Fastweb SpA [2022] EUECJ C-649/21

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(Appeal - Intervention - Competition - Concentrations - Decision declaring a concentration to be compatible with the internal market and the Agreement on the European Economic Area, subject to compliance with certain commitments - Undertaking operating on the markets concerned by the concentration - Interest in the result of the case - Admission to intervene)

APPEAL under the second paragraph of Article 57 of the Statute of the Court of Justice of the European Union, brought on 25 October 2021,

Fastweb SpA, established in Milan (Italy), represented by E. Cerchi, M. Merola, and F. Caliento, avvocati,

Iliad Italia SpA, established in Milan, represented by D. Fosselard and D. Waelbroeck, avocats,

European Commission, represented by G. Conte, J. Szczodrowski and by C. Sjödin, acting as Agents,

1 By its appeal, Fastweb SpA seeks to have set aside the order of the General Court of the European Union of 27 September 2021, Iliad Italia v Commission (T-692/20, not published, EU:T:2021:686; ‘the order under appeal’), by which the latter dismissed its application for leave to intervene in support of the form of order sought by Iliad Italia SpA, the applicant at first instance in Case T-692/20.

2 Article 2(3) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the EC Merger Regulation) (OJ 2004 L 24, p. 1), provides:

‘A concentration which would significantly impede effective competition, in the common market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, shall be declared incompatible with the common market.’

‘Where the Commission finds that a concentration fulfils the criterion defined in Article 2(3) …, it shall issue a decision declaring that the concentration is incompatible with the common market.’

4 The background to the dispute is set out in paragraphs 1 to 8 of the order under appeal. For the purposes of the present proceedings, it may be summarised as follows.

5 On 17 January 2020, the European Commission received a notification of a proposed concentration (‘the notified transaction’) by which Vodafone Europe BV and Telecom Italia SpA intended to combine their passive infrastructure business in Italy in a newly created joint venture named Infrastrutture Wireless Italiane SpA (‘INWIT’).

6 On 6 March 2020, the Commission, pursuant to Regulation No 139/2004, adopted Decision C(2020) 1573 final declaring the notified transaction compatible with the internal market and the EEA Agreement (Case COMP/M.9674 - Vodafone ITALIA/TIM/INWIT JV) (‘the contested decision’).

7 In the contested decision, the Commission first assessed the likely effects of the notified transaction. In that respect, the Commission, in the first place, considered that the notified transaction raised serious doubts as to its compatibility with the internal market due to non-coordinated vertical effects in the markets for the provision of mobile telecommunications services at retail and wholesale level. In the second place, the Commission did not exclude that the notified transaction could raise serious doubts as to its compatibility with the internal market due to non-coordinated vertical effects to the detriment of suppliers of retail and wholesale fixed wireless telecommunications services using fixed wireless access technology and non-coordinated horizontal effects relating to the provision of hosting services on passive infrastructure to mobile network operators, suppliers using fixed wireless access technology and to customers other than television and radio broadcasters.

8 In the second place, the Commission considered that the commitments offered by Vodafone Europe and Telecom Italia were such as to render the notified transaction compatible with the internal market and the Agreement on the European Economic Area (EEA) of 2 May 1992 (OJ 1994 L 1, p. 3). It concluded that the notified transaction, as modified following the commitments offered by the merging parties, would not significantly impede effective competition in the markets where competition concerns had been identified.

9 Therefore, the contested decision states that the notified transaction is compatible with the internal market and the EEA Agreement, subject to compliance by the merging parties with the conditions and obligations set out in the commitments annexed to the decision.

10 By application lodged at the Registry of the General Court on 18 November 2020, Iliad Italia brought an action for annulment of the contested decision.

11 By document lodged at the Registry of the General Court on 11 March 2021, Fastweb applied for leave to intervene in Case T-692/20 in support of the form of order sought by Iliad Italia.

12 By the order under appeal, the General Court rejected that application for leave to intervene.

13 The General Court stated, in the first place, in paragraph 24 of that order, that the contested decision was not addressed to Fastweb.

