Final report of the Hearing Officer in Case COMP/38.784 — Wanadoo España v Telefónica (Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21 )
Date: 2007-06-15
Institutions: European Commission
Subjects: Internet, Spain, competition law, exchange of information, restriction on competition, telecommunications industry, transmission network, wholesale trade

2.4.2008

EN

Official Journal of the European Union

C 83/3

Final report of the Hearing Officer in Case COMP/38.784 — Wanadoo España v Telefónica

(Pursuant to Articles 15 and 16 of Commission Decision 2001/462/EC, ECSC of 23 May 2001 on the terms of
reference of Hearing Officers in certain competition proceedings — OJ L 162, 19.6.2001, p. 21)

(2008/C 83/03)

The draft Decision gives rise to the following observations:

Introduction

The present case arises out of a complaint submitted by Wanadoo España, SL (now France Telecom España,
SA, ‘France Telecom’) against Telefónica, SA (‘Telefónica’) on 11 July 2003. After investigating the complaint
and on the basis of additional
information, the Commission came to the preliminary conclusion that
Telefónica had engaged in pricing practices in violation of Article 82 of the EC Treaty since September 2001
by applying a margin squeeze between the prices Telefónica's subsidiaries, Telefónica de España, SAU
(‘TESAU’), Telefónica Data de España, SAU (‘TDATA’) and Terra Networks España, SA (‘TERRA’) charge their
competitors for wholesale broadband access in Spain and the retail prices they charge end-users.

The Statement of Objections and the time to respond

The Statement of Objections (the ‘SO’) was sent on 20 February 2006 to Telefónica, TESAU, TDATA and
TERRA (the ‘Parties’). Upon reasoned request of the Parties, I extended the deadline to reply until 19 May
2006. The Parties duly responded (the ‘Reply’) on that date. A non-confidential version of the SO was sent
to France Telecom for their comments.

During the course of the procedure, upon request, I admitted several companies and associations of compa-
nies that are competitors of Telefónica into the procedure as interested third parties, namely: Tele2
Telecommunication Services, SL (‘Tele2’), Grupo Corporativo ONO, SA (‘ONO’), Jazz Telecom, SA (‘Jazztel’)
and Associación de Empresas Operadoras y de Servicios de Telecomunicaciones (‘ASTEL’).

Access to file

Access to the Commission's file was granted by CD-ROM on 21 February 2006. On 7 April 2006, the rele-
vant Commission service supplemented the access to file by providing new non confidential versions of
certain documents.

On 21 April 2006, Telefónica wrote to me requesting further access to certain documents on the Commis-
sion's file. The relevant Commission service had refused to grant access to these documents on the basis of
their confidentiality. Telefónica argued that these documents, in particular information about competitors'
costs and lines contracted through alternative wholesale offers, could contain exonerating evidence relevant
to Telefónica's defence. I took the view that the requested information constituted business secrets and was
not necessary for Telefónica's defence; therefore, I did not allow the disclosure of these documents.

Oral Hearing

An oral hearing took place on 12 and 13 June 2006 at the request of Telefónica and other interested
third parties. The complainant, France Telecom; further, Jazztel, ONO, and ASTEL attended the hearing and
presented their views.

Letter of Facts

On 11 January 2007, the relevant Commission service sent a Letter of Facts to Telefónica informing them of
certain new facts that the Commission intended to include in a potential final decision. Further access to file
was provided by way of a new CD-ROM. Telefónica replied to the Letter of Facts on 12 February 2007.

In their reply, Telefónica raised certain issues which they considered to be relevant to their rights of defence.
In particular, Telefónica argued that they had not been given the opportunity to comment meaningfully on
certain issues in the Letter of Facts.

C 83/4

EN

Official Journal of the European Union

2.4.2008

After examining the relevant circumstances, I found that the relevant Commission service provided further
explanations upon Telefónica's request and granted a one week extension because of this additional informa-
tion. Telefónica did not request any further clarification. I considered that Telefónica had been properly
informed and provided with sufficient opportunity to comment on the issues contained in the Letter of
Facts and the conclusions the Commission intended to draw therefrom.

The draft Decision

In the draft Decision, the Commission updated the margin squeeze calculations for the second half of 2005
and the year 2006 as indicated in the Letter of Facts.

The draft Decision submitted to the Commission only contains objections in respect of which the parties
have been afforded the opportunity of making known their views.

I conclude that the rights of the parties to be heard have been respected in the present case.

Brussels, 15 June 2007.

Karen WILLIAMS