistent  with  competition
rules,  so  as  to  ensure  the  best  possible  implemen(cid:220)
tation  of  all  aspects  of  the  Community  telecom(cid:220)
munications  policy  .(cid:216).(cid:216).  This  applies,  inter  alia,  to
the 
rules
between 
applicable  to  undertakings  and  the  ONP  rules’(cid:216)((cid:209)(cid:214)).

competition 

relationship 

58.(cid:217)Thus,  competition  rules  continue 

to  apply 

in
circumstances  where  other  Treaty  provisions  or
secondary  legislation  are  applicable.  In  the  context
internal  market  and
of  access  agreements,  the 
competition  provisions  of  Community  law  are  both
important  and  mutually  reinforcing  for  the  proper
functioning  of  the  sector.  Therefore  in  making  an
the
assessment  under 
Commission  will  seek  to  build  as  far  as  possible  on
the  principles  established 
the  harmonisation
legislation.  It  should  also  be  borne  in  mind  that  a
number  of  the  competition  law  principles  set  out
below  are  also  covered  by  specific  rules  in  the
context  of  the  ONP  framework.  Proper  application
of  these  rules  should  often  avoid  the  need  for  the
application  of  the  competition  rules.

competition 

rules, 

the 

in 

55.(cid:217)As  regards 

the  provision  of 

telecommunication
services  and  access  markets,  the  relevant  geographic
market  will  be  the  area  in  which  the  objective
conditions  of  competition  applying 
service
providers  are  similar,  and  competitors  are  able  to
offer  their  services.  It  will  therefore  be  necessary  to
examine  the  possibility  for  these  service  providers  to
access  an  end(cid:220)user  in  any  part  of  this  area,  under
similar  and  economically  viable  conditions.  Regu(cid:220)
latory  conditions  such  as  the  terms  of  licences,  and

to 

59.(cid:217)As  regards  the  telecommunications  sector,  attention
should  be  paid  to  the  cost  of  universal  service  obli(cid:220)
gations.  Article  90(2)  of  the  Treaty  may  justify
exceptions  to  the  principles  of  Articles  85  and  86.
The  details  of  universal  service  obligations  are  a
regulatory  matter.  The 
field  of  application  of
Article  90(2)  has  been  specified  in  the  Article  90
Directives  in  the  telecommunications  sector,  and
the  Commission  will  apply  the  competition  rules  in
this  context.

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60.(cid:217)Articles  85  and  86  of  the  Treaty  apply  in  the
normal  manner  to  agreements  or  practices  which
have  been  approved  or  authorised  by  a  national
authority(cid:216)((cid:210)˝),  or  where  the  national  authority  has
required  the  inclusion  of  terms  in  an  agreement  at
the  request  of  one  or  more  of  the  parties  involved.

access  agreements,  dominance 
from
control  of  facilities  will  be  the  most  relevant  to  the
Commission’s  appraisal.

stemming 

itself  would  be 

61.(cid:217)However,  if  a  NRA  were  to  require  terms  which
were  contrary  to  the  competition  rules,  the  under(cid:220)
takings  involved  would  in  practice  not  be  fined,
in
although  the  Member  State 
breach  of  Article  3(g)  and  Article  5  of 
the
Treaty(cid:216)((cid:210)˛)  and  therefore  subject  to  challenge  by  the
Commission  under  Article  169.  Additionally,  if  an
undertaking  having 
special  or  exclusive  rights
within  the  meaning  of  Article  90,  or  a  State(cid:220)owned
undertaking,  were  required  or  authorised  by  a
national  regulator  to  engage  in  behaviour  consti(cid:220)
tuting  an  abuse  of 
the
Member  State  would  also  be  in  breach  of  Article
90(1)  and  the  Commission  could  adopt  a  decision
requiring  termination  of  the  infringement(cid:216)((cid:210)ˇ).

its  dominant  position, 

62.(cid:217)NRAs  may  require  strict  standards  of  transparency,
obligations  to  supply  and  pricing  practices  on  the
market,  particularly  where  this  is  necessary  in  the
liberalisation.  When  appropriate,
early  stages  of 
legislation  such  as  the  ONP  framework  will  be  used
as  an  aid  in  the  interpretation  of  the  competition
rules(cid:216)((cid:210)—).  Given  the  duty  resting  on  NRAs  to  ensure
that  effective  competition  is  possible,  application  of
the  competition  rules  is  likewise  required  for  an
appropriate  interpretation  of  the  ONP  principles.  It
should  also  be  noted  that  many  of  the  issues  set  out
below  are  also  covered  by  rules  under  the  Full
Competition  Directive  and  the  ONP  Licensing  and
Data  protection  Directives:  effective  enforcement
of  this  regulatory  framework  should  prevent  many
of 
issues  set  out  below  from
arising.

the  competition 

64.(cid:217)Whether  or  not  a  company  is  dominant  does  not
depend  only  on  the  legal  rights  granted  to  that
company.  The  mere  ending  of  legal  monopolies
to  dominance.  Indeed,
does  not  put  an  end 
notwithstanding  the 
liberalisation  Directives,  the
development  of  effective  competition  from  alter(cid:220)
native  network  providers  with  adequate  capacity
and  geographic  reach  will  take  time.

65.(cid:217)The  judgment  of  the  Court  of  Justice  in  Tetra
Pak(cid:216)((cid:210)(cid:209))  is  also  likely  to  prove  important  in  the  tele(cid:220)
communications  sector.  The  Court  held  that  given
the  extremely  close  links  between  the  dominated
and  non(cid:220)dominated  market, 
the
extremely  high  market  share  on  the  dominated
market,  Tetra  Pak  was  "in  a  situation  comparable  to
that  of  holding  a  dominant  position  on  the  markets
in  question  as  a  whole’.

and  given 

The  Tetra  Pak  case  concerned  closely  related  hori(cid:220)
zontal  markets:  the  analysis  is  equally  applicable,
however,  to  closely  related  vertical  markets  which
will  be  common  in  the  telecommunications  sector.
In  the  telecommunications  sector,  it  is  often  the
case  that  a  particular  operator  has  an  extremely
strong  position  on  infrastructure  markets,  and  on
markets  downstream  of  that  infrastructure.  Infra(cid:220)
structure  costs  also  typically  constitute  the  single
largest  cost  of  the  downstream  operations.  Further,
operators  will  often  face  the  same  competitors  on
both  the  infrastructure  and  downstream  markets.

1. Dominance  (Article  86)

66.(cid:217)It  is  therefore  possible  to  envisage  a  number  of
there  will  be  closely  related
situations  where 
markets,  together  with  an  operator  having  a  very
high  degree  of  market  power  on  at  least  one  of
those  markets.

63.(cid:217)In  order  for  an  undertaking  to  provide  services  in
the  telecommunications  services  market, 
it  may
need  to  obtain  access  to  various  facilities.  For  the
provision  of 
for
telecommunications 
interconnection  to  the  public  switched
example, 
telecommunications 
be
necessary.  Access  to  this  network  will  almost  always
be  in  the  hands  of  a  dominant  TO.  As  regards

network  will 

services, 

usually 

for 

67.(cid:217)It  these  circumstances  are  present,  it  may  be  appro(cid:220)
the
priate 
particular  operator  was  in  a  situation  comparable  to
that  of  holding  a  dominant  position  on  the  markets
in  question  as  a  whole.

the  Commission 

find 

that 

to 

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facilities’  will 

68.(cid:217)In  the  telecommunications  sector,  the  concept  of
"essential 
in  many  cases  be  of
relevance  in  determining  the  duties  of  dominant
TOs.  The  expression  essential  facility  is  used  to
is
describe  a 
essential  for  reaching  customers  and/or  enabling
competitors  to  carry  on  their  business,  and  which
cannot  be  replicated  by  any  reasonable  means(cid:216)((cid:210)(cid:210)).

infrastructure  which 

facility  or 

69.(cid:217)A  company  controlling  the  access  to  an  essential
the
facility  enjoys  a  dominant  position  within 
meaning  of  Article  86.  Conversely,  a  company  may
enjoy  a  dominant  position  pursuant  to  Article  86
without  controlling  an  essential  facility.

1.1. Services  market

70.(cid:217)One  of  the  factors  used  to  measure  the  market
power  of  an  undertaking  is  the  sales  attributable  to
that  undertaking,  expressed  as  a  percentage  of  total
sales  in  the  market  for  substitutable  services  in  the
relevant  geographic  area.  As  regards  the  services
market,  the  Commission  will  assess,  inter  alia,  the
turnover  generated  by  the  sale  of  substitutable
services,  excluding  the  sale  or  internal  usage  of
interconnection  services  and  the  sale  or  internal
usage  of 
into
consideration  the  competitive  conditions  and  the
structure  of  supply  and  demand  on  the  market.

infrastructure(cid:216)((cid:210)(cid:211)), 

taking 

local 

the  conveyance  of 

between 
telecommunications
services  and  the  provision  of  these  services  to
end(cid:220)users.  Traditionally,  an  operator  who  is  also  a
service  provider  has  not  required  its  downstream
operating  arm  to  pay  for  access,  and  therefore  it
has  not  been  easy  to  calculate  the  revenue  to  be
allocated  to  the  facility.  In  a  case  where  an
operator  is  providing  both  access  and  services  it  is
necessary  to  separate  so  far  as  possible  the  revenues
as  the  basis  for  the  calculation  of  the  company’s
share  of  whichever  market  is  involved.  Article  8(2)
of  the  Interconnection  Directive  addresses  this  issue
by 
separate
accounting  for  "activities  related  to  interconnection
-  covering  both  interconnection  services  provided
internally  and  interconnection  services  provided  to
others  -  and  other  activities’.  The  proposed
Commission  Recommendation 
on  Accounting
Separation  in  the  context  of  Interconnection  will
also  be  helpful  in  this  regard.

requirement 

introducing 

for 

a 

72.(cid:217)The  economic  significance  of  obtaining  access  also
depends  on  the  coverage  of  the  network  with  which
interconnection  is  sought.  Therefore,  in  addition  to
using  turnover  figures,  the  Commission  will,  where
possible,  also  take 
into  account  the  number  of
customers  who  have  subscribed  to  services  offered
by  the  dominant  company  comparable  with  those
which  the  service  provider  requesting  access  intends
to  provide.  Accordingly,  market  power  for  a  given
undertaking  will  be  measured  partly  by  the  number
of  subscribers  who  are  connected  to  termination
points  of  the  telecommunications  network  of  that
undertaking  expressed  as  a  percentage  of  the  total
number  of  subscribers  connected  to  termination
points  in  the  relevant  geographic  area.

1.2. Access  to  facilities

Supply(cid:220)side  substitutability

leased 

lines  enabling  a 

71.(cid:217)The  concept  of  "access’  as  referred  to  in  point  45
can  relate  to  a  range  of  situations,  including  the
availability  of 
service
provider  to  build  up  its  own  network,  and  intercon(cid:220)
nection  in  the  strict  sense,  that  is  interconnecting
two 
for  example
mobile  and  fixed.  In  relation  to  access  it  is  probable
that  the  incumbent  operator  will  remain  dominant
for  some  time  after  the  legal  liberalisation  has  taken
place.  The  incumbent  operator,  which  controls  the
facilities,  is  often  also  the  largest  service  provider,
and  it  has  in  the  past  not  needed  to  distinguish

telecommunication  networks, 

73.(cid:217)As  stated  in  point  41,  supply(cid:220)side  substitutability  is
also  relevant  to  the  question  of  dominance.  A
market  share  of  over  50(cid:216)%(cid:216)((cid:210)(cid:212))  is  usually  sufficient
to  demonstrate  dominance  although  other  factors
will  be  examined.  For  example,  the  Commission
will  examine 
the  existence  of  other  network
providers,  if  any,  in  the  relevant  geographic  area  to
determine  whether  such  alternative  infrastructures
are  sufficiently  dense  to  provide  competition  to  the
incumbent’s  network  and  the  extent  to  which  it
would  be  possible  for  new  access  providers  to  enter
the  market.

