Competition: Commission welcomes Court judgment wholly upholding margin squeeze decision against Deutsche Telecom

The European Commission welcomed the judgement of the European Court of First Instance (CFI) of 10 April, 2008, upholding in its entirety a 2003 Commission decision imposing a €12.6 million fine on Deutsche Telekom AG (DT) for abusing its dominant position on the German telecommunications market. For more than 5 years DT charged unfair prices for the provision of local access to its fixed telecommunications network (local loops). This meant that alternative operators could not compete effectively with Deutsche Telekom and German consumers were deprived of the benefits of choice and price competition for more than five years. The CFI ruling is important, not only for German consumers, but also because it confirms that dominant operators who have a regulatory obligation to supply access to their networks cannot evade this obligation through a margin-squeeze price policy.