A number of decisions issued by the Cyprus Commission for the Protection of Competition in the telecommunications sector have been recently endorsed by the Cyprus Supreme Courts as correct and lawful in all respects.
On 6 September 2023 the Supreme Constitutional Court issued its decision in Appeal No. 60/2016, dismissing the appeal of the Cyprus Telecommunications Authority (CYTA) and upholding the earlier decision of the Administrative Court on 25 July 2016, which had previously dismissed all grounds for annulment and confirmed the decision of the Cyprus Commission for the Protection of Competition in 2012. With its decision dated 8 October 2012, the Cyprus Commission for the Protection of Competition had unanimously decided that there was a violation of Article 6(1)(b) of the Cyprus law on the Protection of Competition No. 13(I)/2008 by CYTA as a result of its refusal to provide direct access to its Short Message Service Center (SMSC), along with all related services necessary for the complainant to offer Premium SMS (Short Message Service) value-added services, either by charging for message sending (mobile origination) or by charging for message receipt/termination (mobile termination), to CYTA's subscribers. The subject of the case was the complaint filed by the company THUNDERWORX (now PRIMETEL PLC) against CYTA for abusive exploitation of CYTA's dominant position in the provision of the necessary infrastructure and services to enable the provision of Premium SMS to consumers by independent providers, in violation of Article 6 of the Competition Protection Law 207(I)/1989, as it was at the time. The violations covered the period from June 26, 2002, when the provision of the facility was initially requested, until June 2005, when an agreement was signed between CYTA and the complainant for the provision of the facility. As a result of the established violation of Article 6(1)(b) of the Law, the Commission imposed a fine of €130,000 on CYTA.
In its decision, the Supreme Constitutional Court rejected arguments of CYTA to the effect that the Cyprus Commission for the Protection of Competition did not have the authority to impose fines after the lapse of 5 years. Citing previous case law (Pfizer v EAC, Case no. 89/2016), the Supreme Constitutional Court noted, in agreement with the court of first instance, that the period during which the case was pending before the Court was correctly regarded, for the purposes of determining the time, as suspending the limitation period. Regarding the ground of appeal that there was lack of due investigation, the Supreme Constitutional Court noted that the Cyprus Commission for the Protection of Competition thoroughly examined all parameters related to the matter before it and accepted that the contested decision was taken in accordance with applicable law and the facts covered by the complaint. Finally, the Supreme Constitutional Court rejected the appeal ground that the imposed fine on CYTA in the amount of €130,000 was illegal or excessive, noting that it was rightly found at first instance that all relevant factors were taken into account by the Commission, which has the power to impose a fine of up to 10% of CYTA's turnover.
In late 2022, another decision was issued by the Cyprus Supreme Court in the Revision Appeal no. 129/2015, which again rejected the appeal filed by CYTA and endorsed the earlier decision of the Administrative Court which rejected all the grounds for annulment and confirmed the decision of the Cyprus Commission for the Protection of Competition No.48/2012. With its decision dated 8 October 2012, the Cyprus Commission for the Protection of Competition had unanimously decided that the acts and/or omissions of CYTA and in particular the refusal of CYTA to provide direct access to the SMS Center, along with all the related services that are necessary for an electronic communications provider to be able to offer premium SMS services with the charge to be made at mobile termination, to CYTA subscribers, prevented its competitors from offering the services offered by CYTA itself through Cybee, including subscription services, and therefore placed them in a position of competitive disadvantage, in violation of articles 6(1)(b) and 6(1)(c) of the law on the Protection of Competition L.13(I)/2008. The infringements concerned the period from August 2005, when Thunderworx Ltd had requested in writing the termination of short value-added messages by charging the message at mobile termination, until 2010, when CYTA notified the technical solution for the provision of the requested service to the interested companies. As a result of the established infringements, the Commission imposed a fine on CYTA amounting to €960,000.
In its decision, the Supreme Court of Cyprus took the view that the approach of the Administrative Court of first instance was solid and the steps taken by the Cyprus Commission for the Protection of Competition fulfilled its duty to protect the free exercise of competition. Regarding the time limits for the imposition of administrative fines (limitation period), the Court clarified that the time limit does not count from the date of submission of the complaint but from the day on which the infringement was terminated. Moreover, the Supreme Court, regarding the ground of appeal for lack of proper investigation, observed that the burden of proving a mistake on the facts or failure to conduct a proper investigation on the part of the administration, lies on the shoulders of the applicant, who has an obligation, by providing sufficient evidence, to undermine the presumption of legality that surrounds every administrative act. In exercising its power of revision, the Court confines itself to reviewing the legality of the contested administrative act, with the power to annul it. The facts of the case revealed that the Cyprus Commission for the Protection of Competition examined with great care all the facts of the case, submitted its reasoning and explained in detail the reasons why it rejected the allegations of CYTA. Therefore, its decision was taken in accordance with the law and was reasonably permissible.
The above decisions clearly demonstrate the willingness of the Cyprus Commission for the Protection of Competition to examine violations of competition law by governmental authorities. Furthermore, they reveal the deficiencies observed in the Cyprus telecoms industry when the market was liberalised in 2004 and the delays that occurred for CYTA to ensure that its conduct was aligned with competition law principles. This conduct in the telecoms market (and potentially in other sectors and industries where markets are liberalised) may give rise to compensation claims from aggrieved parties and, to that end, Cyprus has already enacted in 2017 the law on Compensation Claims for Infringements of Competition Law, which brings Cyprus law in alignment with the provisions of the EU Directive on certain rules governing actions for damages under national law for infringements of the competition law provisions of the Member States and of the European Union (Directive 2014/104/EU). Such claims are rare up to date in the Cyprus legal order and, indeed, it will be interesting to observe the approach of Cyprus Courts in compensation claims of this nature.
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