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Other  relevant  factors

anything  to  prevent  the  Commission  from  taking
action  only  under  one  of  the  provisions,  when  both
apply.

74.(cid:217)In  addition  to  market  share  data,  and  supply(cid:220)side
substitutability,  in  determining  whether  an  operator
is  dominant  the  Commission  will  also  examine
whether 
to
facilities  which  cannot  reasonably  be  duplicated
within  an  appropriate  time  frame,  either  for  legal
reasons  or  because  it  would  cost  too  much.

the  operator  has  privileged  access 

75.(cid:217)As  competing  access  providers  appear  and  challenge
the  dominance  of  the  incumbent,  the  scope  of  the
rights  they  receive  from  Member  States’  authorities,
and  notably  their  territorial  reach,  will  play  an
in  the  determination  of  market
important  part 
power.  The  Commission  will  closely  follow  market
evolution  in  relation  to  these  issues  and  will  take
account  of  any  altered  market  conditions  in  its
assessment  of  access  issues  under  the  competition
rules.

1.3. Joint  dominance

76.(cid:217)The  wording  of  Article  86  makes  it  clear  that  the
Article  also  applies  when  more  than  one  company
shares  a  dominant  position.  The  circumstances  in
which  a 
in
which  it  is  abused,  have  not  yet  been  fully  clarified
by  the  case  law  of  the  Community  judicature  or  the
practice  of  the  Commission,  and  the  law  is  still
developing.

joint  dominant  position  exists,  and 

77.(cid:217)The  words  of  Article  86  ("abuse  by  one  or  more
undertakings’)  describe  something  different  from
the  prohibition  of  anti(cid:220)competitive  agreements  or
concerted  practices  in  Article  85.  To  hold  otherwise
would  be  contrary  to  the  usual  principles  of  inter(cid:220)
pretation  of  the  Treaty,  and  would  render  the
words  pointless  and  without  practical  effect.  This
does  not,  however,  exclude  the  parallel  application
of  Articles  85  and  86  to  the  same  agreement  or
practice,  which  has  been  upheld  by  the  Commission
and  the  Court  in  a  number  of  cases(cid:216)((cid:210)(cid:213)),  nor  is  there

78.(cid:217)Two  companies,  each  dominant 

in  a 

in  a  separate
national  market,  are  not  the  same  as  two  jointly
dominant  companies.  For  two  or  more  companies
joint  dominant  position,  they  must
to  be 
together  have 
same  position
the 
vis(cid:220){(cid:220)vis  their  customers  and  competitors  as  a  single
company  has  if  it  is  in  a  dominant  position.  With
specific  reference  to  the  telecommunications  sector,
joint  dominance  could  be  attained  by  two  telecom(cid:220)
munications  infrastructure  operators  covering  the
same  geographic  market.

substantially 

it 

that 

either 

is  necessary, 

for  cooperation,  or 

79.(cid:217)In  addition,  for  two  or  more  companies  to  be
jointly  dominant 
though  not
sufficient,  for  there  to  be  no  effective  competition
between  the  companies  on  the  relevant  market.
This  lack  of  competition  may  in  practice  be  due  to
the  fact  that  the  companies  have  links  such  as
agreements 
interconnection
agreements.  The  Commission  does  not,  however,
consider 
or
Community  law  implies  that  such  links  are  legally
necessary  for  a  joint  dominant  position  to  exist(cid:216)((cid:210)(cid:214)).
It  is  a  sufficient  economic  link  if  there  is  the  kind  of
interdependence  which  often  comes  about  in  oligo(cid:220)
polistic  situations.  There  does  not  seem  to  be  any
reason  in  law  or  in  economic  theory  to  require  any
other  economic 
jointly  dominant
link  between 
companies.  This  having  been  said,  in  practice  such
in  the  telecommunications
links  will  often  exist 
sector  where  national  TOs  nearly  inevitably  have
links  of  various  kinds  with  one  another.

economic 

theory 

local 

the  near 

future  by 

two  operators  - 

80.(cid:217)To  take  as  an  example  access  to  the  local  loop,  in
some  Member  States  this  could  well  be  controlled
in 
the
incumbent  TO  and  a  cable  operator.  In  order  to
provide  particular  services  to  consumers,  access  to
loop  of  either  the  TO  or  the  cable
the 
television  operator  is  necessary.  Depending  on  the
circumstances  of  the  case  and  in  particular  on  the
relationship  between  them,  it  is  possible  that  neither
operator  holds  a  dominant  position: 
together,
however,  they  may  hold  a  joint  monopoly  of  access
to  these  facilities.  In  the  longer  term,  technological
developments  may  lead  to  other  local  loop  access
mechanisms  being  viable,  such  as  energy  networks:

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the  existence  of  such  mechanisms  will  be  taken  into
account  in  determining  whether  dominant  positions
or  joint  dominant  positions  exist.

foreseeable  future.  A  refusal  may  have  "the  effect  of
hindering 
the  degree  of
competition  still  existing 
in  the  market  or  the
growth  of  that  competition’(cid:216)((cid:211)(cid:209)).

the  maintenance  of 

2. Abuse  of  dominance

81.(cid:217)Application  of  Article  86  presupposes  the  existence
of  a  dominant  position  and  some  link  between  the
dominant  position  and  the  alleged  abusive  conduct.
It  will  often  be  necessary  in  the  telecommunications
sector  to  examine  a  number  of  associated  markets,
one  or  more  of  which  may  be  dominated  by  a
particular  operator.  In  these  circumstances,  there
are  a  number  of  possible  situations  where  abuses
could  arise:

-(cid:217)conduct  on  the  dominatd  market  having  effects

on  the  dominated  market(cid:216)((cid:211)˝),

-(cid:217)conduct  on  the  dominated  market  having  effects
dominated

other 

than 

the 

on  markets 
market(cid:216)((cid:211)˛),

-(cid:217)conduct  on  a  market  other  than  the  dominated
market  and  having  effects  on  the  dominated
market(cid:216)((cid:211)ˇ),

-(cid:217)conduct  on  a  market  other  than  the  dominated
market  and  having  effects  on  a  market  other
than  the  dominated  market(cid:216)((cid:211)—).

is  possible 

82.(cid:217)Although  the  factual  and  economic  circumstances
of  the  telecommunications  sector  are  often  novel,  in
it 
to  apply  established
many  cases 
competition 
looking  at
law  principles.  When 
competition  problems  in  this  sector,  it  is  important
to  bear  in  mind  existing  case  law  and  Commission
decisional  practice  on, 
leveraging
market  power,  discrimination  and  bundling.

for  example, 

2.1. Refusal  to  grant  access  to  facilities  and
application  of  unfavourable  terms

83.(cid:217)A  refusal  to  give  access  may  be  prohibited  under
Article  86  if  the  refusal  is  made  by  a  company
which 
its  control  of
facilities,  as  incumbent  TOs  will  usually  be  for  the

is  dominant  because  of 

A  refusal  will  only  be  abusive  if  it  has  exploitative
or  anti(cid:220)competitive  effects.  Service  markets  in  the
telecommunications  sector  will  initially  have  few
competitive  players  and  refusals  will 
therefore
generally  affect  competition  on  those  markets.  In
all  cases  of  refusal,  any  justification  will  be  closely
examined  to  determine  whether  it  is  objective.

84.(cid:217)Broadly  there  are  three  relevant  scenarios:

(a)(cid:217)a  refusal  to  grant  access  for  the  purposes  of  a
service  where  another  operator  has  been  given
access  by  the  access  provider  to  operate  on  that
services  market;

(b) a  refusal  to  grant  access  for  the  purposes  of  a
service  where  no  other  operator  has  been  given
access  by  the  access  provider  to  operate  on  that
services  market;

(c) a  withdrawal  of  access 

from  an  existing

customer.

D i s c r i m i n a t i o n

facilities  owner 

downstream  market  would 

85.(cid:217)As  to  the  first  of  the  above  scenarios,  it  is  clear  that
a  refusal  to  supply  a  new  customer  in  circumstances
where  a  dominant 
is  already
supplying  one  or  more  customers  operating  in  the
constitute
same 
discriminatory  treatment  which,  if  it  would  restrict
competition  on  that  downstream  market,  would  be
an  abuse.  Where  network  operators  offer  the  same,
or  similar,  retail  services  as  the  party  requesting
access,  they  may  have  both  the  incentive  and  the
opportunity  to  restrict  competition  and  abuse  their
dominant  position 
in  this  way.  There  may,  of
course,  be  justifications  for  such  refusal  -  for
example,  vis(cid:220){(cid:220)vis  applicants  which  represent  a
potential  credit  risk.  In  the  absence  of  any  objective
justifications,  a  refusal  would  usually  be  an  abuse
of  the  dominant  position  on  the  access  market.

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86.(cid:217)In  general  terms,  the  dominant  company’s  duty  is
to  provide  access  in  such  a  way  that  the  goods  and
services  offered 
to  downstream  companies  are
available  on  terms  no  less  favourable  than  those
given  to  other  parties,  including  its  own  corre(cid:220)
sponding  downstream  operations.

would  seek  to  offer  new  products  or  services  which
are  not  in  competition  with  products  or  services
already  offered  by  the  dominant  access  operator,
but  for  which  this  operator  is  reluctant  to  provide
access.

Essential  facilities

87.(cid:217)As  to  the  second  of  the  above  situations,  the
question  arises  as  to  whether  the  access  provider
should  be  obliged  to  contract  with  the  service
provider  in  order  to  allow  the  service  provider  to
operate  on  a  new  service  market.  Where  capacity
constraints  are  not  an  issue  and  where  the  company
refusing  to  provide  access  to  its  facility  has  not
provided  access  to  that  facility,  either  to  its  down(cid:220)
stream  arm  or  to  any  other  company  operating  on
that  services  market,  then  it  is  not  clear  what  other
objective  justification  there  could  be.

88.(cid:217)In  the  transport  field(cid:216)((cid:211)(cid:210)),  the  Commission  has  ruled
that  a  firm  controlling  an  essential  facility  must  give
access  in  certain  circumstances(cid:216)((cid:211)(cid:211)).  The  same  prin(cid:220)
ciples  apply  to  the  telecommunications  sector.  If
there  were  no  commercially  feasible  alternatives  to
the  access  being  requested,  then  unless  access  is
granted,  the  party  requesting  access  would  not  be
able  to  operate  on  the  service  market.  Refusal  in
this  case  would  therefore  limit  the  development  of
new  markets,  or  new  products  on  those  markets,
contrary  to  Article  86(b),  or  impede  the  devel(cid:220)
opment  of  competition  on  existing  markets.  A
refusal  having  these  effects  is  likely  to  have  abusive
effects.

89.(cid:217)The  principle  obliging  dominant  companies 

in 

the 

for  most 

telecommunications 
are  monopolies  or 

there 
in  the  provision  of  network 
telecom 

to
in  certain  circumstances  will  often  be
contract 
sector.
relevant 
virtual
Currently, 
infra(cid:220)
monopolies 
the
structure 
Community.  Even  where  restrictions  have  already
been,  or  will  soon  be,  lifted,  competition  in  down(cid:220)
stream  markets  will  continue  to  depend  upon  the
pricing  and  conditions  of  access 
to  upstream
network  services  that  will  only  gradually  reflect
competitive  market  forces.  Given  the  pace  of  tech(cid:220)
nological  change  in  the  telecommunications  sector,
it  is  possible  to  envisage  situations  where  companies

services 

in 

environment.  A 

incumbent  operators 

90.(cid:217)The  Commission  must  ensure  that  the  control  over
facilities  enjoyed  by 
is  not
used  to  hamper  the  development  of  a  competitive
telecommunications 
company
which  is  dominant  on  a  market  for  services  and
which  commits  an  abuse  contrary  to  Article  86  on
that  market  may  be  required,  in  order  to  put  an
end  to  the  abuse,  to  supply  access  to  its  facility  to
that  market.  In
one  or  more  competitors  on 
particular,  a  company  may  abuse 
its  dominant
position  if  by  its  actions  it  prevents  the  emergence
of  a  new  product  or  service.