14 In the second place, the General Court held, in paragraph 33 of the order under appeal, that Fastweb had not provided evidence that it had to or should in fact subscribe to hosting services for its transmission equipment with INWIT and that it had thus failed to satisfy the burden of proof incumbent on it. In that regard, the General Court noted in particular, in paragraphs 26, 29 and 31 of that order, that it was clear from the contested decision and the Commission’s observations that Fastweb used alternatives to INWIT’s passive infrastructure and that it had not established that those alternatives were likely to prove insufficient to meet its needs or to be jeopardised by the failure of the partnership and cooperation set up between Fastweb and other operators.

15 The General Court stated, in paragraph 34 of that order that, in any event, if Fastweb’s observations were to be understood as meaning that a failure of that partnership or cooperation would imply that it would need INWIT’s hosting services, such a failure constituted a future and hypothetical event which was not such as to establish a direct and existing interest in the result of the case.

16 In the third place, the General Court held, in paragraph 36 of the order under appeal, that Fastweb had not shown that the conditions and obligations imposed on the parties to the concentration produced effects on its situation which were different from or additional to those which resulted from its partnership and cooperation with other operators.

- grant its application for leave to intervene in Case T-692/20 in support of the form of order sought by Iliad Italia, and

19 In support of its appeal, Fastweb puts forward two grounds, the first alleging erroneous reasoning and distortion of the facts and the second alleging errors of law in the application of Article 40 of the Statute of the Court of Justice of the European Union.

20 By its first ground of appeal, Fastweb submits that the order under appeal is vitiated by an erroneous statement of reasons and a distortion of the facts, in so far as, in that order, the General Court denied Fastweb the existence of an interest in the result of the case solely on the ground that it is currently using an alternative to INWIT’s passive infrastructure.

21 The only relevant question is whether the legal position or economic situation of Fastweb will be, or could be, altered if Iliad Italia’s application for annulment of the contested decision were granted. The General Court should therefore have ruled on the application for leave to intervene by assessing the consequences of annulment of the contested decision on Fastweb’s commercial activity. In doing so, it could not have avoided relying on ‘assumptions’ about the effect of the merger, in so far as any interest in the result of a merger case would necessarily be based on such ‘assumptions’.

22 In the present case, Fastweb’s interest in intervening is established, since the annulment of the contested decision would provide it with better competitive conditions, offering it access to INWIT’s hosting services in addition to or instead of those obtained through its partnership and cooperation. A partial annulment of the contested decision would provide Fastweb with access to a better range of INWIT’s sites, as well as greater clarity as to the characteristics of those sites and the procedures for accessing them.

23 The General Court thus overlooked essential elements of the dispute, in particular the fact that the absence of any alternative on the market to the sites currently used by INWIT would deprive it of bargaining power vis-à-vis its partners and would limit competition on the market.

24 Fastweb also argues that a number of additional facts should be taken into account, namely its participation in the administrative procedure before the Commission, its status as a new entrant market network operator, the transmission of information to the Commission as to the harm suffered as a result of the lack of access to INWIT’s sites and the similarity between its position and that of Iliad Italia.

25 The Commission contends that the first ground of appeal is inadmissible, arguing that Fastweb, first, calls into question the factual findings of the General Court without alleging or demonstrating a distortion of the facts and, secondly, produces facts which were not invoked before the General Court.

26 It is necessary, as a preliminary matter, to examine the Commission’s arguments challenging the admissibility of the first ground of appeal.

27 In that regard, it should be noted, first, that, according to the settled case-law of the Court of Justice, in accordance with the second subparagraph of Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, appeals are limited to questions of law, to the exclusion of any assessment of the facts. The General Court therefore has sole jurisdiction to assess the evidence. The assessment of that evidence does not therefore constitute, except in the case of its distortion, a question of law which is subject, as such, to review by the Court of Justice in the context of an appeal (see, to that effect, order of the Vice-President of the Court of 21 June 2016, Bundesverband der Pharmazeutischen Industrie v Allergopharma, C-157/16 P(I), not published, EU:C:2016:476, paragraph 9 and the case-law cited).

28 Although the presentation of certain aspects of the argument put forward by Fastweb in support of its first ground of appeal could, admittedly, lead it to be regarded as aiming in part to call into question the factual assessments made by the General Court, the fact remains that, by that ground, Fastweb essentially maintains that the General Court assessed the existence of its interest in the result of the case by relying on an erroneous criterion, based on the lack of actual or foreseeable recourse to the services of the parties to the concentration at issue, whereas it should have determined only whether its legal position or economic situation could, in the light of the foreseeable effects of that concentration on the competitive conditions affecting that company, be altered by the annulment of the contested decision.

