EU regulatory case law, July 2014: Telefónica’s broadband margin squeeze and access to residence permit data

In this issue of Aphaia’s monthly recap of relevant ECJ judgements read about how Telefónica is found to have abused its dominant position in access to broadband markets in Spain, and about the protection of individuals with regard to the processing of personal data in residence permits.

Competition

Case C 553/12 P Commission v DEI on maintenance of preferential rights granted by the Hellenic Republic in favour of a public undertaking for the exploration and exploitation of lignite deposits

The Court of Justice of the European Union set aside the judgment of the General Court of the European Union in case T‑169/08 DEI v Commission, by which the General Court annulled Commission Decision on the granting or maintaining in force by the Hellenic Republic of rights in favour of DEI for the extraction of lignite.

The Court explained that infringement of Article 86(1) EC in conjunction with Article 82 EC may be established irrespective of whether any abuse actually exists. All that is necessary is for the Commission to identify a potential or actual anti‑competitive consequence liable to result from the State measure at issue. Such an infringement may thus be established where the State measures at issue affect the structure of the market by creating unequal conditions of competition between companies, by allowing the public undertaking or the undertaking which was granted special or exclusive rights to maintain (for example by hindering new entrants to the market), strengthen or extend its dominant position over another market, thereby restricting competition, without it being necessary to prove the existence of actual abuse.

Contrary to the General Court’s analysis in the judgment under appeal, it is sufficient to show that potential or actual anti-competitive consequence is liable to result from the State measure at issue; it is not necessary to identify an abuse other than that which results from the situation brought about by the State measure at issue. It also follows that the General Court erred in law in holding that the Commission,  by finding that DEI, a former monopolistic undertaking, continued to maintain a dominant position on the wholesale electricity market by virtue of the advantage conferred upon it by its privileged access to lignite and that that situation created inequality of opportunity on that market between the applicant and other undertakings, had neither identified nor established to a sufficient legal standard the abuse to which, within the meaning of Article 82 EC, the State measure in question had led or could have led DEI. DEI was wrong to assert that, in order to apply the theory that the public undertaking extended its dominant position from one market to another, which was neighbouring and separate, the Court’s case-law requires the Commission to show that the State measure at issue grants or enhances special or exclusive rights.

It is sufficient that the measure at issue creates a situation in which a public undertaking or an undertaking on which the State has conferred special or exclusive rights is led to abuse its dominant position. It is not necessary for the Commission to show, in every case, that the undertaking concerned enjoys a monopoly or that the State measure at issue awards it exclusive or special rights over a neighbouring and separate market, or that it has any regulatory powers. The claim that there is an obligation on the Commission to show the impact of the infringement of the combined provisions of Articles 86(1) EC and 82 EC on the interests of consumers must also be rejected; Article 82 EC may moreover cover practices which are harmful as a result of their impact on an effective competition structure.

Finally, DEI’s argument that the Commission defined lignite as an essential facility is based on a false premiss, as the Commission only referred to DEI’s situation of ‘quasi-monopoly’ on the electricity wholesale market.

Case C-295/12 P Telefónica and Telefónica de España v Commission on abuse of dominant position in Spanish markets for access to broadband internet

The Commission by its decision declared that Telefónica had abused their dominant position by imposing unfair prices on their competitors in the form of a margin squeeze between the prices for retail broadband access on the Spanish ‘mass market’ and the prices on the regional and national wholesale broadband access markets throughout the period from September 2001 to December 2006. The Commission considered that there was clear-cut abuse on the part of an undertaking holding a virtual monopoly and that the abuse was to be classified as ‘very serious’.

In case T‑336/07 Telefónica and Telefónica de España v Commission the General Court of the European Union dismissed the action for annulment of the Commission’s decision. The Court of Justice of the European Union dismissed the appeal, lodged by Telefónica and Telefónica de Espaħa, by which appellants sought to had set aside the judgment of the General Court. The fine of almost €152 million imposed by the Commission and upheld by the General Court remained unchanged. The Court observed that the General Court did carry out an in-depth review of the Commission’s decision in the light of the pleas in law put forward by Telefónica, which satisfied the requirements of a review exercising its powers of unlimited jurisdiction. The Commission demonstrated that there were potential anti-competitive effects that may have excluded competitors who were at least as efficient as Telefónica, which was sufficient to establish that the practice of squeezing margins was abusive.

The Commission’s interpretation of EU law regarding the conditions for the application of that law to the practice of squeezing margins was reasonably foreseeable at the time the infringement was committed. The General Court did not err in law in finding that the restriction of the relevant geographic market to Spain does not mean that the infringement cannot be classified as ‘very serious’. The classification of an infringement as ‘serious’ or ‘very serious’ does not depend only on the size of the relevant geographic market but also on other criteria characterising the infringement. The Court also considered that the Commission gave adequate reasons for its decision, that there was no breach of the principle of equal treatment and that Telefónica has failed to show in what way the starting amount of €90 million imposed by the Commission in its decision was excessive to the point of being disproportionate.