91.(cid:217)The  starting  point  for  the  Commission’s  analysis
will  be  the  identification  of  an  existing  or  potential
market  for  which  access 
is  being  requested.  In
order 
to  determine  whether  access  should  be
ordered  under  the  competition  rules,  account  will
be  taken  of  a  breach  by  the  dominant  company  of
its  duty  not  to  discriminate  (see  below)  or  of  the
following  elements,  taken  cumulatively:

(a)(cid:217)access  to  the  facility  in  question  is  generally
essential  in  order  for  companies  to  compete  on
that  related  market(cid:216)((cid:211)(cid:212)).

The  key  issue  here  is  therefore  what  is  essential.
It  will  not  be  sufficient  that  the  position  of  the
company  requesting  access  would  be  more
advantageous  if  access  were  granted  -  but
refusal  of  access  must  lead  to  the  proposed
activities  being  made  either 
impossible  or
seriously  and  unavoidably  uneconomic.

for 

example, 

alternative 

Although, 
infra(cid:220)
structure  may  as  from  1  July  1996  be  used  for
liberalised  services,  it  will  be  some  time  before
this  is  in  many  cases  a  satisfactory  alternative  to
the  facilities  of  the  incumbent  operator.  Such
alternative  infrastructure  does  not  at  present
offer  the  same  dense  geographic  coverage  as
that  of  the  incumbent  TO’s  network;

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(b) there  is  sufficient  capacity  available  to  provide

access;

access  is  refused  or  made  more  difficult  and  the
downstream  service  markets  are  thus  limited.

(c) the  facility  owner  fails  to  satisfy  demand  on  an
existing  service  or  product  market,  blocks  the
emergence  of  a  potential  new 
service  or
product,  or  impedes  competition  on  an  existing
or  potential  service  or  product  market;

94.(cid:217)Three  important  elements  relating  to  access  which
could  be  manipulated  by  the  access  provider  in
order,  in  effect,  to  refuse  to  provide  access  are
timing,  technical  configuration  and  price.

(d) the  company  seeking  access  is  prepared  to  pay
the  reasonable  and  non(cid:220)discriminatory  price
respects  accept
and  will  otherwise 
non(cid:220)discriminatory 
and
conditions;

in  all 
access 

terms 

(e) there  is  no  objective  justification  for  refusing  to

provide  access.

justifications 

in  this  context  could
Relevant 
include  an  overriding  difficulty  of  providing
access  to  the  requesting  company,  or  the  need
for  a  facility  owner  which  has  undertaken
investment  aimed  at  the  introduction  of  a  new
product  or  service  to  have  sufficient  time  and
opportunity  to  use  the  facility  in  order  to  place
that  new  product  or  service  on  the  market.
However,  although  any  justification  will  have
to  be  examined  carefully  on  a  case(cid:220)by(cid:220)case
basis,  it  is  particularly  important  in  the  telecom(cid:220)
munications 
to
end(cid:220)users  which  will  arise  from  a  competitive
environment  are  not  undermined  by  the  actions
of  the  former  State  monopolists  in  preventing
competition  from  emerging  and  developing.

benefits 

sector 

that 

the 

92.(cid:217)In  determining  whether  an  infringement  of  Article
86  has  been  committed,  account  will  be  taken  both
of  the  factual  situation  in  that  and  other  geographic
areas,  and,  where  relevant,  the  relationship  between
the  access  requested  and  the  technical  configuration
of  the  facility.

93.(cid:217)The  question  of  objective  justification  will  require
particularly  close  analysis  in  this  area.  In  addition
to  determining  whether  difficulties  cited 
in  any
particular  case  are  serious  enough  to  justify  the
refusal  to  grant  access,  the  relevant  authorities  must
also  decide  whether  these  difficulties  are  sufficient
to  outweigh  the  damage  done  to  competition  if

95.(cid:217)Dominant  TOs  have  a  duty  to  deal  with  requests
for  access  efficiently:  undue  and  inexplicable  or
unjustified  delays  in  responding  to  a  request  for
access  may  constitute  an  abuse.  In  particular,
however,  the  Commission  will  seek  to  compare  the
response  to  a  request  for  access  with:

(a)(cid:217)the  usual  time  frame  and  conditions  applicable
when  the  responding  party  grants  access  to  its
facilities  to 
its  own  subsidiary  or  operating
branch;

(b) responses 

to  requests  for  access 

to  similar

facilities  in  other  Member  States;

(c) the  explanations  given  for  any  delay  in  dealing

with  requests  for  access.

96.(cid:217)Issues  of  technical  configuration  will  similarly  be
closely  examined  in  order  to  determine  whether
they  are  genuine.  In  principle,  competition  rules
require  that  the  party  requesting  access  must  be
granted  access  at  the  most  suitable  point  for  the
this  point 
requesting  party,  provided 
is
technically 
access  provider.
Questions  of  technical  feasibility  may  be  objective
justifications  for  refusing  to  supply  -  for  example,
the  traffic  for  which  access  is  sought  must  satisfy
the  relevant 
infra(cid:220)
structure  -  or  there  may  be  questions  of  capacity
rationing  may
restraints,  where  questions  of 
arise(cid:216)((cid:211)(cid:213)).

technical  standards  for 

feasible 

that 

the 

the 

for 

97.(cid:217)Excessive  pricing  for  access,  as  well  as  being
to  an

itself(cid:216)((cid:211)(cid:214)),  may  also  amount 

abusive 
effective  refusal  to  grant  access.

in 

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98.(cid:217)There  are  a  number  of  elements  of  these  tests
which  require  careful  assessment.  Pricing  questions
in  the  telecommunications  sector  will  be  facilitated
by  the  obligations  under  ONP  Directives  to  have
transparent  cost(cid:220)accounting  systems.

Withdrawal  of  supply

supply 

99.(cid:217)As  to  the  third  of  the  situations  referred  to  in  point
84,  some  previous  Commission  decisions  and  the
case  law  of  the  Court  have  been  concerned  with
the  withdrawal  of 
from  downstream
competitors.  In  Commercial  Solvents,  the  Court
held  that  "an  undertaking  which  has  a  dominant
position  on  the  market  in  raw  materials  and  which,
with  the  object  of  reserving  such  raw  material  for
manufacturing  its  own  derivatives,  refuses  to  supply
a  customer,  which  is  itself  a  manufacturer  of  these
derivatives,  and 
therefore  risks  eliminating  all
competition  on  the  part  of  this  customer,  is  abusing
its  dominant  position  within  the  meaning  of  Article
86’(cid:216)((cid:212)˝)

100.(cid:217)Although  this  case  dealt  with  the  withdrawal  of  a
product,  there  is  no  difference  in  principle  between
this  case  and 
the  withdrawal  of  access.  The
unilateral  termination  of  access  agreements  raises
substantially  similar 
in
relation  to  refusals.  Withdrawal  of  access  from  an
existing  customer  will  usually  be  abusive.  Again,
objective  reasons  may  be  provided  to  justify  the
be
such 
termination.  Any 
proportionate  to  the  effects  on  competition  of  the
withdrawal.

issues  to  those  examined 

reasons  must 

2.2. Other  forms  of  abuse

101.(cid:217)Refusals  to  provide  access  are  only  one  form  of
possible  abuse  in  this  area.  Abuses  may  also  arise  in
the  context  of  access  having  been  granted.  An
abuse  may  occur  inter  alia  where  the  operator  is
behaving 
the
limit  markets  or
operator’s  actions  otherwise 
technical 
are
non(cid:220)exhaustive  examples  of  abuse  which  can  take
place.

in  a  discriminatory  manner  or 

development.  The 

following 

Network  configuration

102.(cid:217)Network  configuration  by  a  dominant  network
operator  which  makes  access  objectively  more
difficult  for  service  providers(cid:216)((cid:212)˛)  could  constitute
an  abuse  unless  it  were  objectively  justifiable.  One
objective  justification  would  be  where  the  network
the
configuration 
network  generally.

efficiency  of 

improves 

the 

Tying

103.(cid:217)This  is  of  particular  concern  where  it  involves  the
tying  of  services  for  which  the  TO  is  dominant  with
those  for  which  it  is  not(cid:216)((cid:212)ˇ).  Where  the  vertically
integrated  dominant  network  operator  obliges  the
party  requesting  access  to  purchase  one  or  more
services(cid:216)((cid:212)—)  without  adequate  justification,  this  may
exclude  rivals  of  the  dominant  access  provider  from
offering 
inde(cid:220)
pendently.  This  requirement  could  thus  constitute
an  abuse  under  Article  86.

those  elements  of 

the  package 

The  Court  has  further  held  that  ".(cid:216).(cid:216).  even  where
tied  sales  of  two  products  are  in  accordance  with
commercial  usage  or  there  is  a  natural  link  between
the  two  products  in  question,  such  sales  may  still
constitute  abuse  within  the  meaning  of  Article  86
unless  they  are  objectively  justified  .(cid:216).(cid:216).’(cid:216)((cid:212)(cid:209)).

P r i c i n g

104.(cid:217)In  determining  whether  there  is  a  pricing  problem
under  the  competition  rules,  it  will  be  necessary  to
demonstrate  that  costs  and  revenues  are  allocated
in  an  appropriate  way.  Improper  allocation  of  costs
and  interference  with  transfer  pricing  could  be  used
as  mechanisms 
for  disguising  excessive  pricing,
predatory  pricing  or  a  price  squeeze.

Excessive  Pricing

105.(cid:217)Pricing  problems 

in  connection  with  access  for
service  providers  to  a  dominant  operator’s  facilities
will  often 
high
prices(cid:216)((cid:212)(cid:210)):  In  the  absence  of  another  viable  alter(cid:220)
native  to  the  facility  to  which  access  is  being  sought

excessively 

around 

revolve 

C  265/18

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22.8.98

by  service  providers,  the  dominant  or  monopolistic
operator  may  be  inclined  to  charge  excessive  prices.

Predatory  pricing

106.(cid:217)An  excessive  price  has  been  defined  by  the  Court  of
Justice  as  being 
the
"excessive 
economic  value  of  the  service  provided’(cid:216)((cid:212)(cid:211)).  In
addition  the  Court  has  made  it  clear  that  one  of  the
ways  this  could  be  calculated  is  as  follows:

in  relation 

to 

"This  excess  could, 
inter  alia,  be  determined
objectively  if  it  were  possible  for  it  to  be  calculated
by  making  a  comparison  between  the  selling  price
its  cost  of
of 
production’(cid:216)((cid:212)(cid:212)).

in  question  and 

the  product 

is 

therefore 

107.(cid:217)It  is  necessary  for  the  Commission  to  determine
what  the  actual  costs  for  the  relevant  product  are.
Appropriate  cost  allocation 
funda(cid:220)
mental  to  determining  whether  a  price  is  excessive.
For  example,  where  a  company  is  engaged  in  a
number  of  activities,  it  will  be  necessary  to  allocate
relevant  costs  to  the  various  activities,  together  with
an  appropriate  contribution  towards  common  costs.
It  may  also  be  appropriate  for  the  Commission  to
determine  the  proper  cost  allocation  methodology
where  this  is  a  subject  of  dispute.