29 Such a complaint falls within the jurisdiction of the court hearing the appeal, in so far as it relates to an error of law allegedly committed by the General Court, so that the first ground of appeal must be regarded as admissible in so far as it relates to that complaint.

30 Secondly, it is clear from the Court of Justice’s case-law that to allow a party to raise for the first time before the Court of Justice a plea which it did not raise before the General Court would be tantamount to allowing a party to put forward for the first time before the Court of Justice a plea in law which it did not raise before the General Court and would in effect allow that party to bring before the Court of Justice a wider case than that heard by the General Court. In an appeal, the Court of Justice’s jurisdiction is thus confined to review of the findings of law on the pleas argued at first instance before the General Court (order of the Vice-President of the Court of 13 November 2019, EDP España v Commission, C-536/19 P(I), not published, EU:C:2019:965, paragraph 22 and the case-law cited).

31 By arguing that the General Court wrongly failed to take account of the facts referred to in paragraph 24 of the present order, which had not in fact been raised at first instance, Fastweb is in reality putting before the Court of Justice a plea which was not raised before the General Court, alleging that its application for leave to intervene should have been allowed on the basis of those facts. The arguments based on those facts must therefore be rejected as inadmissible.

32 By contrast, contrary to what the Commission maintains, Fastweb’s arguments summarised in paragraphs 22 and 23 of the present order must be regarded as merely clarifying the relevance, for the purposes of assessing its interest in the result of the case, of the statement of that undertaking’s economic position, as set out in paragraph 7 of the application for leave to intervene before the General Court, and those arguments cannot therefore be dismissed as inadmissible.

33 As regards consideration of the merits of the first ground of appeal, it should be noted that it is apparent from paragraphs 25 to 34 of the order under appeal that the General Court took the view that Fastweb’s application for leave to intervene should have been granted only in so far as Fastweb had established, taking into account the current organisation of its business, that it had a current or future need for access to INWIT’s passive infrastructure and, consequently, that it must or should in fact subscribe to hosting services from INWIT.

34 In that regard, it should be noted that, in accordance with the second paragraph of Article 40 of the Statute of the Court of Justice of the European Union, any person may intervene before the Courts of the European Union if he or she can show an interest in the result of the case submitted to one of them.

35 According to the Court’s settled case-law, the concept of ‘interest in the result of the case’, within the meaning of the second paragraph of Article 40, must be defined with regard to the subject matter of the case and be understood as being a direct and existing interest in the ruling on the forms of order sought, and not as an interest in relation to the pleas in law or the arguments raised. The words ‘result of the case’ refer to the final decision sought, as set out in the operative part of the future judgment (order of the Vice-President of the Court of 24 June 2021, ratiopharm and Others v Commission, C-220/21 P(I), not published, EU:C:2021:521, paragraph 18 and the case-law cited).

36 It is necessary, in particular, to check that the applicant for leave to intervene is directly affected by the contested measure and that its interest in the result of the case is certain. In principle, an interest in the result of the case can be regarded as sufficiently direct only in so far as that result is such as to change the legal position of the applicant for leave to intervene (order of the Vice-President of the Court of 24 June 2021, ratiopharm and Others v Commission, C-220/21 P(I), not published, EU:C:2021:521, paragraph 19 and the case-law cited).

37 Furthermore, a distinction must be drawn between applicants for leave to intervene who have a direct interest in the outcome of the submissions made by the parties in the context of the dispute in which they wish to intervene and those who have only an indirect interest in the resolution of the dispute by reason of similarities between their situation and that of one of the parties (order of the Vice-President of the Court of 24 June 2021, ratiopharm and Others v Commission, C-220/21 P(I), not published, EU:C:2021:521, paragraph 20 and the case-law cited).

38 As regards more specifically the existence of such an interest in the field of competition law, it is important to stress that the provisions of the TFEU relating to the competition rules enshrine a right not to be subjected to distorted competition by measures contrary to Articles 101, 102 and 107 TFEU (see, to that effect, judgments of 6 November 2018, Scuola Elementare Maria Montessori v Commission, Commission v Scuola Elementare Maria Montessori and Commission v Ferracci, C-622/16 P to C-624/16 P, EU:C:2018:873, paragraph 43, and of 5 November 2019, ECB and Others v Trasta Komercbanka and Others, C-663/17 P, C-665/17 P and C-669/17 P, EU:C:2019:923, paragraph 112).

