Today, the EFTA Court dismissed (Case E-12/20) Telenor's application in its entirety. Accordingly, ESA's decision (Decision No 070/20/COL of 29 June 2020) whereby ESA imposed fines of EUR 111 951 000,- to Telenor ASA and Telenor Norge AS for breach of the EEA Agreement Art. 54 (abuse of dominant position), was upheld. Today's judgement of the EFTA Court is final and binding and marks the end of a decade with pending proceedings between Telenor and competition authorities.
Background
In 2012, the Norwegian Competition Authority (NCA) together with EFTA Surveillance Authority (ESA) carried out a joint dawn raid at Telenor's premises under suspicion of Telenor having abused its dominant position in the Norwegian mobile market. On this background, ESA and the NCA investigated Telenor for separate breaches of abuse of dominance in various mobile markets.
Both of these cases are now ended. The NCA's case was finalized by decision of the Supreme Court in November 2021 and ESA's case found its end today 5 May 2022.
The ESA’s case against Telenor – closed by the judgement of the EFTA Court 5 May 2022
In 2020, ESA fined Telenor EUR 111 951 000,- for having abused its dominant position in the wholesale market of selling residential mobile broadband services on tablets and laptops (margin squeeze).
According to ESA, Telenor put its competitors in the retail market for provision of stand-alone mobile broadband services to residential customers in Norway in a margin squeeze (i.e. negative margins on wholesale tariffs for equally efficient competitors) in various periods from August 2008 until 31 December 2012.
Telenor brought ESA's decision before the EFTA Court and the oral hearing was carried out Q2 2020. Today, on 5 May 2022, the EFTA Court's judgement was announced, whereby Telenor lost the case in its entirety and must bear all costs. The judgement is final and binding.
In the oral hearing before the EFTA Court in 2021, Telenor in essence argued that ESA erred in law in their decision and that they selectively used evidence and failed to investigate key matters.
Telenor stated inter alia that ESA's market definition was too narrow and that ESA's considerations of demand-side and supply-side substitution was wrong. Further that ESA had not carried out a complex effect analysis required by case law (no actual effect shown). They also argued that the power to impose fines relating to parts of the infringements (Network Norway and Ventelo) was time-barred and that the fine was disproportionate due to the lack of economic significance of the infringement and long investigation.
In their judgement, the EFTA Court quashed Telenor's arguments. They found that all of Telenor’s arguments were unfounded, hereunder that ESA had not erred in law or failed to provide sufficient evidence. They upheld ESA’s market definition and they also stated that ESA did not ere in law when they found that the negative margins on wholesale tariffs for equally efficient competitors was an abuse of dominance. In addition, the Court did not share Telenor's argument on time-bar, nor that ESA's imposed fine was disproportionate.
As Telenor lost on all of its pleas, Telenor was ordered by the EFTA Court to bear its own costs and those of ESA.
The judgement by the EFTA Court may be read on the EFTA Court's website.
The Norwegian Competition Authority’s case against Telenor was finally closed in November 2021
As mentioned above, ESA and the NCA coordinated their dawn raids in 2012 at Telenor's premises. In 2018, the NCA fined Telenor 788 million NOK (approx. EUR 78 500 000) for breach of the Norwegian Competition Act § 11 and the EEA Agreement Article 54, corresponding to TFEU Article 102 (prohibition of abuse of dominant position) in the wholesale market for mobile communication services.
According to the NCA, the alleged abuse consisted of a change of the terms in the network access agreement between Telenor and Network Norway in 2010, which gave Network Norway reduced incentives to expand the roll-out of the third mobile network in Norway. While building the third network, Network Norway bought access to the mobile networks of Telenor or Telia, in this case Telenor, in the areas where they had not yet obtained mobile coverage in their own mobile network. The change of terms in 2010 made it, according to the NCA, more profitable to continue to buy access to Telenor's network than expanding the third mobile network.
The NCAs decision was upheld by the Appeal Court and in November 2021 the Norwegian Supreme Court’s Appeals Selection Committee declined to review the appeal from Telenor. Thereby, the judgment of the Court of Appeal, i.e. the NCA's decision against Telenor was final and binding.
More information about the NCA's case against Telenor can be found on the NCA's homepage.
