Case C-280/08 P: Appeal brought on 26 June 2008 by Deutsche Telekom AG against the judgment delivered by the Court of First Instance on 10 April 2008 in Case T-271/03 Deutsche Telekom v Commission
Date: 2008-06-26
Institutions: Court of Justice
Subjects: European Commission, action for annulment (EU), appeal, competition, telecommunications, telephone charges

30.8.2008

EN

Official Journal of the European Union

C 223/31

— By its second (alternative) plea in law,

the Court of First

the Commission
submits that
Instance was wrong to
conclude that the disputed measure is not selective, that is
to say, that it does not favour certain undertakings within
the meaning of Article 87(1) EC. The Commission goes on
to submit
Instance erred in
the Court of First
concluding that, even if the measure were selective, it would
still not constitute State aid in view of its purpose and on
the ground that that measure would be justified by the
nature and general scheme of the system.

that

Appeal brought on 26 June 2008 by Deutsche Telekom AG
against
the judgment delivered by the Court of First
Instance on 10 April 2008 in Case T-271/03 Deutsche
Telekom v Commission

(Case C-280/08 P)

(2008/C 223/48)

Language of the case: German

Parties

Appellant: Deutsche Telekom AG (represented by: U. Quack,
Rechtsanwalt, S. Ohlhoff, Rechtsanwalt, M. Hutschneider,
Rechtsanwalt)

Other parties to the proceedings: Commission of the European
Communities, Arcor AG & Co. KG, Versatel NRW GmbH,
formerly Tropolys NRW GmbH,
formerly CityKom Münster
GmbH Telekommunikationsservice, EWE TEL GmbH, HanseNet
Telekommunikation GmbH, Versatel Nord-Deutschland GmbH,
formerly KomTel Gesellschaft für Kommunikations- und Infor-
mationsdienste mbH, NetCologne Gesellschaft für Telekommu-
nikation mbH, Versatel Süd-Deutschland GmbH, formerly tesion
Telekommunikation GmbH, Versatel West-Deutschland GmbH
& Co. KG, formerly VersaTel Deutschland GmbH & Co. KG

Form of order sought

— Set aside the judgment of the Court of First Instance of

10 April 2008 in Case T-271/03;

— annul Commission Decision 2003/707/EC (1) of 21 May
2003, notified under document number C(2003)1536;

— in the alternative, reduce, at the Court's discretion, the fine
the
imposed on Deutsche Telekom AG in Article 3 of
contested Commission decision;

— order the Commission to pay the costs.

Pleas in law and main arguments

The appellant bases its appeal against the above mentioned
judgment of
Instance on the following
grounds of appeal.

the Court of First

The judgment infringes Article 82 EC and the principle of the protec-
tion of
legitimate expectations because in the present case, there
has been no objective infringement of Article 82 EC attributable
to the appellant and the appellant has also not been at fault.
The judgment fails to take into account, in the manner required
by law, repeated examinations of the purported margin squeeze
by the German regulatory authority for telecommunications and
post (‘RegTP’), which was responsible at that time for regulating
the appellant. RegTP repeatedly examined whether there was an
anti-competitive margin squeeze in respect of local loops and
found that there was none. In a situation like that, the responsi-
bility of the relevant regulatory authority overrides and restricts
the regulated undertaking's special responsibility for maintaining
the structure of the market. In the light of the regulatory deci-
sions, the appellant had a right to assume that its conduct was
not anti-competitive. The assumption that the appellant could
have reduced the purported margin squeeze by increasing its
ADSL charges is contrary to the Court's own position that, in
the context of examining a margin squeeze, ‘cross-subsidisation’
between different markets is not to be taken into account. In
addition, the Court of First Instance was wrong not to object to
the fact that the Commission failed to examine whether an
increase in ADSL charges would have actually reduced the
purported margin squeeze.

The judgment also infringes Article 82 EC because the Court of
First Instance erred in examining whether the conditions for the
application of Article 82 EC were met. In the present case, a
margin squeeze test is inherently unsuitable to establish abuse.
In a situation where charges for wholesale access were imposed
by the relevant regulatory authority — as is the case here — the
test in itself could produce anti-competitive results.

