Antitrust Alert: ECJ Affirms Judgment Against Deutsche Telecom in Margin Squeeze Case

On 14 October 2010, the European Court of Justice (ECJ) upheld the European Commission's EUR 12.6 million fine on Deutsche Telekom for imposing an abusive margin squeeze. In doing so, the ECJ confirmed the judgment of the General Court and established margin squeeze as a stand-alone abuse under Article 102 TFEU.

Background

In 2003, the Commission imposed a EUR 12.6 million fine on Deutsche Telekom for abuse of its dominant position under Article 102 of the Treaty on the Functioning of the European Union (TFEU) (formerly Article 82 of the EC Treaty). The abuse consisted of setting wholesale and retail prices for access to its local loop at levels such that new competitors could not profitably offer retail access services to consumers using wholesale access purchased from Deutsche Telekom.