108.(cid:217)The  Court  has  also  indicated  that  in  determining
what  constitutes  an  excessive  price,  account  may  be
taken  of  Community  legislation  setting  out  pricing
principles  for  the  particular  sector(cid:216)((cid:212)(cid:213)).

that 

the  Court  has  held 

109.(cid:217)Further,  comparison  with  other  geographic  areas
can  also  be  used  as  an  indicator  of  an  excessive
price: 
if  possible  a
comparison  could  be  made  between  the  prices
those
charged  by  a  dominant  company,  and 
charged 
to
on  markets  which 
competition(cid:216)((cid:212)(cid:214)).  Such  a  comparison  could  provide  a
the  prices
basis 
charged  by  the  dominant  company  were  fair(cid:216)((cid:213)˝).  In
certain  circumstances,  where  comparative  data  are
not  available,  regulatory  authorities  have  sought  to
determine  what  would  have  been  the  competitive
price  were  a  competitive  market  to  exist(cid:216)((cid:213)˛).  In  an
appropriate  case,  such  an  analysis  may  be  taken
into  account  by  the  Commission  in  its  determi(cid:220)
nation  of  an  excessive  price.

for  assessing  whether  or  not 

open 

are 

110.(cid:217)Predatory  pricing  occurs, 

inter  alia,  where  a
dominant  firm  sells  a  good  or  service  below  cost  for
a  sustained  period  of  time,  with  the  intention  of
deterring  entry,  or  putting  a  rival  out  of  business,
enabling  the  dominant  firm  to  further  increase  its
market  power  and  later  its  accumulated  profits.
Such  unfairly  low  prices  are  in  breach  of  Article
86(a).  Such  a  problem  could,  for  example,  arise  in
the  context  of  competition  between  different  tele(cid:220)
communications  infrastructure  networks,  where  a
dominant  operator  may  tend  to  charge  unfairly  low
prices  for  access  in  order  to  eliminate  competition
from  other  (emerging)  infrastructure  providers.  In
general  a  price  is  abusive  if  it  is  below  the  dominant
company’s  average  variable  costs  or  if  it  is  below
average  total  costs  and  part  of  an  anti(cid:220)competitive
plan(cid:216)((cid:213)ˇ).  In  network  industries  a  simple  application
of  the  above  rule  would  not  reflect  the  economic
reality  of  network  industries.

111.(cid:217)This  rule  was  established  in  the  AKZO  case  where
the  Court  of  Justice  defined  average  variable  costs
as  "those  which  vary  depending  on  the  quantities
produced’(cid:216)((cid:213)—)  and  explained  the  reasoning  behind
the  rule  as  follows:

interest 

"A  dominant  undertaking  has  no 
in
applying  such  prices  except  that  of  eliminating
competitors  so  as  to  enable  it  subsequently  to  raise
its  prices  by  taking  advantage  of  its  monopolistic
position,  since  each  sale  generates  a  loss,  namely
the  total  amount  of  the  fixed  costs  (that  is  to  say,
those  which  remain  constant  regardless  of  the
quantities  produced)  and,  at 
least,  part  of  the
variable  costs  relating  to  the  unit  produced.’

its 

total  additional  costs 

112.(cid:217)In  order  to  trade  a  service  or  group  of  services
profitably,  an  operator  must  adopt  a  pricing
in
strategy  whereby 
providing  that  service  or  group  of  services  are
covered  by  the  additional  revenues  earned  as  a
result  of  the  provision  of  that  service  or  group  of
services.  Where  a  dominant  operator  sets  a  price
for  a  particular  product  or  service  which  is  below
its  average  total  costs  of  providing  that  service,  the
operator  should  justify  this  price 
in  commercial
terms:  a  dominant  operator  which  would  benefit

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from  such  a  pricing  policy  only  if  one  or  more  of
its  competitors  was  weakened  would  be  committing
an  abuse.

113.(cid:217)As  indicated  by  the  Court  of  Justice  in  AKZO,  the
Commission  must  determine  the  price  below  which
a  company  could  only  make  a  profit  by  weakening
or  eliminating  one  or  more  competitors.  Cost
structures  in  network  industries  tend  to  be  quite
different  to  most  other  industries  since  the  former
have  much  larger  common  and  joint  costs.

114.(cid:217)For  example,  in  the  case  of  the  provision  of  tele(cid:220)
communications  services,  a  price  which  equates  to
the  variable  cost  of  a  service  may  be  substantially
lower  than  the  price  the  operator  needs  in  order  to
cover  the  cost  of  providing  the  service.  To  apply
the  AKZO  test  to  prices  which  are  to  be  applied
over  time  by  an  operator,  and  which  will  form  the
basis  of  that  operator’s  decisions  to  invest,  the  costs
considered  should  include  the  total  costs  which  are
incremental  to  the  provision  of  the  service.  In
analysing  the  situation,  consideration  will  have  to
be  given  to  the  appropriate  time  frame  over  which
costs  should  be  analysed.  In  most  cases,  there  is
reason  to  believe  that  neither  the  very  short  nor
very  long  run  are  appropriate.

115.(cid:217)In  these  circumstances,  the  Commission  will  often
need  to  examine  the  average  incremental  costs  of
providing  a  service,  and  may  need  to  examine
average  incremental  costs  over  a  longer  period  than
one  year.

in 
this 

operations,  or  has  otherwise  improperly  determined
the  transfer  prices  within  the  organisation.  The
on  Accounting
Commission  Recommendation 
Separation 
Interconnection
the  context  of 
issue  by  recommending  separate
addresses 
accounting  for  different  business  areas  within  a
vertically 
integrated  dominant  operator.  The
Commission  may,  in  an  appropriate  case,  require
audited
the  dominant 
separated  accounts  dealing  with  all  necessary
aspects  of 
the  dominant  company’s  business.
However,  the  existence  of  separated  accounts  does
not  guarantee  that  no  abuse  exists:  the  Commission
will,  where  appropriate,  examine  the  facts  on  a
case(cid:220)by(cid:220)case  basis.

to  produce 

company 

(including 

118.(cid:217)In  appropriate  circumstances,  a  price  squeeze  could
also  be  demonstrated  by  showing  that  the  margin
between  the  price  charged  to  competitors  on  the
downstream  market 
the  dominant
company’s  own  downstream  operations,  if  any)  for
access  and  the  price  which  the  network  operator
charges  in  the  downstream  market  is  insufficient  to
allow  a  reasonably  efficient  service  provider 
in
the  downstream  market 
to  obtain  a  normal
profit  (unless  the  dominant  company  can  show
that 
is  exceptionally
efficient)(cid:216)((cid:213)(cid:209)).

its  downstream  operation 

119.(cid:217)If  either  of 

these 

to  arise,
competitors  on  the  downstream  market  would  be
faced  with  a  price  squeeze  which  could  force  them
out  of  the  market.

scenarios  were 

116.(cid:217)If  a  case  arises,  the  ONP  rules  and  Commission
recommendations  concerning  accounting  require(cid:220)
ments  and  transparency  will  help  to  ensure  the
effective  application  of  Article  86  in  this  context.

D i s c r i m i n a t i o n

Price  Squeeze

117.(cid:217)Where  the  operator  is  dominant  in  the  product  or
services  market,  a  price  squeeze  could  constitute  an
abuse.  A  price  squeeze  could  be  demonstrated  by
showing  that  the  dominant  company’s  own  down(cid:220)
stream  operations  could  not  trade  profitably  on  the
basis  of 
its
competitors  by  the  upstream  operating  arm  of  the
loss(cid:220)making  downstream
dominant  company.  A 
arm  could  be  hidden  if  the  dominant  operator  has
allocated  costs  to  its  access  operations  which  should
downstream
properly 

the  upstream  price  charged 

allocated 

the 

be 

to 

to 

120.(cid:217)A  dominant  access  provider  may  not  discriminate
between  the  parties  to  different  access  agreements
where  such  discrimination  would  restrict  compe(cid:220)
tition.  Any  differentiation  based  on  the  use  which  is
to  be  made  of  the  access  rather  than  differences
between  the  transactions  for  the  access  provider
itself,  if  the  discrimination  is  sufficiently  likely  to
restrict  or  distort  actual  or  potential  competition,
would  be  contrary  to  Article  86.  This  discrimination
could 
imposing  different
form  of 
conditions, 
the  charging  of  different
prices,  or  otherwise  differentiating  between  access
agreements,  except  where 
such  discrimination
would  be  objectively  justified,  for  example  on  the
basis  of  cost  or  technical  considerations  or  the  fact
that  the  users  are  operating  at  different  levels.  Such
restrict
be 
discrimination 

the 
including 

could 

likely 

take 

to 

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22.8.98

competition  in  the  downstream  market  on  which
the  company  requesting  access  was  seeking  to
operate,  in  that  it  might  limit  the  possibility  for  that
operator 
its
to  enter 
operations  on  that  market(cid:216)((cid:213)(cid:210)).

the  market  or  expand 

121.(cid:217)Such  discrimination  could  similarly  have  an  effect
an  competition  where 
the  discrimination  was
between  operators  on  closely  related  downstream
markets.  Where  two  distinct  downstream  product
markets  exist,  but  one  product  would  be  regarded
as  substitutable  for  another  save  for  the  fact  that
there  was  a  price  difference  between  the  two
products,  discriminating  in  the  price  charged  to  the
providers  of  these  two  products  could  decrease
existing  or  potential  competition.  For  example,
although  fixed  and  mobile  voice  telephony  services
at  present  probably  constitute  separate  product
markets, 
to  converge.
Charging  higher  interconnection  prices  to  mobile
operators  as  compared  to  fixed  operators  would
tend 
this  convergence,  and  would
therefore  have  an  effect  on  competition.  Similar
effects  on  competition  are  likely  in  other  telecom(cid:220)
munications  markets.

the  markets  are 

to  hamper 

likely 

Such  discrimination  would  in  any  event  be  difficult
to  justify  given  the  obligation  to  set  cost(cid:220)related
prices.

122.(cid:217)With  regard  to  price  discrimination,  Article  86(c)
prohibits  unfair  discrimination  by  a  dominant  firm
between  customers  of 
including
discriminating  between  customers  on  the  basis  of
whether  or  not  they  agree  to  deal  exclusively  with
that  dominant  firm.

firm(cid:216)((cid:213)(cid:211)) 

that 

123.(cid:217)Article  7  of  the  Interconnection  Directive  provides
that 
"different  tariffs,  terms  and  conditions  for
interconnection  may  be  set  for  different  categories
of  organisations  which  are  authorised  to  provide
networks  and  services,  where  such  differences  can
be  objectively  justified  on  the  basis  of  the  type  of
interconnection  provided  and/or 
relevant
.(cid:216).(cid:216).’  (provided  that
national 
such  differences  do  not  result 
in  distortions  of
competition).

licensing  conditions 

the 

124.(cid:217)A  determination  of  whether  such  differences  result
in  distortions  of  competition  must  be  made  in  the

particular  case.  It  is  important  to  remember  that
Articles  85  and  86  deal  with  competition  and  not
regulatory  matters.  Article  86  cannot  require  a
dominant  company  to  treat  different  categories  of
customers  differently,  except  where  this  is  the  result
of  market  conditions  and  the  principles  of  Article
86.  On  the  contrary,  Article  86  prohibits  dominant
companies 
similar
transactions  where  such  a  discrimination  would
have  an  effect  on  competition.

from  discriminating  between 

125.(cid:217)Discrimination  without  objective 

on 

justification  as
regards  any  aspects  or  conditions  of  an  access
agreement  may  constitute  an  abuse.  Discrimination
may  relate  to  elements  such  as  pricing,  delays,
technical  access,  routing(cid:216)((cid:213)(cid:212)),  numbering,  restric(cid:220)
tions 
essential
use 
requirements  and  use  of  customer  network  data.
However,  the  existence  of  discrimination  can  only
be  determined  on  a  case(cid:220)by(cid:220)case  basis.  Discrimi(cid:220)
nation  is  contrary  to  Article  86  whether  or  not  it
results  from  or  is  apparent  from  the  terms  of  a
particular  access  agreement.

exceeding 

network 

126.(cid:217)There  is,  in  this  context,  a  general  duty  on  the
network  operator  to  treat  independent  customers  in
the  same  way  as  its  own  subsidiary  or  downstream
service  arm.  The  nature  of  the  customer  and  its
demands  may  play  a  significant  role  in  determining
transactions  are  comparable.  Different
whether 
prices  for  customers  at  different  levels  (for  example,
wholesale  and  retail)  do  not  necessarily  constitute
discrimination.

