On 22 January 2015, the Court of Justice of the European Union ("ECJ") issued its judgment in Case C-282/13, T-Mobile Austria v. Telekom-Control-Kommission, concerning whether competitors have a right under Directive 2002/21 on a common regulatory framework for electronic communications networks and services (the "Framework Directive") to appeal national level decisions implementing the allocation of wireless spectrum pursuant to merger control commitments.

In December 2012, the European Commission conditionally approved Hutchison Whampoa's purchase of Orange Austria, subject to the parties' commitments to divest parts of Orange's wireless spectrum (see VBB on Competition Law, Volume 2013 No. 1, available at www.vbb.com). The spectrum divestiture occurred through an auction managed by the Austrian Telekom-Control-Kommission ("TCK"), which ultimately granted the bulk of the spectrum to Telekom Austria and some to Hutchison's own Austrian subsidiary.

Competitor T-Mobile, which had participated as an interested third party in the Commission's merger control procedure, sought to challenge the TCK's spectrum allocation decision. However, the TCK contended that T-Mobile could not do so as it was not a party to the procedure and neither Austrian nor EU law required the TCK to grant party status to competitors who feared an adverse effect on their economic situation.

T-Mobile appealed to the Austrian Administrative Court, claiming that, because it qualified as an "undertaking affected by a decision", Article 4(1) of the Framework Directive guaranteed it a right to appeal the decision. The Administrative Court referred the question of T-Mobile's standing to the ECJ for a preliminary reference (see VBB on Competition Law, Volume 2014 No. 9, available at www.vbb.com).

The ECJ noted that the term "undertaking affected by a decision" was not directly defined in the Framework Directive, and that its interpretation should therefore consider the objectives pursued by the Directive and the need for judicial protection of rights that may be derived from the EU legal order. It further noted that one of the objectives of the Framework Directive was to promote competition in the electronic communications sector.

The ECJ held that an undertaking should be considered "affected" and therefore to have standing to appeal national decisions under the Framework Directive where: (i) they are a competitor of the addressee(s) of the national regulator's decision; (ii) the decision is adopted in a procedure intended to safeguard competition; and (iii) that decision is likely to have an impact on the undertaking's position on the market.

In this case, T-Mobile was a direct competitor of Hutchison and Orange. Furthermore, the relevant provisions of the directive governing the spectrum auction required the TCK to ensure that competition not be distorted, and the ECJ therefore considered that the spectrum allocation procedure was intended to safeguard competition. Finally, the ECJ noted that the auction would modify the respective spectrum shares of T-Mobile and its competitors, which would have an impact on T-Mobile's position on the market.

The ECJ therefore concluded that T-Mobile qualified as an affected undertaking and had a right to appeal the TCK's decision under the Framework Directive.

The ECJ's judgment could significantly increase legal uncertainty for companies agreeing to merger control remedies in the telecommunications sector. Spectrum divestitures are a frequent such remedy, but these divestitures will often be implemented in subsequent national-level procedures. The ECJ has now made clear that competitors will in many cases have standing to challenge the outcome of these procedures in court, potentially delaying and complicating the process of implementing the agreed remedies.

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