Suspicious minds

The European Commission suspects Deutsche Telekom of charging anti-competitive tariffs for access to its local network.

After a careful investigation, the European Commission has sent Deutsche Telekom AG (DT) a statement of objections setting out the preliminary conclusion that the German incumbent telecommunications operator has abused its dominant position through unfair pricing regarding the provision of local access to its fixed telecommunications network (local loop).

The Commission is concerned about DT’s practice of charging new entrants higher fees for wholesale access to the local loop than those that DT’s subscribers pay for retail access. This discourages new companies from entering the market and reduces the choice of suppliers for consumers.

The Commission’s action stems from complaints by Mannesmann Arcor and local and regional carriers in Germany. It follows the sending of statements of objections to France Telecoms’s subsidiary Wanadoo, over predatory pricing for high speed Internet access services, and to Dutch incumbent KPN over the price charged to terminate calls on its mobile network.

DT now has two months to present arguments contesting the Commission’s preliminary analysis. The company may also expand on its arguments at an oral hearing.

Only after this has happened will the Commission adopt a final position. The Commission can use Article 82 of the EC Treaty to prohibit abuses of dominance if it so chooses.

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