Environment

Case C 573/12 Ålands Vindkraft on national support scheme providing for the award of tradable green certificates for installations producing electricity from renewable energy sources

The request for a preliminary ruling concerned the interpretation of point (k) of the second paragraph of Article 2 and Article 3(3) of Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC and of Article 34 TFEU. The request has been made in proceedings between Ålands Vindkraft AB and the Energimyndigheten (Swedish Energy Agency) concerning the Energimyndigheten’s refusal to authorise, for the purposes of the award of electricity certificates, a wind farm in Finland operated by Ålands Vindkraft.

The Court held that it is allowed for a Member State to establish a support scheme, which provides for the award of tradable certificates to producers of green electricity solely in respect of green electricity produced in the territory of that State and which places suppliers and certain electricity users under an obligation to deliver annually to the competent authority a certain number of those certificates, corresponding to a proportion of the total volume of electricity that they have supplied or consumed. Article 34 TFEU must be interpreted as not precluding national legislation, which provides for the award of tradable certificates to green electricity producers solely in respect of green electricity produced in the territory of the Member State concerned and which places suppliers and certain electricity users under an obligation to surrender annually to the competent authority a certain number of those certificates, corresponding to a proportion of the total volume of electricity that they have supplied or used, failing which they must pay a specific fee. It is for the national court to determine, taking into account all relevant factors — which may include the EU legislative context in which the legislation at issue in the main proceedings arises — whether, in terms of its territorial scope, that legislation meets the requirements of the principle of legal certainty.

Case C-600/12 Commission v Greece - by not prohibiting the uncontrolled management of a landfill site in the National Marine Park of Zakinthos (Zante), Greece has infringed European Union environmental legislation. The overfull landfill site in question is detrimental to the habitat of the sea turtle (Caretta caretta)

The Court of Justice of the European Union declared that by keeping in operation, on the Island of Zakinthos, an overfull landfill site which is not functioning properly and which does not comply with EU environmental legislation, Greece has failed to fulfill its obligations under the Directive on waste and the Directive on the landfill of waste. Moreover, by renewing the landfill permit in breach of EU law, Greece has also failed to fulfill its obligations relating to the conservation of habitats and of wild fauna and flora.

Data protection

C-141/12 YS and Others on protection of individuals with regard to the processing of personal data

The requests for a preliminary ruling concerned the interpretation of Articles 2(a), 12(a) and 13(1)(d), (f) and (g) of Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data, and of Articles 8(2) and 41(2)(b) of the Charter of Fundamental Rights of the European Union. The requests have been made in two sets of proceedings between YS, a third country national who applied for a residence permit for a fixed period in the Netherlands, and the Minister for Immigration, Integration and Asylum and between the Minister and M and S, also third country nationals who made the same type of application, concerning the Minister’s refusal to communicate to those nationals a copy of an administrative document drafted before the adoption of the decisions on their applications for residence permits.

The Court held that the data relating to an applicant for a residence permit contained in an administrative document, such as the ‘minute’ at issue in the main proceedings, setting out the grounds that the case officer puts forward in support of the draft decision which he is responsible for drawing up in the context of the procedure prior to the adoption of a decision concerning the application for such a permit and, where relevant, the data in the legal analysis contained in that document, are ‘personal data’ within the meaning of that provision, whereas, by contrast, that analysis cannot in itself be so classified.

An applicant for a residence permit has a right of access to all personal data concerning him which are processed by the national administrative authorities. For that right to be complied with, it is sufficient that the applicant be in possession of a full summary of those data in an intelligible form, that is to say a form which allows that applicant to become aware of those data and to check that they are accurate and processed in compliance with that directive, so that he may, where relevant, exercise the rights conferred on him by that directive. However, the applicant for a residence permit cannot rely on that provision against the national authorities.

C-350/12 P Council v in 't Veld on access to documents of the institutions

In case T‑529/09 In’t Veld v Council, the General Court annulled in part the decision of the Council refusing Ms in’t Veld full access to a document containing the opinion of the Council’s Legal Service concerning a recommendation from the European Commission to the Council to authorize the opening of negotiations between the European Union and the United States of America for the conclusion of an international agreement to make available to the United States Treasury Department financial messaging data. By its appeal, the Council claimed that the General Court infringed two provisions of Regulation No 1049/2001 restricting the right of access to documents of the institutions. The first plea was thus based on an infringement of the third indent of Article 4(1)(a) of Regulation No 1049/2001, relating to the protection of the public interest as regards international relations, and the second alleged infringement of the second indent of Article 4(2) of the regulation, which provides for an exception in respect of legal advice. The Court of Justice of the European Union dismissed the appeal in its entirety.

Ines Grah

Ines Grah

Ines Grah, Aphaia’s guest blogger, holds a law degree in state aid and is currently writing a thesis on individuals’ access to the EU Court of Justice as part of the doctoral programme of the Faculty of Law at the University of Ljubljana.
Ines Grah

Leave a Reply

Your email address will not be published. Required fields are marked *