Telenor judgment final – fine of NOK 788 million upheld

The Supreme Court’s Appeals Selection Committee has declined to review the appeal from Telenor. Thereby, the judgment of the Court of Appeal is final and the fine of NOK 788 million imposed on Telenor for abuse of a dominant position is upheld. – This is an important signal to Telenor and other companies with a dominant position, says Director General Lars Sørgard. 

In 2010, Telenor chose to change the conditions in its access agreement with Network Norway, which was in the process of rolling out a third mobile network in Norway. The new terms were deliberately designed to encourage Network Norway to invest less in its own infrastructure, and instead to continue renting access to Telenor’s network. At that time, the establishment of a third mobile network was a stated goal of the Norwegian authorities to ensure low prices for mobile customers. 

– The fact that the Competition Authority’s decision now is final, sends an important signal to Telenor and other companies with a dominant position. They have a special responsibility not to allow their conduct to impair genuine undistorted competition on the market, says Director General Lars Sørgard. 

The Norwegian Competition Authority adopted its decision in June 2018, the Competition Tribunal upheld the Competition Authority’s decision in June 2019, and in June this year the Gulating Court of Appeal upheld the Competition Authority’s decision. Telenor appealed the case to the Supreme Court, and on 26 November, the Supreme Court’s Appeals Selection Committee declined to review the appeal. 

– The Competition Authority welcomes the Supreme Court’s decision to reject the appeal. The Court of Appeal’s ruling, which upheld the Competition Authority’s decision, has thus become final. This confirms that a dominant company that limits a competitor’s opportunities to enter the market commits a serious violation of the Competition Act, says Legal Director Karin Stakkestad Laastad. 

 

The judgment of Gulating Court of Appeal (in Norwegian only) >> 

Public version of the Norwegian Competition Authority’s decision 

Public version of the Norwegian Competition Tribunal’ decision 

This is the case

Norway has been one of very few countries in Europe with only two mobile operators with their own nationwide mobile network, with Telenor as the dominant player. Mobile operators without their own network have to rent access to either Telenor’s or Telia’s network. Due to the lack of effective competition, the Norwegian mobile market is still regulated. Therefore, the development of a third mobile network in Norway was key to achieving increased competition in this market. In 2007, Network Norway started the construction of a third mobile network together with Tele2. During the rollout of the network, Network Norway bought access to Telenors’ network in the areas where the third mobile network did not yet have coverage. 

In 2010, Telenor changed the conditions in its network access agreement with Network Norway. It is in this regard that Telenor abused its dominant position. Through the new agreement, Telenor reduced the cost for the actual use of Telenor’s network, but at the same time introduced a fee that increased with the number of Network Norway’s end users. Network Norway had to continue to pay this fee even though it increased the use of its own network. 

Telenor’s amended rental terms reduced Network Norway’s incentives to continue the rollout of the third mobile network. Telenor consciously designed the conditions in the supplementary agreement in order to limit Network Norway’s further investment in the third network, and with the belief that the investments would be reduced.  

 

Timeline 

  • The Competition Authority carried out unannounced inspections at the premises of Telenor Norge AS and Telenor ASA from 4 to 13 December 2012. 
  • The suspected infringements concerned possible abuses of a dominant position in the Norwegian mobile communications market. 
  • The Competition Authority analysed substantial amounts of documents and data obtained during the inspections at Telenor’s premises, gathered information from other market players and conducted several interviews in the course of its investigation. 
  • The Competition Authority issued a Statement of Objections to Telenor on 23 November 2016 for two possible abuses of a dominant position in breach of Section 11 of the Competition Act and Article 54 of the EEA Agreement. 
  • After having received Telenor’s reply to the Statement of Objections, the Competition Authority decided not proceeded with one of the suspected abuses, which concerned Telenors’ use of exclusivity clauses in certain of its agreements. 
  • On 21 June 2018, the Competition Authority found that Telenor’s amendments of the pricing structure in the supplementary access agreement concluded with Network Norway constituted an abuse of dominance in violation of Section § 11 the Norwegian Competition Act and Article 54 of the EEA Agreement and imposed a fine of 788 million NOK on Telenor. 
  • Telenor appealed the decision of the Competition Authority before the Competition Tribunal on 20 December 2018. 
  • On 19 June 2019, the Competition Tribunal upheld the decision of the Competition Authority as well as the fine of 788 million NOK. 
  • On 18 September 2020, Telenor appealed the decision of the Competition Tribunal before Gulating Court of Appeal. 
  • On 24 June 2021, Gulating Court of Appeal handed down its judgment in the case. 
  • On 3 September 2021, Telenor appealed to the Supreme Court. 
  • On 26 November 2021, the Supreme Court’s Appeals Selection Committee declined to review the appeal. 
Legal Director, Karin Stakkestad Laastad.