EU Court Upholds Telefonica Fine

The EU’s second-highest court agreed with the European Commission’s 2007 findings that Telefonica charged its competition excessive prices to access its broadband network.  The price squeeze forced rivals to charge inflated retail prices or loss money.

The General Court rejected Telefonica’s position that commission erred.  “In the absence of distortions resulting from the margin squeeze,” the court explained, “the competition would have probably been stronger in the retail market, which would have benefited the consumers in terms of price, choice and innovation.”

The court also denied the Spanish government’s appeal, claiming that the Commission exceeded its authority.  Complaince with Spanish law, the court explained, could not immunize Telefonica from European law.

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