August 3, 2020

The Supreme Court down another fine of Competition to Telefónica, Vodafone and Orange for 120 million | Economy



New setback in the courts to the competition authority. The Supreme Court has confirmed the ruling of the National Court that annulled the sanction of 120 million that the old National Competition Commission imposed in 2012 to the companies Telefonica, Vodafone and France Telecom (today Orange) for abuse of dominance position considering that they charged excessive prices in the wholesale markets for short messages SMS and MMS.

When it was imposed, it was the highest fine of the CNC after the 2009 sanction to a group of six insurers (Asefa, Mapfre, Caser, Scor, Munich Re and Swis Re) also of 120 million euros, for agreeing prices. The CNC is now integrated into the macroregulator CNMC (National Commission of Markets and Competition).

The Supreme Court has dismissed the State Attorney's appeals against the three judgments of the National Court that annulled the three sanctions imposed, from 46.4 million to Telefónica, 43.5 to Vodafone and 29.9 to France Telecom.

Reports "insufficient and incoherent"

The high court reminds that the judgment of instance analyzed the data and reports on which the administrative resolution was based to delimit the relevant market (a separate market for the termination of short messages SMS and MMS referred to the own network of each one of the telephone operators) and to appreciate a position of individual domain of the operators on this market, "concluding that the data and reports on which the administrative resolution is founded are insufficient, inconsistent with other data and reports and are based on not verified in objective data, so it appreciates inconsistencies and a deficit of motivation to delimit the markets and the position of individual domination of the sanctioned companies that leads him to annul the challenged sanctioning resolution ".

The competition authority opened the file to the three operators in January 2011 because it detected that they were using abusive prices in the "origination and termination of SMS and MMS short messages". Each time a customer of an operator without its own network sent an SMS (text messages) or an MMS (multimedia messages), the operators that lent it the network (Movistar, Vodafone and France Telecom) charged a price for originating that message . According to the CNC, the three used their monopoly situation in these services to impose abusive wholesale prices.

The sentences of the Audiencia Nacional confirmed now are based on the fact that the existence of a position of individual domain of Telefónica, Vodafone and Orange is not justified.

The Supreme Court sets as jurisprudential doctrine, among other things, that, according to the jurisprudence of the Court of Justice of the European Union, the judicial control of complex economic assessments made by the regulator can be extended, not only to the "material accuracy of the evidence invoked, its reliability and coherence "but also to the relevance of the data and its suitability to sustain the conclusions reached. So when the court understands that the deductions obtained do not have a sufficient and reliable basis or there is no logical correspondence between the decision obtained with the data on which it is based, they can annul the decision of the regulatory body.

Likewise, it indicates that "the determination of the relevant market when the sanctioning authority is exercised can be based on a wide range of data and reports, but does not exempt the regulatory body from carrying out an analysis of that market, based on all available reports and data. and adequate, when exercising its sanctioning power ".

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