127.(cid:217)Discrimination  issues  may  arise  in  respect  of  the
technical  configuration  of  the  access,  given 
its
importance  in  the  context  of  access.

The  degree  of  technical  sophistication  of  the  access:
restrictions  on  the  type  or  "level’  in  the  network
hierarchy  of  exchange  involved  in  the  access  or  the
technical  capabilities  of  this  exchange  are  of  direct
competitive 
the
facilities  available  to  support  a  connection  or  the
interface  and  signalling  system  used  to
type  of 
determine  the  type  of  service  available  to  the  party
requesting  access  (for  example,  intelligent  network
facilities).

significance.  These  could  be 

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The  number  and/or  location  of  connection  points:  the
requirement  to  collect  and  distribute  traffic  for
particular  areas  at  the  switch  which  directly  serves
that  area  rather  than  at  a  higher 
level  of  the
network  hierarchy  may  be  important.  The  party
requesting  access 
incurs  additional  expense  by
either  providing  links  at  a  greater  distance  from  its
own  switching  centre  or  being  liable  to  pay  higher
conveyance  charges.

Equal  access:  the  possibility  for  customers  of  the
the  services
party  requesting  access 
provided  by  the  access  provider  using  the  same
number  of  dialled  digits  as  are  used  by 
the
customers  of  the 
is  a  crucial  feature  of
latter 
competitive  telecommunications.

to  obtain 

Objective  justification

128.(cid:217)Justifications  could  include  factors  relating  to  the
actual  operation  of  the  network  owned  by  the
access  provider,  or  licensing  restrictions  consistent
with,  for  example,  the  subject  matter  of  intellectual
property  rights.

2.3. Abuses  of  joint  dominant  positions

129.(cid:217)In  the  case  of  joint  dominance  (see  points  76  et
seq.)  behaviour  by  one  of  several  jointly  dominant
companies  may  be  abusive  even  if  others  are  not
behaving  in  the  same  way.

In  addition,  where  one  party 

effects:  restriction  of  competition  between  the  two
parties  to  the  access  agreement,  or  restriction  of
competition  from  third  parties,  for  example  through
exclusivity  for  one  or  both  of  the  parties  to  the
is
agreement. 
dominant,  conditions  of  the  access  agreement  may
lead  to  a  strengthening  of  that  dominant  position,
or  to  an  extension  of  that  dominant  position  to  a
related  market,  or  may  constitute  an  unlawful
exploitation  of  the  dominant  position  through  the
imposition  of  unfair  terms.

132.(cid:217)Access  agreements  where  access 

is 

in  principle
unlimited  are  not 
to  be  restrictive  of
likely 
competition  within  the  meaning  of  Article  85(1).
Exclusivity  obligations  in  contracts  providing  access
to  one  company  are  likely  to  restrict  competition
because  they  limit  access  to  infrastructure  for  other
companies.  Since  most  networks  have  more
capacity  than  any  single  user  is  likely  to  need,  this
will  normally  be  the  case  in  the  telecommunications
sector.

133.(cid:217)Access 

can 

have 

agreements 

significant
pro(cid:220)competitive  effects  as  they  can  improve  access
to  the  downstream  market.  Access  agreements  in
the  context  of  interconnection  are  essential  to  inter(cid:220)
operability  of 
thus
increasing  competition  in  the  downstream  market
for  services,  which  is  likely  to  involve  higher  added
value  than  local  infrastructure.

infrastructure, 

services  and 

134.(cid:217)There 

is,  however,  obvious  potential  for  anti(cid:220)
competitive  effects  of  certain  access  agreements  or
clauses 
for
example:

therein.  Access  agreements  may, 

130.(cid:217)In  addition  to  remedies  under  the  competition
rules,  if  no  operator  was  willing  to  grant  access,
and  if  there  was  no  technical  or  commercial  justifi(cid:220)
cation  for  the  refusal,  one  would  expect  that  the
NRA  would  resolve  the  problem  by  ordering  one
or  more  of  the  companies  to  offer  access,  under  the
terms  of  the  relevant  ONP  Directive  or  under
national  law.

(a)(cid:217)serve  as  a  means  of  coordinating  prices;

(b) serve  as  a  means  of  market  sharing;

(c) have  exclusionary  effects  on  third  parties(cid:216)((cid:213)(cid:213));

3. Access  agreements  (Article  85)

(d) lead  to  an  exchange  of  commercially  sensitive

information  between  the  parties.

131.(cid:217)Restrictions  of  competition  included  in  or  resulting
from  access  agreements  may  have  two  distinct

135.(cid:217)The  risk  of  price  coordination  is  particularly  acute
intercon(cid:220)

in  the  telecommunications  sector  since 

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nection  charges  often  amount  to  50(cid:216)%  or  more  of
the  total  cost  of  the  services  provided,  and  where
interconnection  with  a  dominant  operator  will
usually  be  necessary.  In  these  circumstances,  the
scope  for  price  competition  is  limited  and  the  risk
(and  the  seriousness)  of  price  coordination  corre(cid:220)
spondingly  greater.

agreements,  and  to  ensure  that  the  information  is
not  used  for  anti(cid:220)competitive  purposes.  Provided
that  these  safeguards  are  complete  and  function
correctly,  there  should  be  no  reason  in  principle
why  simple  interconnection  agreements  should  be
caught  by  Article  85(1).

136.(cid:217)Furthermore, 

interconnection  agreements  between
network  operators  may  under  certain  circumstances
be  an  instrument  of  market  sharing  between  the
network  operator  providing  access  and  the  network
operator  seeking  access,  instead  of  the  emergence
of  network  competition  between  them.

137.(cid:217)In  a 

liberalised  telecommunications  environment,
the  above  types  of  restrictions  of  competition  will
be  monitored  by  the  national  authorities  and  the
Commission  under  the  competition  rules.  The  right
of  parties  who  suffer  from  any  type  of  anti(cid:220)
competitive 
the
Commission  is  unaffected  by  national  regulation.

behaviour 

complain 

to 

to 

Clauses  falling  within  Article  85(1)

138.(cid:217)The  Commission  has 

identified  certain  types  of
restriction  which  would  potentially  infringe  Article
85(1)  of  the  Treaty  and  therefore  require  individual
exemption.  These  clauses  will  most  commonly
relate  to  the  commercial  framework  of  the  access.

139.(cid:217)In  the  telecommunications  sector,  it  is  inherent  in
that  parties  will  obtain  certain
interconnection 
customer  and 
their
information  about 
traffic 
competitors.  This  information  exchange  could  in
certain  cases  influence  the  competitive  behaviour  of
the  undertakings  concerned,  and  could  easily  be
used  by  the  parties  for  collusive  practices,  such  as
market  sharing(cid:216)((cid:213)(cid:214)).  The  Interconnection  Directive
requires  that  information  received  from  an  organi(cid:220)
sation  seeking  interconnection  be  used  only  for  the
purposes  for  which  it  was  supplied.  In  order  to
comply  with  the  competition  rules  and  the  Inter(cid:220)
to
connection  Directives,  operators  will  have 
introduce  safeguards  to  ensure  that  confidential
information  is  only  disclosed  to  those  parts  of  the
companies  involved  in  making  the  interconnection

140.(cid:217)Exclusivity  arrangements,  for  example  where  traffic
would  be  conveyed  exclusively  through  the  tele(cid:220)
communications  network  of  one  or  both  parties
rather  than  to  the  network  of  other  parties  with
whom  access  agreements  have  been  concluded  will
similarly  require  analysis  under  Article  85(3).  If  no
justification 
is  provided  for  such  routing,  such
clauses  will  be  prohibited.  Such  exclusivity  clauses
are  not,  however,  an  inherent  part  of  intercon(cid:220)
nection  agreements.

141.(cid:217)Access  agreements  that  have  been  concluded  with
an  anti(cid:220)competitive  object  are  extremely  unlikely  to
fulfil  the  criteria  for  an  individual  exemption  under
Article  85(3).

thus 

scope 

limited 

leaving 

142.(cid:217)Furthermore,  access  agreements  may  have  an
impact  on  the  competitive  structure  of  the  market.
Local  access  charges  will  often  account  for  a
considerable  portion  of  the  total  cost  of  the  services
provided  to  end(cid:220)users  by  the  party  requesting
access, 
for  price
competition.  Because  of  the  need  to  safeguard  this
limited  degree  of  competition,  the  Commission  will
therefore  pay  particular  attention  to  scrutinising
access  agreements  in  the  context  of  their  likely
effects  on  the  relevant  markets  in  order  to  ensure
that  such  agreements  do  not  serve  as  a  hidden  and
indirect  means  for  fixing  or  coordinating  end(cid:220)prices
for  end(cid:220)users,  which  constitutes  one  of  the  most
serious 
the
Treaty(cid:216)((cid:214)˝).  This  would  be  of  particular  concern  in
oligopolistic  markets.

infringements  of  Article  85  of 

143.(cid:217)In  addition,  clauses  involving  discrimination  leading
to  the  exclusion  of  third  parties  are  similarly
restrictive  of  competition.  The  most  important  is
discrimination  with  regard  to  price,  quality  or  other
commercially  significant  aspects  of  the  access  to  the
detriment  of  the  party  requesting  access,  which  will
generally  aim  at  unfairly  favouring  the  operations
of  the  access  provider.

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4. Effect  on  trade  between  Member  States

144.(cid:217)The  application  of  both  Article  85  and  Article  86
presupposes  an  effect  on  trade  between  Member
States.

145.(cid:217)In  order  for  an  agreement  to  have  an  effect  on
trade  between  Member  States,  it  must  be  possible
for  the  Commission  to  "foresee  with  a  sufficient
degree  of  probability  on  the  basis  of  a  set  of
fact 
the
objective 
that 
agreement 
influence,
in  question  may  have  an 
direct  or  indirect,  actual  or  potential,  on  the  pattern
of  trade  between  Member  States’(cid:216)((cid:214)˛).

law  or  of 

factors  of 

throughout  the  Community  and  access  agreements
may  govern  the  ability  of  a  service  provider  or  an
operator  to  provide  any  given  service.  Even  where
markets  are  mainly  national,  as  is  generally  the  case
the  stage  of  development  of
at  present  given 
liberalisation,  abuses  of  dominance  will  normally
speaking  affect  market  structure,  leading  to  reper(cid:220)
cussions  on  trade  between  Member  States.

148.(cid:217)Cases  in  this  area  involving  issues  under  Article  86
are  likely  to  relate  either  to  abusive  clauses  in
access  agreements,  or  a  refusal  to  conclude  an
access  agreement  on  appropriate  terms  or  at  all.  As
such, 
listed  above  for  determining
whether  an  access  agreement  is  capable  of  affecting
trade  between  Member  States  would  be  equally
relevant  here.

the  criteria 

It  is  not  necessary  for  each  of  the  restrictions  of
competition  within  the  agreement  to  be  capable  of
affecting  trade(cid:216)((cid:214)ˇ),  provided  the  agreement  as  a
whole  does  so.

