On 29 June, the Svea Court of Appeal ("Court of Appeal") overturned the ruling of the District Court of Stockholm ("District Court") and dismissed Yarps Services Network AB's claim against Telia Company AB ("Telia") concerning an alleged abuse of dominance. The alleged abuse of dominance was claimed to have taken place in April 2000 to January 2003 when customers started switching from dial-up internet to broadband. At the time Telia was a wholesale supplier of ADSL-services to Yarps but was also engaged in the retail market for the supply of ADSL- services through subsidiaries.
Yarps alleged that Telia had abused its dominant position by way of margin squeeze. Yarps claimed that Telia's retail prices were so low compared to the wholesale price it charged Yarps that Telia was unable to cover its costs and the margin between these prices became negative.
The District Court had ruled that Telia had abused its dominant position in the form of margin squeeze but dismissed Yarps' accusations of discrimination and refusal to supply. Yarps appealed the District Court's ruling to the Court of Appeal. The Court of Appeal compared the wholesale price with the retail price and found that Telia's margin had indeed been negative as regards sales to certain customers. However, the Court of Appeal ruled based on established EU decision practice, that margin squeeze is not an by-object infringement, meaning that it cannot as such be considered to be an abuse of dominance but additional anti-competitive effects resulting from the margin squeeze have to be shown. Since the customers that were given these low prices only composed 1/5 of the retail market and the conduct to place only for a period of 11 months, the Court of Appeal did not consider these actions to have an anti-competitive effect. Accordingly, even though the Court of Appeal concurred with the finding of the District Court that Telia held a dominant position at the relevant time, the Court of Appeal did not find Telia to have abused its dominant position. Accordingly, Yarps' appeal was dismissed.