Commission warns Deutsche Telekom over local loop prices

The Commission on 8 May stated it believes that Deutsche Telekom abuses its dominant position through unfair pricing practices.

According to the Commission's preliminary view, Deutsche
Telekom holds a dominant position on the markets for both wholesale
and retail local loop access. As set out in the 'Statement of
Objections', the Commission believes that Deutsche Telekom abuses
its dominant position through unfair pricing practices amounting to
a margin squeeze between its wholesale and retail tariffs. The
Commission deems the margin squeeze exists because of an
insufficient spread between Deutsche Telekom's tariffs for retail
subscriptions and wholesale local loop access. Deutsche Telekom has
been given two months to respond to the competition watchdog's
"statement of objections".

Deutsche Telekom has denied any wrongdoing. The
spokesperson for Deutsche Telekom, Mr Stefan Broszio, stated: "We
don't understand why we're the object of this warning. On a
Europe-wide comparison, out of 15 countries we're among the five
with the cheapest prices." The spokesperson added that "the
Commission should raise the issue with the German regulator RegTP
rather than with Deutsche Telekom given that it was the regulator
who set out the pricing."

This new step by the Commission might influence
the already tense relations between the Commission and Germany
following incidents on e.g. the takeover Directive. The Commission
has also launched investigations against Dutch operator KPN and
France Telecom's internet subsidiary Wanadoo.

 

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