O2 appealed a decision of the Commission dated 16 July 2003 regarding a framework agreement ("the agreement") between O2 and T-Mobile.  This agreement concerned infrastructure sharing and national roaming for 3G mobile phones on the German market. 

The parties had asked the Commission to confirm that the framework agreement they had concluded did not fall within the scope of the rules on competition or, if it did, to grant them an exemption from those rules.  The Commission's decision found no grounds for action in relation to site sharing provisions between the parties and it further granted an exemption to the roaming provisions of the agreement.  O2 subsequently sought to have the provisions of the decision annulled which related to the exemption from competition rules.

In May this year, the Court granted O2's request and annulled the exemption granted by the Commission for the roaming provisions in so far as the exemption implied that the provisions fell within the scope of the rules on competition.  It found that the Commission had failed to fulfil its obligation to carry out an objective analysis of the competition situation in the absence of the agreement.  In particular:

1) The Commission should have considered whether, but for the agreement, O2 would have been present in the market; 

2) The Commission's general assessment that national roaming restricted competition was not based on any concrete evidence specific to the agreement;

3) The Commission failed to take account of amendments made to the agreement concerning roaming in urban areas (i.e. that roaming would last for a shorter period in urban areas); and

4) Lastly, the Commission failed to take account of the particular context resulting from the specific characteristics of the emerging market for 3G mobile telecoms.

The Court considered that it could not be ruled out that the roaming agreement actually stimulated competition by enabling smaller market players to compete with much larger operators in certain circumstances.  It found that O2's position in the 3G market would have been insecure and possibly jeopardised without the agreement. 

The Court therefore annulled the decision of the Commission in so far as it granted an exemption to the provisions of the agreement on roaming without first establishing that those provisions were anti-competitive in nature.

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