EU Court Upholds Antitrust Fines Against German Telecom

Deutsche Telekom, a major German telecommunications company, faces massive fines after Europe’s top court found it unfairly shutting out competitors in Slovakia.

A woman walks by the entrance to the European Court of Justice in Luxembourg in 2015. (AP Photo/Geert Vanden Wijngaert, File)

(CN) — Europe’s top court on Thursday upheld hefty fines against German telecommunications company Deutsche Telekom and its Slovak unit for unfairly squeezing out broadband competitors in Slovakia.

The European Court of Justice ruled the European Commission was right to levy massive fines against Deutsche Telekom and Slovak Telekom in 2014.

The high court’s finding affirms a ruling by the General Court, a lower tribunal, which imposed reduced penalties. Jointly, the two companies face $44.9 million in penalties and Deutsche Telekom an additional $22.4 million fine.

In 2014, the European Commission found that the two companies breached antitrust rules by shutting out competitors from the Slovak market for five years by refusing to supply them with unbundled access to its local loops, a practice known as a margin squeeze. A local loop is comprised of the lines connecting a subscriber’s telephone jack with the main distribution frame of a fixed telephone network.

EU regulators said Slovak Telekom’s strategy between 2005 and 2010 made it impossible for other operators to use Slovakia’s main telephone network infrastructure without incurring a loss. This delayed or stopped other companies from entering the market to the disadvantage of consumers, the commission said.

Deutsche Telekom was fined in 2003 for a similar margin squeeze in broadband markets in Germany.

Courthouse News reporter Cain Burdeau is based in the European Union.

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