The Luxembourg Competition Authority finds the 'Integral' multi-product rebates scheme of Post Luxembourg to breach Article 102 TFEU

In the case 2014-FO-07, Télécommunication, the Luxembourg Competition Authority (LCA) examined a multi-product rebates scheme implemented by the former Luxembourg telecommunication monopolist, Post Luxembourg (PL). By its 'Integral' package PL committed to apply lower fares for clients that subscribed in the same time to its mobile telephony, fixed telephony and broadband Internet services altogether. The LCA found that such scheme breached Article 102 TFEU and the corresponding Article 5 of the Luxembourg Competition Act and imposed a Euro 2.5 million fine on PL.
The LCA followed the effects-based approach set out by the European Commission in its Guidelines on the application of Article 102 TFEU with regard to the tying and bundling practices. First, the LCA found two tying markets in the retail markets for access to fixed telephony and broadband Internet services, both dominated by PL, and a tied market in the more competitive retail market for mobile telephone services.
Second, the LCA addressed the question whether the PL conducts had foreclosing effects. In the 2006-2007 period, only PL offered an integrated package, while its competitors only proposed individual services. Therefore, as indicated in para. 59 of the Commission Guidelines, in this case multi-product rebates are anticompetitive if they are of such magnitude that equally efficient competitors cannot profitably compete offering a product in the bundle against the dominant firm offering such bundle. The LCA found that LP's competitors were not capable to fix their fares at such a low level to meet the LP's rebates. The 'Integral' bundled offer tied about 200,000 non-business clients, the majority of Luxembourg non-business clients, that were supplied by PL ground line telephony and broadband Internet services network-based.

Thereby, the LCA took the view that new alternative operators could not win away such non-business clients, due to the inability to replicate the PL integrated offers, and could only target less profitable customers. Then, the LCA concluded that PL leveraged its dominance in the fixed telephony and broadband Internet markets into the market for mobile telephony services, foreclosing the entry of new operators into such market.

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