Dutch High Court rules that unfair pricing will only amount to an abuse when the pricing is excessive

08 June 2015

Gerlof Bierma

On 10 March 2015, a Dutch High Court dismissed the claims of UPC alleging that KPN and T-Mobile abused their dominant position by applying unfair MTA-tariffs. The Court concluded that unfair pricing will only amount to an abuse when the prices are excessive.

UPC is, inter alia, a provider of fixed telephony services. When its subscribers want to communicate with subscribers of a mobile phone service provider, such as T-Mobile and KPN, an interconnection has to be established between the networks of both providers. T-Mobile and KPN entered into agreements with UPC for this so-called 'mobile terminating access-service' ("MTA") which involved specific MTA-tariffs. The level of these tariffs has been the subject of a number of administrative procedures before the Independent Post and Telecommunications Authority and a specialized court, the College of Trade and Industry ("CBb").

In a decision of 5 November 2010 the CBb ruled that the MTA-tariffs in the agreements were set too high. Following this ruling, UPC commenced new proceedings based on undue payment of part of the MTA-tariff, because the tariffs exceeded what was deemed legitimate. Moreover, UPC claimed that the charging of such higher rates was unlawful because, inter alia, it would amount to an abuse of dominance by KPN/T-Mobile. In 2013 the District Court of Rotterdam rejected UPC's claims.

On appeal, UPC argued that the District Court applied the wrong standard by assessing the alleged abuse solely on the basis of the doctrine of 'excessive prices' as laid down in the United Brands ruling. According to UPC, the scope of Article 102 of the Treaty on the Functioning of the European Union ("TFEU") is broader and the Court should have assessed whether T-Mobile/KPN gained any trade advantage which they would not have had in a situation of normal and sufficiently effective competition.

The Court of Appeal held that the United Brands ruling does not only apply to situations which concern excessive prices but also in cases where unfair low prices are imposed, therefore the scope of Article 102 TFEU is indeed broader. As a general rule, in cases of unfair low prices, the test is whether the undertaking with a dominant position has used its dominance to gain a trade advantage that it would not have had in a situation of normal and sufficiently effective competition. However, according to the Court of Appeal, in order to determine whether unfair high pricing amounts to an abuse, United Brands applies and such pricing will only amount to an abuse when the pricing is excessively high. Therefore the mere fact of unfair pricing by KPN/T-Mobile cannot automatically qualify as an abuse. After applying the test set down in United Brands, the Court of Appeal concluded the MTA-tariff is not excessive and rejected the claim of UPC.

Source: rechtspraak.nl, 31 March 2015, ECLI:NL:GHDHA:2013:5381

Reproduced from Practical Law with the permission of the publishers (www.practicallaw.com).

Authors

Image of Gerlof Bierma

Gerlof Bierma

Associate
Netherlands

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