CONCLUSIONS

146.(cid:217)As  regards  access  agreements  in  the  telecommuni(cid:220)
cations  sector,  the  Commission  will  consider  not
only  the  direct  effect  of  restrictions  of  competition
on  inter(cid:220)state  trade  in  access  markets,  but  also  the
effects  on  inter(cid:220)State  trade  in  downstream  telecom(cid:220)
munications  services.  The  Commission  will  also
consider 
to
foreclose  a  given  geographic  market  which  could
prevent  undertakings  already  established  in  other
Member  States  from  competing  in  this  geographic
market.

these  agreements 

the  potential  of 

147.(cid:217)Telecommunications 

agreements  will
access 
normally  affect  trade  between  Member  States  as
traded
services  provided  over  a  network  are 

149.(cid:217)The  Commission  considers  that  competition  rules
and  sector  specific  regulation  form  a  coherent  set
of  measures  to  ensure  a  liberalised  and  competitive
telecommunications
market 
markets  in  the  Community.

environment 

for 

150.(cid:217)In  taking  action  in  this  sector,  the  Commission  will
aim  to  avoid  unnecessary  duplication  of  procedures,
in  particular  competition  procedures  and  national/
Community  regulatory  procedures  as  set  out  under
the  ONP  framework.

151.(cid:217)Where 

competition 

the
rules 
Commission  will  consider  which  markets  are
relevant  and  will  apply  Articles  85  and  86 
in
accordance  with  the  principles  set  out  above.

invoked, 

are 

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(˛) According  to  Commission  Directives  96/19/EC  and  96/2/EC  (cited  in  footnote  3),  certain  Member  States  may  request  a  dero(cid:220)
gation  from  full  liberalisation  for  certain  limited  periods.  This  notice  is  without  prejudice  to  such  derogations,  and  the  Commission
will  take  account  of  the  existence  of  any  such  derogation  when  applying  the  competition  rules  to  access  agreements,  as  described  in
this  notice.
See:
Commission  Decision  97/114/EC  of  27  November  1996  concerning  the  additional  implementation  periods  requested  by  Ireland  for
the  implementation  of  Commission  Directives  90/388/EEC  and  96/2/EC  as  regards  full  competition  in  the  telecommunications
markets  (OJ  L  41,  12.2.1997,  p.  8);
Commission  Decision  97/310/EC  of  12  February  1997  concerning  the  granting  of  additional  implementation  periods  to  the
Portuguese  Republic  for  the  implementation  of  Commission  Directives  90/388/EEC  and  96/2/EC  as  regards  full  competition  in
the  telecommunications  markets  (OJ  L  133,  24.5.1997,  p.  19);
Commission  Decision  97/568/EC  of  14  May  1997  on  the  granting  of  additional  implementation  periods  to  Luxembourg  for  the
implementation  of  Directive  90/388/EEC  as  regards  full  competition  in  the  telecommunications  markets  (OJ  L  234,  26.8.1997,
p.  7);
Commission  Decision  97/603/EC  of  10  June  1997  concerning  the  granting  of  additional  implementation  periods  to  Spain  for  the
implementation  of  Commission  Directive  90/388/EEC  as  regards  full  competition  in  the  telecommunications  markets  (OJ  L  243,
5.9.1997,  p.  48).
Commission  Decision  97/607/EC  of  18  June  1997  concerning  the  granting  of  additional  implementation  periods  to  Greece  for  the
implementation  of  Directive  90/388/EEC  as  regards  full  competition  in  the  telecommunications  markets  (OJ  L  245,  9.9.1997,  p.  6).

(ˇ) Communication  by  the  Commission  of  3  May  1995  to  the  European  Parliament  and  the  Council,  Consultation  on  the  Green  Paper

on  the  liberalisation  of  telecommunications  infrastructure  and  cable  television  networks,  COM(95)  158  final.

(—) Commission  Directive  88/301/EEC  of  16  May  1988,  on  competition  in  the  markets  in  telecommunications  terminal  equipment  (OJ

L  131,  27.5.1988,  p.  73);
Commission  Directive  90/388/EEC  of  28  June  1990  on  competition  in  the  markets  for  telecommunications  services  (OJ  L  192,
24.7.1990,  p.  10)  (the  "Services  Directive’);
Commission  Directive  94/46/EC  of  13  October  1994,  amending  Directive  88/301/EEC  and  Directive  90/388/EEC  in  particular
with  regard  to  satellite  communications  (OJ  L  268,  19.10.1994,  p.  15);
Commission  Directive  95/51/EC  of  18  October  1995  amending  Directive  90/388/EEC  with  regard  to  the  abolition  of  the
restrictions  on  the  use  of  cable  television  networks  for  the  provision  of  already  liberalised  telecommunications  services  (OJ  L  256,
26.10.1995,  p.  49);
Commission  Directive  96/2/EC  of  16  January  1996  amending  Directive  90/388/EEC  with  regard  to  mobile  and  personal
communications  (OJ  L  20,  26.1.1996,  p.  59);
Commission  Directive  96/19/EC  of  13  March  1996  amending  Directive  90/388/EEC  with  regard  to  the  implementation  of  full
competition  in  the  telecommunications  markets  (OJ  L  74,  22.3.1996,  p.  13)  (the  "Full  Competition  Directive’).

((cid:209)) Interconnection  agreements  are  the  most  significant  form  of  access  agreement  in  the  telecommunications  sector.  A  basic  framework
for  interconnection  agreements  is  set  up  by  the  rules  on  open  network  provision  (ONP),  and  the  application  of  competition  rules
must  be  seen  against  this  background:
Directive  97/13/EC  of  the  European  Parliament  and  of  the  Council  of  10  April  1997  on  a  common  framework  for  authorisations
and  individual  licences  in  the  field  of  telecommunications  services  (OJ  L  117,  7.5.1997,  p.  15)  (the  "Licensing  Directive’);
Directive  97/33/EC  of  the  European  Parliament  and  of  the  Council  of  30  June  1997  on  interconnection  in  Telecommunications
with  regard  to  ensuring  universal  service  and  interoperability  through  application  of  the  principles  of  open  network  provision
(ONP)  (OJ  L  199,  26.7.1997,  p.  32)  (the  "Interconnection  Directive’);
Council  Directive  90/387/EEC  of  28  June  1990  on  the  establishment  of  the  internal  market  for  telecommunications  services
through  the  implementation  of  open  network  provision  (OJ  L  192,  24.7.1990,  p.  1)  (the  "Framework  Directive’);
Council  Directive  92/44/EEC  of  5  June  1992  on  the  application  of  open  network  provision  to  leased  lines  (OJ  L  165,  19.6.1992,
p.  27)  (the  "Leased  Lines  Directive’);
Directive  95/62/EEC  of  the  European  Parliament  and  of  the  Council  of  13  December  1995  on  the  application  of  open  network
provision  to  voice  telephony  (OJ  L  321,  30.12.1995,  p.  6)  replaced  by  Directive  98/10/EC  of  the  European  Parliament  and  of  the
Council  of  26  February  1998  on  the  application  of  open  network  provision  (ONP)  to  voice  telephony  and  on  universal  service  for
telecommunications  in  a  competitive  environment  (OJ  L  101,  1.4.1998,  p.  24)  (the  "Voice  Telephony  Directive’);
Directive  97/66/EC  of  the  European  Parliament  and  of  the  Council  of  15  December  1997  concerning  the  processing  of  personal
data  and  the  protection  of  privacy  in  the  telecommunications  sector  (OJ  L  24,  30.1.1998,  p.  1)  (the  "Data  Protection  Directive’).

((cid:210)) OJ  C  233,  6.9.1991,  p.  2.

((cid:211)) In  the  telecommunications  area,  notably:

Commission  Decision  91/562/EEC  of  18  October  1991,  Eirpage  (OJ  L  306,  7.11.1991,  p.  22);
Commission  Decisions  96/546/EC  and  96/547/EC  of  17  July  1996,  Atlas  and  Phoenix  (OJ  L  239,  19.9.1996,  p.  23  and  p.  57);  and
Commission  Decision  97/780/EC  of  29  October  1997,  Unisource  (OJ  L  318,  20.11.1997,  p.  1).
There  are  also  a  number  of  pending  cases  involving  access  issues.

((cid:212)) Competition  aspects  of  interconnection  agreements  in  the  telecommunications  sector,  June  1995;

Competition  aspects  of  access  by  service  providers  to  the  resources  of  telecommunications  operators,  December  1995.  See  also
Competition  Aspects  of  Access  Pricing,  December  1995.

((cid:213)) See  the  Commission’s  Green  Paper  of  3  December  1997  on  the  Convergence  of  the  Telecommunications,  Media  and  Information

Technology  sectors  and  the  implications  for  Regulation  -  Towards  an  information  society  approach  (COM(97)  623).

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((cid:214)) See  Council  Decision  97/838/EC  of  28  November  1997  concerning  the  conclusion  on  behalf  of  the  European  Community,  as
regards  matters  within  its  competence,  of  the  results  of  the  WTO  negotiations  on  basic  telecommunications  services  (OJ  L  347,
18.12.1997,  p.  45).

(˛˝)(cid:217)In  the  case  of  the  ONP  Leased  Lines  Directive,  a  first  stage  is  foreseen  which  allows  the  aggrieved  user  to  appeal  to  the  National
Regulatory  Authority.  This  can  offer  a  number  of  advantages.  In  the  telecommunications  areas  where  experience  has  shown  that
companies  are  often  hesitant  to  be  seen  as  complainants  against  the  TO  on  which  they  heavily  depend  not  only  with  respect  to  the
specific  point  of  conflict  but  also  much  broader  and  far(cid:220)reaching  sense,  the  procedures  foreseen  under  ONP  are  an  attractive
option.  ONP  procedures  furthermore  can  cover  a  broader  range  of  access  problems  than  could  be  approached  on  the  basis  of  the
competition  rules.  Finally,  these  procedures  can  offer  users  the  advantage  of  proximity  and  familiarity  with  national  administrative
procedures;  language  is  also  a  factor  to  be  taken  into  account.
Under  the  ONP  Leased  Lines  Directive,  if  a  solution  cannot  be  found  at  the  national  level,  a  second  stage  is  organised  at  the
European  level  (conciliation  procedure).  An  agreement  between  the  parties  involved  must  then  be  reached  within  two  months,  with
a  possible  extension  of  one  month  if  the  parties  agree.

(˛˛)(cid:217)An  NRA  is  a  national  telecommunications  regulatory  body  created  by  a  Member  State  in  the  context  of  the  services  directive  as
amended,  and  the  ONP  framework.  The  list  of  NRAs  is  published  regularly  in  the  Official  Journal  of  the  European  Communities,
and  a  copy  of  the  latest  list  can  be  found  at  http://www.ispo.cec.be.

(˛ˇ)(cid:217)Articles  9  and  17  of  the  Interconnection  Directive.

(˛—)(cid:217)Article  7  of  the  Services  Directive  (see  footnote  3),  and  Article  5a  of  the  ONP  Framework  Directive  (see  footnote  4).  See  also
Communication  by  the  Commission  to  the  European  Parliament  and  the  Council  on  the  status  and  implementation  of  Directive
90/388/EEC  on  competition  in  the  markets  for  telecommunications  services  (OJ  C  275,  20.10.1995,  p.  2).
See  also  the  judgment  of  the  Court  of  Justice  of  the  European  Communities  in  Case  C(cid:220)91/94,  Thierry  Tranchant  and  Telephones
Stores  [1995(cid:129)  ECR  I(cid:220)3911.

