Author Archives: Thomas Socash

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Facts of T-Mobile

            The case revolves around a meeting of the 5 leading Dutch mobile phone companies including T Mobile, Vodafone, and KPN, who controlled a largely oligopolistic market.  The allegations of anti-competitive behavior in the case centered on the exchange of information from one mobile company to the others regarding dealer remunerations.  These phone companies sold both prepaid and postpaid subscription plans to consumers through these dealers.  The dealers supplied the phones to consumers and were not considered to be agents of these phone companies.  To be clear, the relationship between these dealers and the phone companies would not be classified as an employee-employer relationship.  At this meeting, it was confirmed that one company shared their plans with the others to reduce their dealer remunerations, but unconfirmed was any reaction or degree of acknowledgement from the recipients of this information.  range 2After this exchange took place, the Dutch Competition Authority (NMa) was made known of this information exchange (classified as such because there is no record of an agreement between the companies in place) and brought suit against the mobile phone companies.  The NMa alleged a concerted practice had taken place, a charge the mobile companies denied.  After the case was taken to a higher Dutch Appeals Court, that court then referred the case to the European Court of Justice for some guidance on the issue of concerted practices.  The ECJ issued an interpretation of Article 81 (now 101) and the term concerted practice, which in their words results in any uncertainty being removed from the marketplace regarding future conduct on the market.  The uncertainty removed here is knowledge of

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the other phone companies of one company reducing their dealer remunerations.  Even though a reduced commission paid to dealers could possibly hurt a company’s sales by removing an incentive for dealers to sell that phone, there is still uncertainty removed from the marketplace, and other companies may use this new information to act accordingly in the market.  This goes against the European Community goals of a free, competitive market, and thus set the legal standard of what constitutes a concerted practice under

Article 81.