U.S. Markets open in 6 hrs 40 mins

EU court cuts Deutsche Telekom antitrust fine by a third

By Foo Yun Chee

BRUSSELS (Reuters) - Europe's second-highest court on Thursday slashed an EU antitrust fine handed down to Deutsche Telekom four years ago by about a third to 19 million euros ($21.6 million), saying that EU regulators had erred in calculating the penalty.

Deutsche Telekom welcomed the decision but said it was not convinced by all aspects of the judgment and would consider appealing to the European Court of Justice, the highest court in the European Union.

Europe's largest telecoms provider and its Slovak Telekom unit were sanctioned by the European Commission in 2014 for squeezing out competitors by charging unfair wholesale prices in Slovakia.

The EU competition enforcer said the anti-competitive practice to shut out competitors from the Slovak market for broadband services lasted more than five years.

The two companies were given a joint fine of 38.84 million euros while Deutsche Telekom was also hit with an additional 31-million-euro penalty.

The companies subsequently challenged the EU decision at the Luxembourg-based General Court.

The Court said a parent company's liability can exceed that of the subsidiary if there are factors which reflect the former's conduct for which it is held liable.

However, in this case, what was at fault was the basis used by the Commission for assessing the additional fine.

"Deutsche Telekom's turnover is not capable of reflecting its individual conduct in the infringement at issue and ... it therefore could not serve as a basis for the calculation of an additional fine imposed on the latter," judges said.

They also cut the joint fine from 38.84 million euros to 38.06 million euros.

Deutsche Telekom said it viewed as problematic the court's finding that rulings in national competition cases can be treated as the basis for determining an anti-trust violation under European law.

Further, Deutsche Telekom said in a statement, that the court had failed to provide clarity regarding procedural errors on the part of the European Commission's economic analysis and calculation methods in the case.

The Commission may also appeal to the EU Court of Justice but only on points of law.


(Additional reporting by Douglas Busvine in Frankfurt; Editing by Adrian Croft and Kirsten Donovan)