News Update Competition

31 March 2021

In its recent Slovak Telekom judgment, the Court of Justice of the European Union ("CJEU") clarified the division of competences between national competition authorities ("NCAs") and the European Commission ("Commission") and how this division interacts with the ne bis in idem principle.

In its preliminary judgment, the CJEU held that Slovak Telekom (''ST'') could both be held liable by the Commission for abusive conduct on one telecommunications market, while at the same time being subject to sanctions imposed by the Slovak competition authority for abusive conduct on a different telecommunications market.

Background and preliminary questions

In 2007, the Slovak competition authority found ST had abused its dominant position on the Slovak telecommunications market for telephone services and low-speed internet access services. ST charged below-cost prices to squeeze out competitors from 2005 until 2007. In parallel, the Commission initiated its own proceedings against ST in 2009. The Commission held that ST had also abused its dominant position in the Slovak telecommunications market for wholesale broadband access services by adopting a margin squeeze and refusal to supply from 2005 until 2010. Both infringements occurred in different, although related markets.

The Supreme Court of the Slovak Republic turned to the CJEU, as it had doubts about when NCAs lose their competence to apply the European competition law rules, and whether the decisions of both the Commission and Slovak competition authority were compatible with the ne bis in idem principle.

The CJEU judgment

The CJEU recalled that, pursuant to Article 11(6) of Regulation 1/2003, NCAs are relieved from their powers to apply Article 101 and/or Article 102 of the Treaty on the Functioning of the European Union ("TFEU'') if the Commission initiates proceedings to find an infringement. However, the NCA's relieve of competences is limited to facts that are the subject to the Commission's proceedings. NCAs are relieved of their powers only as far as the Commission initiates proceedings against the i) same undertaking, ii) for the same allegedly anti-competitive practices, iii) occurring on the same product and geographical market and iv) during the same period.

In this case, where both proceedings concerned abusive conduct on separate product markets, the CJEU found that the Slovak competition authority was not relieved of its competence due to the initiation of the proceedings by the Commission.

This finding is in line with the purpose of Article 11(6) of Regulation 1/2003, namely, to provide close cooperation between the Commission and NCAs and to prevent contradictory decisions and double jeopardy in the same case. This risk does not exist when cases are not identical, as in the Slovak Telekom situation.

As for the principle of ne bis in idem, the Court reaffirmed its Toshiba judgment and recalled that the 'idem' condition is subject to three criteria: the i) facts, ii) offender and iii) legal interest protected must all be the same. As the decisions of the Commission and Slovak competition authority related to separate markets, the ne bis in idem principle did not apply in this case. Moreover, the Court noted that this principle would still not apply even if the proceedings concerned similar markets because the competition authority would then have been relieved from its competences.

Final observations

The Slovak Telekom judgment clarifies two interesting points, namely:

1. Cases concerning different markets cannot be considered similar. Therefore, NCAs retain their competences to apply the (EU) competition rules even if the Commission starts its own proceedings. This aspect underlines the importance of the definition of the (product) market to establish whether an NCA is relieved of its competences to apply Article 101 or Article 102 TFEU.
2. When the relevant conditions are satisfied, the ne bis in idem principle can be success-fully invoked. In this situation, undertakings may rely on Article 11(6) of Regulation 1/2003 if an NCA continues its own proceedings when the Commission decides to open an investigation. By taking these aspects into account, undertakings have a better chance of substantiating a successful defence and avoiding double penalties for the same infringement.