Spain asked the European court to annul the record fine on Telefonica

Spain has asked the TEU - Court of Justice of the European Union for an oral hearing held in Luxembourg to annul the record fine of 152 million euros The European Commission imposed on Telefónica in July 2007 for abuse of dominant market position in broadband.

The government has joined the resource and the Spanish operator, which was considered at a hearing held last May 23.

EU executive justified the sanction alleging that between 2001 and 2006, Telefónica charged its rivals excessive prices for the rental of their network infrastructure and left them a profit margin sufficient to compete.

The result of these business practices, according to Brussels, is that the Spanish operator Telefónica weakened its competitors, making their continued presence and growth, and forced them to incur losses if they wanted to match Telefónica's retail prices. The result is that Spanish consumers pay for access to broadband 20% more than the average EU-15, while the penetration rate was 20% lower and its growth to 30% lower, according with data from the Commission.

On appeal to the Court, the Spanish government has put forward as the main argument that the sanction "hampers the regulatory work undertaken by the CMT - Telecommunications Market Commission", which had already examined the alleged anticompetitive practice Telefonica.

The Telefonica fines "impacts on the regulatory framework for electronic communications in force in Spain, breaking the balance between ex ante regulation and competition law." And violates the "principle of legitimate expectations as the sanctioned operator and for the other operators in that market by breaking the regulatory framework in an area that had been regulated by the Commission's Telecommunications Market," as reported Spain.

For its part, the Commission has replied that "neither the contested decision implies any criticism of the CMT, or the 2002 regulatory framework is in jeopardy as a result of it."

(Published by Economics NewsPaper - June 8, 2011)