In this context, the Court of First Instance also infringed its obli-
gation to state the reasons for its judgment.

In the context of examining the methodology used by the
Commission to establish that there had been a margin squeeze,
the contested judgment also contains errors of law on essential
points. First of all,
the so-called ‘as-efficient-competitor-test’,
which the Court of First Instance used as a generally applicable
standard of comparison, can in any event not be used in a situa-
tion in which the dominant undertaking and its competitors
operate under different regulatory and actual competitive condi-
tions — as is the case here. Second, the margin squeeze test
only takes into account charges for access, while charges for
additional
(especially telephone
calls) that require the same wholesale service, were not consid-
ered. The judgment's findings on the effects of the purported
margin squeeze suffered from several errors in law and the judg-
ment failed to examine whether the purported margin squeeze
supported the Court of First Instance's findings on the structure
of the market.

telecommunication services

C 223/32

EN

Official Journal of the European Union

30.8.2008

the

judgment

Further,
of
to
Article 253 EC as regards the Commission's obligation to state
the reasons on which its decisions are based.

requirements

observe

fails

the

Finally, the Court of First Instance also wrongly applied Article 15(2)
of Regulation 17 when it failed to object to the Commission's
calculation of the fine, even though the Commission wrongly
assumed that there had been a serious infringement, failed to
take proper account of the sector specific regulation of the
appellant's charges and should not have imposed more than a
symbolic fine. In doing so, the Court of First Instance failed to
take into account,
in a legally correct manner, all relevant
factors and to deal to the requisite legal standard with the appel-
lant's arguments concerning cancellation or reduction of the
fine.

(1) OJ 2003 L 263, p. 9.

Pleas in law and main arguments

The period within which the directive had to be transposed into
national law expired on 12 June 2007.

(1) OJ 2005 L 149, p. 22.

Action brought on 27 June 2008 — Commission of the
European Communities v United Kingdom of Great Britain
and Northern Ireland

(Case C-284/08)

(2008/C 223/50)

Language of the case: English

Action brought on 27 June 2008 — Commission of the
European Communities v Kingdom of the Netherlands

Parties

(Case C-283/08)

(2008/C 223/49)

Language of the case: Dutch

Parties

Applicant: Commission of the European Communities (repre-
sented by: W. Roels and W. Wils, Agents)

Defendant: Kingdom of the Netherlands

Form of order sought

of

2005

11 May

concerning

the European Parliament and of

— declare that, by failing to adopt the laws, regulations and
administrative provisions necessary to comply with Directive
2005/29/EC (1) of
the
Council
unfair
business-to-consumer commercial practices in the internal
market and amending Council Directive 84/450/EEC, Direc-
tives 97/7/EC, 98/27/EC and 2002/65/EC of the European
and Regulation (EC)
Parliament
the Council
and of
No 2006/2004 of
the
Council (‘Unfair Commercial Practices Directive’), or in any
event by failing to notify the Commission thereof,
the
Kingdom of the Netherlands has failed to fulfil its obliga-
tions under that directive;

the European Parliament and of

— order the Kingdom of the Netherlands to pay the costs.

Applicant: Commission of the European Communities (repre-
sented by Messrs W. Roels and W. Wils, Agents)

Defendant: United Kingdom of Great Britain and Northern
Ireland

The applicant claims that the Court should:

— declare that, by failing to adopt the laws, regulations and
administrative provisions necessary to comply with Directive
2005/29/EC of the European Parliament and of the Council
of 11 May 2005 on unfair business-to-consumer commer-
cial practices in the internal market and amending Council
Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and
2002/65/EC of the European Parliament and of the Council
and Regulation (EC) No 2006/2004 of the European Parlia-
ment and of
(‘Unfair Commercial Practices
Directive’) (1), or in any event by failing to communicate
them to the Commission, the United Kingdom of Great
Britain and Northern Ireland has failed to fulfil its obliga-
tions under the Directive in its territory of Gibraltar;

the Council

— order United Kingdom of Great Britain and Northern Ireland

to pay the costs.

Pleas in law and main arguments

The period within which the directive had to be transposed
expired on 12 June 2007.

(1) OJ L 149, p. 22.