On February 25, 2021, the Court of Justice held that the Commission and the Slovak competition authority did not infringe EU law when conducting two parallel investigations against Slovak Telekom.[1] Because the two investigations pertained to different product markets, regulators at the European and national level were entitled to proceed in parallel and eventually impose two distinct fines on Slovak Telekom.

Background

On April 8, 2009, the Commission launched an investigation against Slovak Telekom for abusing its dominant position in the Slovak market for broadband services (high-speed internet).[2]

The following day, the Slovak competition authority fined the same company €17.5 million for abusing its dominant position in the markets for retail telecommunications and wholesale interconnection (telephone services and low- speed internet).

Slovak Telekom challenged the national authority’s decision in national court. On appeal before the Slovak Supreme Court, the company argued that the initiation of an investigation at the European level should have prevented the national authority from fining the same company for the same conduct.

In particular, Slovak Telekom claimed the imposition of a fine by the national authority was in breach of Article 11(6) of Regulation 1/2003,[3] whose aim is to prevent conflicts of competence between the Commission and national authorities. According to this provision, “[t]he initiation by the Commission of proceedings for the adoption of a decision … shall relieve the competition authorities of the Member States of their competence to apply [EU antitrust rules].”

Slovak Telekom also claimed that the national authority’s decision infringed its rights of defense, as enshrined in Article 50 of the Charter of Fundamental Rights of the European Union. This provision reflects the fundamental principle of ne bis in idem, according to which no one should be tried or punished twice for the same offense.

On November 12, 2019, the Slovak Supreme Court stayed the appeal proceedings and requested the European Court of Justice to issue a preliminary ruling to clarify the correct interpretation of these two provisions.

Court of Justice clarifies rule on parallel proceedings and ne bis in idem principle

In its preliminary ruling, the Court of Justice recalled that, under Article 11(6) of Regulation 1/2003, a national competition authority loses its competence to investigate anticompetitive conduct under EU law if the Commission opens proceedings to examine the same conduct. But the Court of Justice clarified that the national authority is only relieved of its power insofar as the Commission brings proceedings against the same undertakings for the same alleged infringement on the same product and geographical markets during the same period.

While deferring to the Slovak Supreme Court for the final adjudication on this issue, the Court of Justice went on to find that the investigations conducted by the Commission and the national authority relate to infringements committed in different markets (respectively, the market for broadband services and the markets for retail telecommunications and wholesale interconnection). In light of this difference in scope, the Commission’s decision to open proceedings did not relieve the Slovak authority of its competence to conduct and conclude its own investigation against the same company.

Further, the Court of Justice confirmed that the ne bis in idem principle applies to antitrust infringements.[4] However, the principle does not preclude separate and independent investigations at the national and European level if those investigations relate to different product markets or geographical markets. Where the investigations related to the same markets, the principle of ne bis in idem would still not come into play because the decision of the national authority would be illegitimate under Article 11(6) of Regulation 1/2003 in the first place.

Implications

The judgment will likely impact the fate of other parallel investigations conducted both at the European and national level, including the ongoing abuse of dominance proceedings launched by the Commission and the Italian competition authority against Amazon.

In 2019, the Italian authority launched an investigation in relation to the online retailer’s “buy box”, the space at the top of a page that allows customers to make swifter and more direct purchases.[5] The following year, the Commission launched a similar investigation, but carved Italy out of the scope of its proceedings. Amazon brought a challenge before the General Court on January 19, 2021, claiming that in doing so the Commission unlawfully circumvented Article 11(6) of Regulation 1/2003.

In light of the Slovak Telekom judgment, the General Court may decide that Article 11(6) of Regulation 1/2003 does not apply in this case, because the two investigations against Amazon differ in geographic scope. At the same time, the judgment emphasizes that Article 11(6) seeks to ensure the “best possible” enforcement and to protect companies from parallel enforcement proceedings, which “cannot be at the expense of undertakings.”[6] There is concern that if the Commission were allowed to freely tailor the geographic scope of its proceedings to the benefit of national authorities’ ongoing investigations, this could cause a proliferation of parallel actions against the same companies and an inconsistent application of antitrust rules across Europe.[7]

[1]      Slovak Telekom a.s. v. Protimonopolný úrad Slovenskej republiky (Case C-857/19) EU:C:2021:139.

[2]      After a five-year investigation, the Commission eventually imposed a €38.8 million fine on Slovak Telekom and its parent company, Deutsche Telekom AG. See, Slovak Telekom (Case COMP/AT.39523), Commission decision of 15 October 2014. On appeal, the General Court upheld the Commission’s decision but reduced the fine. See, Deutsche Telekom v. Commission (Case T-827/14) EU:T:2018:930; Slovak Telekom v. Commission (Case T-851/14) EU:T:2018:929. Appeals before the Court of Justice are pending (Cases C-152/19 P and C-165/19 P, respectively).

[3]      Council Regulation (EC) No. 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, OJ 2003 L 1/18 (“Regulation 1/2003 EC”).

[4]      See, Toshiba Corporation and Others (Case C-17/10) EU:C:2012:72, para. 94.

[5]      Amazon – Buy Box (Case COMP/AT.40703), Opening of Proceedings Decision of 10 November 2020.

[6]      Slovak Telekom a.s. v. Protimonopolný úrad Slovenskej republiky (Case C-857/19) EU:C:2021:139, para. 32 (citing IBM v. Commission (Case 60/81) EU:C:1981:264, para. 18; Silgan Closures and Silgan Holdings v. Commission (Case C-418/19 P) EU:C:2020:43, para. 73).

[7]      See, Lewis Crofts, Comment: Amazon fight against EU probe faces new legal headwind from Slovak Telekom case, MLex Global Antitrust, February 25, 2021.