(˛(cid:209))(cid:217)The  Interconnection  Directive  cited  in  footnote  4,  Article  9(3).

(˛(cid:210))(cid:217)Judgments  of  the  Court  of  First  Instance  of  the  European  Communities:  Case  T(cid:220)24/90,  Automec  v.  Commission  [1992(cid:129)  ECR

II(cid:220)2223,  at  paragraph  77  and  Case  T(cid:220)114/92  BEMIM  [1995(cid:129)  ECR  II(cid:220)147.

(˛(cid:211))(cid:217)Notice  on  cooperation  between  national  courts  and  the  Commission  in  applying  Articles  85  and  86  of  the  EC  Treaty  (OJ  C  39,

13.2.1993,  p.  6,  at  paragraph  14).
Notice  on  cooperation  between  national  competition  authorities  and  the  Commission  (OJ  C  313,  15.10.1997,  p.  3).

(˛(cid:212))(cid:217)Case  127/73,  BRT  v.  SABAM  [1974(cid:129)  ECR  51.

(˛(cid:213))(cid:217)Case  66/86,  Ahmed  Saeed  [1989(cid:129)  ECR  838.

(˛(cid:214))(cid:217)They  must  not,  for  example,  encourage  or  reinforce  or  approve  the  results  of  anti(cid:220)competitive  behaviour:

-(cid:217)Ahmed  Saeed,  see  footnote  18;
-(cid:217)Case  153/93,  Federal  Republic  of  Germany  v.  Delta  Schiffahrtsges.  [1994(cid:129)  ECR  I(cid:220)2517,
-(cid:217)Case  267/86,  Van  Eycke  [1988(cid:129)  ECR  4769.

(ˇ˝)(cid:217)Case  13/77,  GB(cid:220)Inno(cid:220)BM/ATAB  [1977(cid:129)  ECR  2115,  at  paragraph  33:

-(cid:217)"while  it  is  true  that  Article  86  is  directed  at  undertakings,  nonetheless  it  is  also  true  that  the  Treaty  imposes  a  duty  on  Member

States  not  to  adopt  or  maintain  in  force  any  measure  which  could  deprive  the  provision  of  its  effectiveness.’

(ˇ˛)(cid:217)For  further  duties  of  national  authorities  see:

Case  103/88,  Fratelli  Costanzo  [1989(cid:129)  ECR  1839.
See  Ahmed  Saeed,  cited  in  footnote  18:
-(cid:217)"Articles  5  and  90  of  the  EEC  Treaty  must  be  interpreted  as  (i)  prohibiting  the  national  authorities  from  encouraging  the
conclusion  of  agreements  on  tariffs  contrary  to  Article  85(1)  or  Article  86  of  the  Treaty,  as  the  case  may  be;  (ii)  precluding  the
approval  by  those  authorities  of  tariffs  resulting  from  such  agreements’.

(ˇˇ)(cid:217)Joined  Cases  C(cid:220)6/90,  and  C(cid:220)9/90  Francovich  [1991(cid:129)  ECR  I(cid:220)5357;

Joined  Cases  C(cid:220)46/93,  Brasserie  de  P(cid:240)cheur  v.  Germany  and  Case  C(cid:220)48/93,  R  v.  Secretary  of  State  for  Transport  ex  parte
Factortame  and  others  [1996(cid:129)  ECR  I(cid:220)1029.

(ˇ—)(cid:217)For  example,  recital  18  of  the  Leased  Lines  Directive  and  Article  9(3)  of  the  ONP  Interconnection  Directive,  see  footnote  4.

(ˇ(cid:209))(cid:217)Council  Regulation  (EEC)  No  4064/89  of  21  December  1989  on  the  control  of  concentrations  between  undertakings  (OJ  L  395,

30.12.1989,  p.  1);  corrected  version  (OJ  L  257,  21.9.1990,  p.  13).

(ˇ(cid:210))(cid:217)Council  Regulation  No  17  of  6  February  1962,  First  Regulation  implementing  Articles  85  and  86  of  the  Treaty  (OJ  13,  21.2.1962,

p.  204).

(ˇ(cid:211))(cid:217)Articles  2  and  4(1)  of  Regulation  No  17.

(ˇ(cid:212))(cid:217)Article  3  of  Regulation  No  17.

(ˇ(cid:213))(cid:217)Articles  3  and  12  of  Regulation  No  17.

(ˇ(cid:214))(cid:217)Case  792/79R,  Camera  Care  v.  Commission  [1980(cid:129)  ECR  119.

See  also  Case  T(cid:220)44/90,  La  Cinq  v.  Commission  [1992(cid:129)  ECR  II(cid:220)1.

(—˝)(cid:217)See  point  16  of  the  Notice  cited  in  footnote  16.

(—˛)(cid:217)Article  2  or  Article  4(1)  of  Regulation  No  17.

(—ˇ)(cid:217)Camera  Care  and  La  Cinq,  referred  to  at  footnote  29.

(——)(cid:217)See  point  16  of  the  Notice  cited  in  footnote  16.

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(—(cid:209))(cid:217)See  point  18.

(—(cid:210))(cid:217)See  Automec,  cited  in  footnote  15,  at  paragraph  86.

(—(cid:211))(cid:217)BRT  v.  SABAM,  cited  in  footnote  17.

(—(cid:212))(cid:217)Article  9(1)  and  (3)  of  the  ONP  Interconnection  Directive.

(—(cid:213))(cid:217)Case  14/83,  Von  Colson  [1984(cid:129)  ECR  1891.

(—(cid:214))(cid:217)Article  15(2)  of  Regulation  No  17.

((cid:209)˝)(cid:217)Article  15(5)  of  Regulation  No  17.

((cid:209)˛)(cid:217)Article  15(6)  of  Regulation  No  17.

((cid:209)ˇ)(cid:217)Article  6(c)  of  the  ONP  Interconnection  Directive.

((cid:209)—) Inter  alia,  at  Article  9  of  the  ONP  Interconnection  Directive.

((cid:209)(cid:209))(cid:217)Guidelines  on  the  method  of  setting  fines  imposed  pursuant  to  Article  15(2)  of  Regulation  No  17  and  Article  65(5)  of  the  ECSC

Treaty  (OJ  C  9,  14.1.1998,  p.  3).

((cid:209)(cid:210))(cid:217)See  footnote  22.

((cid:209)(cid:211))(cid:217)OJ  C  372,  9.12.1997,  p.  5.

((cid:209)(cid:212))(cid:217)Interconnection  is  defined  in  the  Full  Competition  Directive  as  ".(cid:216).(cid:216).  the  physical  and  logical  linking  of  the  telecommunications
facilities  of  organisations  providing  telecommunications  networks  and/or  telecommunications  services,  in  order  to  allow  the  users
of  one  organisation  to  communicate  with  the  users  of  the  same  or  another  organisation  or  to  access  services  provided  by  third
organisations.’
In  the  Full  Competition  Directive  and  ONP  Directives,  telecommunications  services  are  defined  as  "services,  whose  provision
consists  wholly  or  partly  in  the  transmission  and/or  routing  of  signals  on  a  telecommunications  network.’
It  therefore  includes  the  transmission  of  broadcasting  signals  and  CATV  networks.
A  telecommunications  network  is  itself  defined  as  ".(cid:216).(cid:216).  the  transmission  equipment  and,  where  applicable,  switching  equipment  and
other  resources  which  permit  the  conveyance  of  signals  between  defined  termination  points  by  wire,  by  radio,  by  optical  or  by  other
electromagnetic  means’.

((cid:209)(cid:213))(cid:217)Commission  Decision  94/894/EC  of  13  December  1994,  Eurotunnel  (OJ  L  354,  21.12.1994,  p.  66).

((cid:209)(cid:214))(cid:217)See  Guidelines  cited  in  footnote  5,  at  paragraphs  15  and  16.

((cid:210)˝)(cid:217)Commission  Decision  82/896/EEC  of  15  December  1982,  AROW/BNIC  (OJ  L  379,  31.12.1982,  p.  19).

((cid:210)˛)(cid:217)See  footnote  18.

((cid:210)ˇ)(cid:217)Joined  Cases  C(cid:220)48  and  66/90  Netherlands  and  others  v.  Commission,  [1992(cid:129)  ECR  I(cid:220)565.

((cid:210)—)(cid:217)See  Ahmed  Saeed,  cited  in  footnote  18,  where  internal  market  legislation  relating  to  pricing  was  used  as  an  aid  in  determining  what

level  of  prices  should  be  regarded  as  unfair  for  the  purposes  of  Article  86.

((cid:210)(cid:209))(cid:217)On  each  market,  Tetra  Pak  was  faced  with  the  same  potential  customers  and  actual  competitors.  Case  C(cid:220)333/94(cid:216)P,  Tetra  Pak

International  SA  v.  Commission  [1996(cid:129)  ECR  I(cid:220)5951.

((cid:210)(cid:210))(cid:217)See  also  the  definition  included  in  the  "Additional  commitment  on  regulatory  principles  by  the  European  Communities  and  their
Member  States’  used  by  the  Group  on  basic  telecommunications  in  the  context  of  the  World  Trade  Organisation  (WTO)
negotiations:
"Essential  facilities  mean  facilities  of  a  public  telecommunications  transport  network  and  service  that:
(a)(cid:217)are  exclusively  or  predominantly  provided  by  a  single  or  limited  number  of  suppliers;  and
(b) cannot  feasibly  be  economically  or  technically  substituted  in  order  to  provide  a  service.’

((cid:210)(cid:211))(cid:217)Case  6/72  Continental  Can  [1973(cid:129)  ECR  215.

((cid:210)(cid:212))(cid:217)It  should  be  noted  in  this  context  that  under  the  ONP  framework  an  organisation  may  be  notified  as  having  significant  market
power.  The  determination  of  whether  an  organisation  does  or  does  not  have  significant  market  power  depends  on  a  number  of
factors,  but  the  starting  presumption  is  that  an  organisation  with  a  market  share  of  more  than  25(cid:216)%  will  normally  be  considered  to
have  significant  market  power.  The  Commission  will  take  account  of  whether  an  undertaking  has  been  notified  as  having
significant  market  power  under  the  ONP  rules  in  its  appraisal  under  the  competition  rules.  It  is  clear,  however,  that  the  notion  of
significant  market  power  generally  describes  a  position  of  economic  power  on  a  market  less  than  that  of  dominance:  the  fact  that
an  undertaking  has  significant  market  power  under  the  ONP  rules  will  generally  therefore  not  lead  to  a  presumption  of  dominance,
although  in  a  particular  situation,  this  may  prove  to  be  the  case.  One  important  factor  to  be  taken  into  consideration,  however,  will
be  whether  the  market  definition  used  in  the  ONP  procedures  is  appropriate  for  use  in  applying  the  competition  rules.

((cid:210)(cid:213))(cid:217)Case  85/76  Hoffmann(cid:220)La  Roche  [1979(cid:129)  ECR  461.

Commission  Decision  89/113/EEC  of  21  December  1988,  Decca  Navigator  System  (OJ  L  43,  15.2.1989,  p.  27).

((cid:210)(cid:214))(cid:217)Commission  Decision  92/553/EEC  of  22  July  1992,  Nestl~/Perrier  (OJ  L  356,  5.12.1992,  p.  1).

((cid:211)˝)(cid:217)The  most  common  situation.

((cid:211)˛)(cid:217)Joined  Cases  6/73  and  7/73  Commercial  Solvents  v.  Commission  [1974(cid:129)  ECR  223  and  Case  311/84  CBEM  v.  CLT  and  IPB  [1985(cid:129)

ECR  3261.

