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Apr. 11, 2008

Yesterday, a European Union court categorically rejected Deutsche Telekom’s appeal of a $20 million fine imposed by the European Commission for overcharging rivals for use of its network between 1998 and 2002.

In its decision, the Court of First Instance said: “By charging its competitors prices higher than the ongoing prices which it charged its own end users, Deutsche Telekom largely abused its dominant market position.”

In a statement, the commission also said that Deutsche Telekom deprived consumers of the benefits of choice and price competition for more than five years.

More than five years ago, the European Commission said that fees set by Germany’s regulators were to high and that Deutsche Telekom needed to reduce its fees so smaller rivals could compete in the wireless market.

Even after some fee cuts, competitors were still charged more than consumers in about 85 percent of the cases analyzed.

For its part, Deutsche Telekom said it wasn't to blame as regulators set the fee prices, but the court ruled that the company “still did not use the discretion which it had during the period in reducing the margin squeeze or even to end it entirely.”

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Source: The European Court of First Instance.