39 Therefore, it could be considered that an interest in the result of the case should be recognised on the part of the applicant for leave to intervene where the State aid scheme which is the subject of the dispute is likely to have direct and existing consequences on its economic situation, in particular where it cannot be ruled out that a project financed by means of such a scheme offers an alternative to the services offered by that applicant and is thus likely to have consequences for its activities (see, to that effect, order of the President of the Court of 22 October 2019, Scandlines Danmark and Scandlines Deutschland v Commission, C-174/19 P, not published, EU:C:2019:1096, paragraphs 9, 22 and 40).

40 Similarly, competitors of an undertaking to which a Commission decision imputed an abuse of a dominant position within the meaning of Article 102 TFEU, whose economic situation was altered by the conduct at issue, were able to have their interest in intervening recognised in support of claims seeking the dismissal of an action for annulment brought against the Commission’s decision (see, to that effect, orders of the President of the Court of 21 February 2008, Der Grüne Punkt - Duales System Deutschland v Commission, C-385/07 P, not published, EU:C:2008:114, paragraphs 9 and 10, and of 8 June 2012, Schenker v Deutsche Lufthansa and Others, C-602/11 P(I), not published, EU:C:2012:337, paragraphs 11 and 12).

41 It follows from Articles 2(3) and 8(3) of Regulation No 139/2004 that the Commission must declare incompatible with the internal market concentrations which would significantly impede effective competition within that market or a substantial part of it, in particular by creating or strengthening a dominant position.

42 In the light of those factors, an undertaking which is active in one or more markets identified by the Commission as capable of being affected by the likely anticompetitive effects of a concentration must, in principle, be regarded as having a direct and existing interest in the outcome of an appeal against the decision authorising that concentration, in so far as it cannot be ruled out, at a preliminary stage of the review procedure, that the authorisation of that concentration and, where appropriate, the conditions and obligations to which that authorisation is subject are likely to have an impact on the activities of that undertaking.

43 The fact that such an undertaking currently uses the services of an operator other than the parties to the concentration in question cannot make it possible to rule out the existence of such an interest, since, as Fastweb argues, the change in the competitive situation resulting from the notified transaction is likely, even in such a case, to influence the economic choices available to that undertaking and the negotiating power it has in organising its operations.

44 It follows that the General Court erred in law in holding that it was incumbent on Fastweb, in order to establish its interest in the result of Case T-692/20, to prove that it could not carry on its business using the infrastructure to which it currently had access on the basis of partnership and cooperation with other operators and, thus, that it had to, or should, in fact, subscribe to INWIT for hosting services for its transmission equipment.

46 That being so, since the operative part of the order under appeal is also based on a ground concerning the comparison between the conditions and obligations imposed by the contested decision, it is necessary to examine the second ground of appeal, which seeks to challenge that ground.

47 By its second ground of appeal, Fastweb claims that the General Court committed two errors of law in paragraph 36 of the order under appeal.

48 First, the General Court infringed the second paragraph of Article 40 of the Statute of the Court of Justice of the European Union by assessing the interest in the result of the case not in relation to the submissions made by Iliad Italia, but by basing its assessment on the analysis made by the Commission in the contested decision. The General Court could not therefore rule on the basis of allegedly erroneous assessments contained in that decision.

49 Secondly, the General Court wrongly compared Fastweb’s situation to that of other natural and legal persons by requiring it to show that the conditions and obligations imposed by the contested decision had specific effects on it.

50 The Commission submits that the second ground of appeal is based on an erroneous reading of the order under appeal, since the General Court did in fact assess Fastweb’s interest in the result of the case on the basis of the criteria resulting from the settled case-law of the Courts of the European Union.

51 Contrary to what the General Court held in paragraph 36 of the order under appeal, an undertaking active in one or more markets identified by the Commission as likely to be affected by the anticompetitive effects of a merger cannot be required to show that the effects on its situation of the conditions and obligations imposed on the parties to the merger differ from those resulting from its current relations with other operators.