((cid:211)ˇ)(cid:217)Case  C(cid:220)62/86,  AKZO  v.  Commission  [1991(cid:129)  ECR  I(cid:220)3359  and  Case  T(cid:220)65/89  BPB  Industries  and  British  Gypsum  v.  Commission

[1993(cid:129)  ECR  II(cid:220)389.

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((cid:211)—)(cid:217)Case  C(cid:220)333/94  P,  Tetra  Pak  International  v.  Commission  [1996(cid:129)  ECR  I(cid:220)5951.  In  this  fourth  case,  application  of  Article  86  can

only  be  justified  by  special  circumstances  (Tetra  Pak,  at  paragraphs  29  and  30).

((cid:211)(cid:209))(cid:217)Case  85/76,  Hoffmann(cid:220)La  Roche  [1979(cid:129)  ECR  461.

((cid:211)(cid:210))(cid:217)Commission  Decision  94/19/EC  of  21  December  1993,  Sea  Containers  v.  Stena  Sealink  -  Interim  measure  (OJ  L  15,  18.1.1994,

p.  8).
Commission  Decision  94/119/EEC  of  21  December  1993,  Port  of  R(cid:192)dby  (Denmark)  (OJ  L  55,  26.2.1994,  p.  52).

((cid:211)(cid:211))(cid:217)See  also  (among  others):

Judgments  of  the  Court  of  Justice  and  the  Court  of  First  Instance:
Cases  6  and  7/73  Commercial  Solvents  v.  Commission  [1974(cid:129)  ECR  223;
Case  311/84,  T~l~marketing  [1985(cid:129)  ECR  3261;
Case  C(cid:220)18/88  RTT  v.  GB(cid:220)Inno  [1991(cid:129)  ECR  I(cid:220)5941;
Case  C(cid:220)260/89,  Elliniki  Radiophonia  Teleorassi  [1991(cid:129)  ECR  I(cid:220)2925;
Cases  T(cid:220)69,  T(cid:220)70  and  T(cid:220)76/89,  RTE,  BBC  and  ITP  v.  Commission  [1991(cid:129)  ECR  II(cid:220)485,  535,  575;
Case  C(cid:220)271/90,  Spain  v.  Commission  [1992(cid:129)  ECR  I(cid:220)5833;
Cases  C(cid:220)241  and  242/91  P,  RTE  and  ITP  Ltd  v.  Commission  (Magill),  [1995(cid:129)  ECR  I(cid:220)743.
Commission  Decisions:
Commission  Decision  76/185/ECSC  of  29  October  1975,  National  Carbonising  Company  (OJ  L  35,  10.2.1976,  p.  6).
Commission  Decision  88/589/EEC  of  4  November  1988,  London  European/Sabena  (OJ  L  317,  24.11.1988,  p.  47).
Commission  Decision  92/213/EEC  of  26  February  1992,  British  Midland  v.  Aer  Lingus  (OJ  L  96,  10.4.1992,  p.  34);  B&I  v.  Sealink
(1992)  5  CMLR  255;  EC  Bulletin,  No  6  -  1992,  point  1.3.30.

((cid:211)(cid:212))(cid:217)It  would  be  insufficient  to  demonstrate  that  one  competitor  needed  access  to  a  facility  in  order  to  compete  in  the  downstream
market.  It  would  be  necessary  to  demonstrate  that  access  is  necessary  for  all  except  exceptional  competitors  in  order  for  access  to
be  made  compulsory.

((cid:211)(cid:213))(cid:217)As  noted  in  point  91.

((cid:211)(cid:214))(cid:217)See  point  105.

((cid:212)˝)(cid:217)Cases  6  and  7/73,  Commercial  Solvents  [1974(cid:129)  ECR  223.

((cid:212)˛)(cid:217)That  is  to  say,  to  use  the  network  to  reach  their  own  customers.

((cid:212)ˇ)(cid:217)This  is  also  dealt  with  under  the  ONP  framework:  see  Article  7(4)  of  the  Interconnection  Directive,  Article  12(4)  of  the  Voice

telephony  Directive  and  Annex  II  to  the  ONP  Framework  Directive.

((cid:212)—)(cid:217)Including  those  which  are  superfluous  to  the  party  requesting  access,  or  indeed  those  which  may  constitute  services  which  that

party  itself  would  like  to  provide  for  its  customers.

((cid:212)(cid:209))(cid:217)Tetra  Pak  International,  cited  in  footnote  63.

((cid:212)(cid:210))(cid:217)The  Commission  Communication  of  27  November  1996  on  Assessment  Criteria  for  National  Schemes  for  the  Costing  and
Financing  of  Universal  Service  and  Guidelines  for  the  Operation  of  such  Schemes  will  be  relevant  for  the  determination  of  the
extent  to  which  the  universal  service  obligation  can  be  used  to  justify  additional  charges  related  to  the  sharing  of  the  net  cost  in  the
provision  of  universal  service  (COM(96)  608).  See  also  the  reference  to  the  universal  service  obligation  in  point  59.

((cid:212)(cid:211))(cid:217)Case  26/75,  General  Motors  Continental  v.  Commission  [1975(cid:129)  ECR  1367,  at  paragraph  12.

((cid:212)(cid:212))(cid:217)Case  27/76,  United  Brands  Company  and  United  Brands  Continental  BV  v.  Commission  [1978(cid:129)  ECR  207.

((cid:212)(cid:213))(cid:217)Ahmed  Saeed,  cited  in  footnote  18,  at  paragraph  43.

((cid:212)(cid:214))(cid:217)Case  30(cid:220)87,  Corinne  Bodson  v.  Pompes  fun(cid:127)bres  des  r~gions  lib~r~es  [1988(cid:129)  ECR  2479.

See  also:
Joined  cases  110/88,  241/88  and  242/88  Fran(cid:136)ois  Lucazeau  and  others  v.  Soci~t~  des  Auteurs,  Compositeurs  et  Editeurs  de
Musique  (SACEM)  and  others  [1989(cid:129)  ECR  2811,  at  paragraph  25:  "When  an  undertaking  holding  a  dominant  position  imposes
scales  of  fees  for  its  services  which  are  appreciably  higher  than  those  charged  in  other  Member  States  and  where  a  comparison  of
the  fee  levels  has  been  made  on  a  consistent  basis,  that  difference  must  be  regarded  as  indicative  of  an  abuse  of  a  dominant
position.  In  such  a  case  it  is  for  the  undertaking  in  question  to  justify  the  difference  by  reference  to  objective  dissimilarities  between
the  situation  in  the  Member  State  concerned  and  the  situation  prevailing  in  all  the  other  Member  States.’

((cid:213)˝)(cid:217)See  ONP  rules  and  Commission  Recommendation  on  Interconnection  in  a  liberalised  telecommunications  market  (OJ  L  73,

12.3.1998,  p.  42  (Text  of  Recommendation)  and  OJ  C  84,  19.3.1998,  p.  3  (Communication  on  Recommendation)).

((cid:213)˛)(cid:217)For  example,  in  their  calculation  of  interconnection  tariffs.

((cid:213)ˇ)(cid:217)AKZO,  cited  in  footnote  62.

((cid:213)—)(cid:217)AKZO,  paragraph  71.

((cid:213)(cid:209))(cid:217)Commission  Decision  88/518/EEC  of  18  July  1988,  Napier  Brown/British  Sugar  (OJ  L  284,  19.10.1988,  p.  41):  the  margin
between  industrial  and  retail  prices  was  reduced  to  the  point  where  the  wholesale  purchaser  with  packaging  operations  as  efficient
as  those  of  the  wholesale  supplier  could  not  profitably  serve  the  retail  market.  See  also  National  Carbonising  Company,  cited  in
footnote  66.

((cid:213)(cid:210))(cid:217)However,  when  infrastructure  capacity  is  under(cid:220)utilised,  charging  a  different  price  for  access  depending  on  the  demand  in  the
different  downstream  markets  may  be  justified  to  the  extent  that  such  differentiation  permits  a  better  development  of  certain
markets,  and  where  such  differentiation  does  not  restrict  or  distort  competition.  In  such  a  case,  the  Commission  will  analyse  the
global  effects  of  such  price  differentiation  on  all  of  the  downstream  markets.

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((cid:213)(cid:211))(cid:217)Case  C(cid:220)310/93(cid:216)P,  BPB  Industries  und  British  Gypsum  v.  Commission  [1995(cid:129)  ECR  I(cid:220)865,  at  p.  904,  applying  to  discrimination  by

BPB  among  customers  in  the  related  market  for  dry  plaster.

((cid:213)(cid:212))(cid:217)That  is  to  say,  to  a  preferred  list  of  correspondent  network  operators.

((cid:213)(cid:213))(cid:217)Commission  Decision  94/663/EC  of  21  September  1994,  Night  Services  (OJ  L  259,  7.10.1994,  p.  20);  Commission  Decision

94/894/EC,  see  footnote  48.

((cid:213)(cid:214))(cid:217)Case  T(cid:220)34/92,  Fiatagri  UK  and  New  Holland  Ford  v.  Commission  [1994(cid:129)  ECR  II(cid:220)905;

Case  C(cid:220)8/95(cid:216)P,  New  Holland  Ford  v.  Commission,  judgment  of  28  May  1988,  not  yet  reported;
Case  T(cid:220)35/92,  John  Deere  v.  Commission  [1994(cid:129)  ECR  II(cid:220)957;
Case  C(cid:220)7/95(cid:216)P,  John  Deere  v.  Commission,  judgment  of  28  May  1988,  not  yet  reported.
(Cases  involving  applications  brought  against  Commission  Decision  92/157/EEC  of  17  February  1992,  UK  Agricultural  Tractor
Registration  Exchange)  (OJ  L  68,  13.3.1992,  p.  19).

((cid:214)˝)(cid:217)Case  8/72,  Vereniging  van  Cementhandelaaren  v.  Commission  [1972(cid:129)  ECR  977;

Case  123/85,  Bureau  National  Interprofessionnel  du  Cognac  v.  Clair  [1985(cid:129)  ECR  391.

((cid:214)˛)(cid:217)Case  56/65,  STM  [1966(cid:129)  ECR  235,  p.  249.

((cid:214)ˇ)(cid:217)Case  193/83,  Windsurfing  International  v.  Commission  [1986(cid:129)  ECR  611.

Non(cid:220)opposition  to  a  notified  concentration

(Case  No  IV/M.1182  -  ***  Akzo  Nobel/Courtaulds)

(98/C  265/03)

(Text  with  EEA  relevance)

On  30  June  1998,  the  Commission  decided  not  to  oppose  the  above  notified  concentration  and
to  declare  it  compatible  with  the  common  market.  This  decision  is  based  on  Article  6(1)(b)  of
Council  Regulation  (EEC)  No  4064/89.  The  full  text  of  the  decision  is  only  available  in
English  and  will  be  made  public  after  it  is  cleared  of  any  business  secrets  it  may  contain.  It  will
be  available:

-(cid:217)as  a  paper  version  through  the  sales  offices  of  the  Office  for  Official  Publications  of  the

European  Communities  (see  list  on  the  last  page),

-(cid:217)in  electronic  form  in  the  "CEN’  version  of  the  CELEX  database,  under  document  number
398M1182.  CELEX  is  the  computerised  documentation  system  of  European  Community
law;  for  more  information  concerning  subscriptions  please  contact:

EUR(cid:220)OP,
Information,  Marketing  and  Public  Relations  (OP/4B),
2,  rue  Mercier,
L(cid:220)2985  Luxembourg.
Tel.  (352)  29(cid:216)29(cid:220)42455,  fax  (352)  29(cid:216)29(cid:220)42763.