40

• Slovenia: The Competition Protection Office fines Abuse of Dominant Position in Mobile Telecommunications MarketOn 13 February 2012, the Competition Protection Office of the Republic of Slovenia (CPO) issued a decision finding that Telekom Slovenije d.d. (previously Mobitel d.d., a subsidiary and separate legal entity of Telekom Slovenije d.d., now fully integrated in the Telekom Group) infringed, from November 2008 till July 2010, Article 9 of the Slovenian Competition Protection Act and Article 102 TFEU. The CPO found that Telekom Slovenije d.d. abused its dominant position with the purpose of strengthening or preserving its market power on an important part of the retail mobile telecommunications market by pricing its “Itak Džabest” package below costs.

According to the CPO’s investigation, it appeared that soon after the entrance of two new competitors in the mobile market and furthermore after the introduction in August 2008 of the retail package “Orto u nulo” by Mobitel’s biggest competitor Si.mobil, which was directed at the youth segment (age 12-31), Mobitel’s market share fell every month as many end users migrated from Mobitel to other mobile operators. Consequently, in November 2008 Mobitel launched a new retail package of mobile services called “Itak Dzabest” dedicated to the same consumer segment as the above mentioned package “Orto u nulo”.

Because of the high market penetration, switching of subscribers between operators is the only manner for changing the market shares of competitors on the Slovenian market.

After an analysis of the costs for providing Mobitel’s package, the CPO found that the price charged by Mobitel d.d. for the bundle of services included in the “Itak Džabest” package was below its costs with a monthly margin per subscriber which was negative. The incremental revenues derived from this package were lower than the incremental costs incurred by the company Telekom Slovenia d.d. for providing the package to an average customer or the costs of an equally efficient competitor. Furthermore, it appeared to the CPO that an equally efficient operator would not have been able to compete without suffering unsustainable losses. It was obvious that with such an aggressive strategy Telekom Slovenije d.d. intended to exclude its competitors from the market.

Therefore, the CPO concluded that with the introduction of the retail package Itak Džabest in the market, Telekom Slovenije d.d. abused its dominant position in the retail market for mobile telecommunications services. Indeed, with such behaviour Telekom Slovenije d.d. foreclosed its competitors from the market during the period from November 2008 to July 2010.

See CPO decision of 13.2.2012