On 10 February 2005, the European Commission sent a statement of objections to the German mobile networks operators T-Mobile and Vodafone over the rates they charge foreign mobile network operators when providing international roaming to customers travelling to Germany.
The Commission considers that each individual mobile German network constituted a separate market from 1997 until at least the end of 2003. It also believes that each of T-Mobile and Vodafone enjoyed a dominant position with regard to their respective networks.
The Commission further believes that during this period each abused its dominant position in the German market for the provision of international roaming services at the wholesale level on its own network by charging unfair and excessive prices to European mobile network operators. Abuse of a dominant position is contrary to Article 82 EC Treaty.
The Commission noted that the price of roamed calls far exceeded T-Mobile's and Vodafone's prices for calls made on their networks via Independent Service Providers (ISPs) even though, in its view, the provision of wholesale international roaming bears considerable similarities to the provision of wholesale airtime access to ISPs. The statement of objections is therefore querying why such large differences exist between charges for roaming and calls via ISPs in Germany.
The parties now have two months to respond in writing and around a further month to make oral representations, following which the European Commission can take a final decision. This may involve the finding of an infringement and the imposition of fines.
Similar statements of objections were sent in July 2004 to O2 and Vodafone regarding charges for international roaming to customers travelling to the UK.
For further details of the European Commission's press release, please click here.
Damages claims based on competition law infringement
A decision of the European Commission based on Article 82 EC Treaty (abuse of dominance) or Article 81 EC Treaty (e.g. cartels) may give rise to claims by third parties for damages arising from a breach of competition law. Recent legal developments have made it easier to claim through the courts for losses resulting from competition law infringements:
- in the UK, the creation of a specialist court, the Competition Appeal Tribunal (CAT), capable of hearing damages claims based on breaches of UK and EU competition law (introduced by the Enterprise Act 2002 in June 2003);
- the European Commission's modernisation programme effective from May 2004, emphasising the "essential part" national courts have to play in the local enforcement of competition law;
- the breakthrough for UK competition damages actions when for the first time, in May 2004, the Court of Appeal awarded damages based on infringement of competition law; and
- the breakthrough case for victims of price cartels decided in Germany in April 2004, which awarded damages in respect of prices inflated by cartel activity.
Potential defendants should bear in mind:
- the likelihood of successful damages claims being made against them in a number of situations – for instance, if they discover cartel activity in their business; if they are considering "blowing the whistle" on any cartel activity in which they are involved; if an anti-trust investigation has been or is to be commenced against them; if a competition infringement decision is taken against them by an anti-trust authority, such as the European Commission;
- in which jurisdictions they might be exposed to competition damages claims; and
- if the infringement is an international cartel, the possible impact of US treble damages.
If you are affected by this case or interested in the enforcement of competition law through litigation (e.g. as a potential claimant or potential defendant), or generally you have queries regarding competition litigation, please contact:
Potential claimants wishing to claim damages for competition law infringement will have to show that:
- there has been an infringement of the competition rules;
- they have suffered loss;
- they have suffered this loss as a direct result of the infringement; and
- they have brought their claim within the relevant time limits.