Deutsche Telekom v. Commission

Deutsche Telekom (DT) (defendant) was a German telecommunications operator, providing several telecommunications options to wholesale customers (other telecommunications operators) and retail customers (individual subscribers). DT held a legal monopoly in the retail space until new regulations opened the market to competition in 1996. DT was subject to pricing and conduct rules set by a German telecommunications regulator, the Federal Ministry of Post and Telecommunications (BMPT). DT’s wholesale and retail prices were a combination of monthly subscription charges and one-time fees. BMPT set suggested charges, with which DT complied. The European Commission (the commission) (plaintiff) found that DT held a dominant position in the relevant telecommunications product and service markets. The commission also found that DT had abused its dominance in violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU) by charging abusive prices and engaging in a market squeeze by charging its wholesale customers higher prices than its retail customers. That meant that wholesale customers would need to charge their retail customers higher prices than DT charged its retail customers in order to make a profit. DT argued that it could not have engaged in abusive pricing because its wholesale charges were set by its regulator, BMPT, and appealed the commission’s findings.