by Kevin Coates | Jun 26, 2011 | Antitrust, Competition Law and Regulation of Technology Markets, Featured, Telecoms
A margin squeeze occurs if the difference between the retail prices charged by a dominant company and the wholesale prices it charges its competitors for comparable products is negative, or insufficient to cover the costs to the dominant company of providing its own retail products on the downstream market. These issues are discussed in Chapter Four of Competition Law and Regulation of Technology Markets. Since the book went to press, the Court of Justice has given a preliminary ruling in the TeliaSonera case (Case C-52/09, Judgment of the Court (First Chamber) of 17 February 2011, Konkurrensverket v TeliaSonera Sverige AB, ECR reports 2011 Page 00000), and the European Commission has issued a prohibition decision against Telekomunikacja Polska, the Polish telecoms operator, fining it € 127 million for a margin squeeze. (Press release here.) Case C-52/09 TeliaSonera TeliaSonera is the Swedish fixed telephone network operator, owning the local telecoms infrastructure – the local loop. TeliaSonera offered its retail competitors unbundled access to the local loop in line with its obligations under Regulation (EC) No 2887/2000 of the European Parliament and of the Council of 18 December 2000 on unbundled access to the local loop (OJ 2000 L 336, p. 4). It also offered an ADSL product intended for wholesale users, enabling those operators to supply retail broadband services to end users, but it did so voluntarily, without regulatory obligation. At the same time, TeliaSonera offered retail broadband connection services directly to end users, in competition with the companies to whom it supplied wholesale services. Further to national court proceedings alleging a margin squeeze, the court referred the following questions to...