52 As Fastweb argues, since the purpose of examining an action for annulment brought against a decision authorising a concentration is, inter alia, to assess the extent to which the conditions and obligations imposed by that decision are sufficient to exclude the occurrence of anticompetitive effects in the event of implementation of that concentration, an applicant for leave to intervene cannot be expected to demonstrate, at a preliminary stage of the proceedings, that those conditions and obligations are insufficient to avoid such effects.

53 Furthermore, the interest of an undertaking in the annulment of a decision authorising a concentration must, as is clear from paragraphs 42 and 43 of the present order, be assessed without giving decisive weight to the fact that that undertaking currently obtains its supplies from operators other than the parties to the concentration, and any comparison between the effects of the agreements concluded with those operators and the effects of the conditions and obligations imposed by that decision cannot, in any event, be decisive for the purposes of that assessment.

54 It follows that the second ground of appeal must be upheld and the order under appeal set aside.

55 According to the first paragraph of Article 61 of the Statute of the Court of Justice of the European Union, the Court of Justice may, where it has quashed the decision of the General Court, either itself give final judgment in the matter, where the state of the proceedings so permits, or refer the case back to the General Court for judgment.

56 In the present case, the Court has the necessary elements to give a final ruling on Fastweb’s application for leave to intervene.

57 In its application for leave to intervene, Fastweb argues that, as a provider of retail and wholesale mobile and fixed services, it is one of the operators that purchases hosting services on passive network infrastructure. As such, it argues that it should have access to INWIT’s sites and that it purchases hosting services on macro-sites from operators such as INWIT. As a result, it considers that an annulment of the contested decision would have a significant impact on its position.

58 As can be seen from paragraph 42 of the present order, such elements, the reality of which is attested to by the contested decision and is not in any way challenged by the Commission, are sufficient to establish that Fastweb has a direct and existing interest in the ruling on the forms of order sought by Iliad Italia for annulment of the contested decision, in so far as it is common ground that they establish that Fastweb is active on one or more of the markets which the Commission has identified as being liable to be affected by the likely anticompetitive effects of the notified transaction.

59 In those circumstances, and contrary to the Commission’s contention, Fastweb cannot be expected to establish more precisely how the notified transaction would be likely to change its position as a provider of fixed retail and wholesale services.

60 Furthermore, the Commission’s arguments to deny Fastweb’s interest in intervening on the grounds that it has not demonstrated that the partnership and cooperation in which Fastweb is currently engaged is likely to be jeopardised or that it was or would be purchasing hosting services from INWIT cannot undermine that conclusion, for the reasons set out in paragraph 43 of the present order.

61 Therefore, Fastweb’s application for leave to intervene in Case T-692/20 must be allowed.

62 As regards the costs incurred in the present appeal, under Article 184(2) of the Rules of Procedure of the Court of Justice, where an appeal is well founded and the Court itself gives final judgment in the case, the Court is to make a decision as to costs. Pursuant to Article 138(1) of the Rules of Procedure, which are applicable to the procedure on appeal by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings.

63 Since Fastweb has applied for costs and the Commission has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by Fastweb relating to the appeal.

64 As regards the costs relating to the application for leave to intervene, under Article 137 of the Rules of Procedure, also applicable to appeal proceedings by virtue of Article 184(1) thereof, a decision as to costs is to be given in the judgment or order which closes the proceedings.

65 In the present case, since Fastweb’s application for leave to intervene is granted, the costs relating to its intervention must be reserved.

1. The order of the General Court of the European Union of 27 September 2021, Iliad Italia v Commission (T-692/20, not published, EU:T:2021:686), is set aside.

2. Fastweb SpA is granted leave to intervene in Case T-692/20 in support of the form of order sought by Iliad Italia SpA.

3. The European Commission is ordered to bear its own costs and to pay those incurred by Fastweb SpA in the appeal proceedings.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Fastweb SpA [2022] EUECJ C-649/21_O (22 February 2022) URL: http://www.bailii.org/eu/cases/EUECJ/2022/C64921.html Cite as: ECLI:EU:C:2022:171, [2022] EUECJ C-649/21_O, EU:C:2022:171, [2022] 5 CMLR 3

Court of Justice of the European Communities (including Court of First Instance Decisions)