04 Oct

The Competition Tribunal dismissed a lawsuit by the National Corporation of Consumers and Users, Consumers Association (“Conadecus”), against Telefónica Móviles Chile S.A. (“Telefónica”), Claro Chile S.A (“Claro”) and Entel PCS Telecomunicaciones S.A (“Entel”), since it considered that the plaintiff did not submit clear and conclusive evidence to support its claim that the defendants participated in the 700 MHz public auction with the strategic goal of hoarding spectrum and endangering its effective and efficient use.
In its decision, the Tribunal first rejected the defenses based on the lack of legitimacy of the defendants and on the necessary joinder.
Then, it pointed out that it was not possible to affirm that the defendants, individually, hold a dominant position in the upstream market (in which access to the mobile network is negotiated), which may translate to a dominant position in the downstream market (commercialization at retail level of analog and digital mobile telecommunications services). Notwithstanding the above, given that the wholesale market has an oligopolistic nature and that the consequences derived from the use of spectrum which are relevant to competition must be analyzed in this forum, the Tribunal specifically studied the defendants’ conduct in order to determine its effects and if they were proven by the plaintiff.
The Tribunal stated that the Supreme Court ruling, of January 27, 2009, in proceeding 4797-08, and the Resolution No. 2/2005 did not impose a general limit to the amount of spectrum any economic agent may hold. Regardless, the Tribunal set forth that in order to incur in a hoarding conduct the existence of a previously established limit was not necessary.
Finally, it concluded that the conduct was not proven.