May 2012 – On 22 March 2012, the General Court dismissed actions brought by Slovak Telekom against the European Commission Decisions, which imposed an obligation on Slovak Telekom to provide particular information concerning its business activities (including its activities before the accession of Slovakia to the European Union) and stated that Slovak Telekom will be fined if it does not comply with the Decisions.
Factual background
On 22 March 2012, the General Court dismissed the actions brought by Slovak Telekom a.s.(“ST”) against the European Commission (the “Commission”) in joined cases T-458/09 and T-171/10 and upheld the Commission’s decisions C(2009) 6840 of 3 September 2009 (the “Decision I”) and C(2010) 902 of 8 February 2010 (the “Decision II”) (together the “Decisions”).
By the Decisions, Commission obliged ST to provide particular information concerning its business activities, including its activities before the accession of Slovakia to the European Union and stated that ST will be fined if it does not comply with the Decisions. ST subsequently applied to the General Court to have the Decisions set aside.
Summary of the Decisions and Judg ments
ST is a company incorporated on 1 April 1999 in the Slovak Republic that provides telecommunications services, in particular national and international telephone services, broadband internet services and the like. In January 2009, the Commission conducted an inspection on the premises of ST and eventually decided on 8 April 2009 to initiate proceedings against it for infringement of Article 102 TFEU. On 17 April and 17 July 2009, the Commission requested information from ST under Article 18(1) and (2) of Regulation No. 1/2003 (the “Regulation”). The scope of the requested information also covered the period before 1 May 2004. ST provided general information relating to this period but objected to giving data and more detailed calculations. In September 2009 the Commission adopted Decision I obliging ST to supply the requested information. ST eventually delivered the requested information on time. The Commission subsequently adopted Decision II in February 2010 requesting additional data.
On 13 November 2009 and 15 April 2010, ST lodged an action with the General Court and sought the annulment of the Decisions. In support of its action, ST has made three pleas alleging that the Commission committed:
(i) An error in law as the Commission was not entitled to apply Article 102 TFEU to conduct that occurred prior to the accession of the Slovak Republic to the EU,
(ii) An infringement of the “principle of the fairness of the proceedings” as the Commission did not conduct its investigations with the requisite care, seriousness and diligence because its assessment was biased by pre-accession information, and
(iii) An infringement of the principle of proportionality as the Commission asked for information and documents which were not necessary for its assessment of the alleged infringement and breached the principle of “domestic inviolability”, which requires the Commission not to exercise its investigative powers beyond what is necessary;
The General Court, after conducting an oral hearing rejected all three pleas and dismissed the action on 22 March 2012.
Comments
The General Court concluded that the Commission is entitled to request the necessary information from ST in spite of the fact that some of the information related to the period prior to the accession of Slovakia to the EU. Concerning the plea that the request of pre-accession information constituted an error in law, the General Court pointed to the relevant case law and concluded that
“any interpretation of Article 18(1) of Regulation No 1/2003 which amounts to prohibiting the Commission, as a matter of principle, from requesting from an undertaking information relating to a period during which the competition rules of the European Union did not apply, even though such information is necessary for the detection of a possible infringement of those rules from the point at which they become applicable, would risk depriving that provision of its effectiveness and would go against the Commission’s duty to examine carefully and impartially all the relevant evidence in the case under investigation”[1].
Even though the Commission has no power to decide on conduct that occurred before accession, it is entitled to request information that could help it to specify the context, to define the relevant markets or to determine whether the undertaking had held a dominant position on those markets. Moreover, in the General Court’s view, internal documents from enterprises concerned may also be relevant for the determination of whether an exclusion of competition was intended. Although the concept of abuse of dominant position is an objective one and does not require intent, intent can be taken into consideration when concluding that the undertaking abused a dominant position.
The General Court specified that the requested information has to fulfil certain criteria, in particular, there has to be a link between the requested information and the putative infringement. This correlation between these two elements is satisfied if the Commission may reasonably suppose that the document would help it to determine whether the alleged infringement had taken place. Furthermore, the information also has to be “necessary” for the detection of a possible infringement. However, the notion of “necessity” of the information can not be interpreted as “absolute necessity” as this would imply that the Commission, before requesting any information, would need to be familiar with the content and relative importance of the requested documents. Moreover, due to the Commission’s broad powers of investigation and assessment, it is for the Commission to decide which information is necessary.
The General Court also rejected the second plea by ST that the request for pre-accession information indicated that the Commission did not conduct its investigation with appropriate care and diligence. ST argued that Commission’s assessment of conduct that took place after the accession of Slovakia to the EU was biased by pre-accession information. On the contrary, the General Court supported the arguments of the Commission and stated that the Commission had a duty to make an impartial and careful examination on the basis of all information that could be relevant to the decision.
Concerning the third plea (the application of the principle of proportionality) ST argued that by requesting an extensive amount of non public information and documents, the Commission placed a burden on ST that was disproportionate and not necessary for the inquiry. However, the General Court concluded that the Decisions fulfilled all legal requirements and sufficiently justified why the requested information was necessary. Moreover, according to the General Court, ST’s reasoning concerning this plea more or less repeated the arguments put forward in the first plea (referred to under (i) above) and no further evidence as to why the Decisions constituted a violation of the principle of proportionality was provided.
For further information contact Zuzana Hodoňová, Counsel, at .
Source: Zuzana Hodoňová-Turayová, Martin Pavlus, The EU General Court states that the EU Commission is entitled to request a party to provide pre-accession information for the purpose of evaluating an alleged abuse of dominant position in the telecom sector (Slovak Telekom), 23 March 2012, e-Competitions, No45543, www.concurrences.com
[1] General Court, Joined Cases T-458/09 and T-171/10, para. 42; See also: C-269/90 Technische Universiät München, para 14; T-44/90 La Cinq v. Commission, para 86; Joined Cases T-191/98, T/212/98 to T-214/98 Atlantic Container Line and Others v Commission para 404.