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

(Competition Telecommunications Decisions not to take any further action on complaints based on Article 86 EC Failure of the Commission to define a position on complaints based on Article 86 EC Actions for annulment Actions for failure to act Action which becomes devoid of purpose in the course of proceedings No need to adjudicate)

In Joined Cases T-433/03, T-434/03, T-367/04 and T-244/05,

Gibtelecom Ltd, established in Gibraltar, represented by M. Llamas, barrister, and B. O'Connor, solicitor,

applicant,

Commission of the European Communities, represented initially by F. Castillo de la Torre and A. Whelan, and subsequently by F. Castillo de la Torre, acting as Agents,

defendant,

ACTION for (i) annulment of the alleged decisions of the Commission of 17 October 2003, 5 July 2004 and 26 April 2005 not to take any further action in respect of two complaints calling on the Commission to act, on the basis of Article 86(3) EC, to put an end to infringements of Community law allegedly committed by the Kingdom of Spain, and (ii) a declaration under Article 232 EC that, by failing to define a position on the further action which it proposed to take with respect to certain aspects of one of those complaints, the Commission failed to fulfil its obligations under Community law,

composed of J. Azizi, President, E. Cremona and S. Frimodt Nielsen (Rapporteur), Judges,

Registrar: E. Coulon,

makes the following

Background to the dispute

1. The applicant, Gibtelecom Ltd ('Gibtelecom'), is an undertaking operating in the telecommunications sector in Gibraltar, where it has its registered office. It operates networks and offers fixed-line and mobile telephony services for national and international communications.
2. In October 2003, Gibtelecom took over from Gibraltar Telecommunications International Ltd ('Gibtel'), a company licensed by the Government of Gibraltar to operate international telecommunications, except in relation to calls from or to Spain, and a mobile telephony network.
3. Gibtel, for its part, had been acquired in September 2001 by Gibraltar Nynex Communications Ltd ('GNC'), the former operator licensed to operate the network infrastructures and to provide all fixed-line telephony services in Gibraltar, both for local calls and for calls from or to Spain.

Complaint concerning the impossibility of concluding roaming agreements with mobile telephony operators carrying out their activities in Spain

4. By letter of 14 May 1996, Gibtel filed a complaint with the Commission ('the complaint of 14 May 1996') under Article 3 of EEC Council Regulation No 17 of 6 February 1962, First regulation implementing Articles [81 EC] and [82 EC] (English Special Edition, 1959-62, p. 87).
5. That complaint was originally made against Telefónica de España SA ('Telefónica'), the longstanding telecommunications operator in Spain. Gibtel claimed, inter alia, that Telefónica was refusing to conclude a roaming agreement with Gibtel for mobile phone services. Because of that refusal, subscribers to Gibtel were unable to use their mobile phones in Spain. Gibtel maintained that Telefónica's conduct constituted an abuse of a dominant position, prohibited under Article 86 of the EC Treaty (now Article 82 EC), and a breach of the prohibition of discrimination on grounds of nationality laid down in Article 6 of the EC Treaty (now Article 12 EC).
6. At the end of 1996, the Commission's investigation of the complaint of 14 May 1996 revealed that, in refusing to sign roaming agreements with Gibtel, Telefónica was acting on instructions from the Spanish Government. By letter of 28 November 1996, sent to the Commission, the Kingdom of Spain admitted that it was preventing Spanish operators from recognising and using fixed-line or mobile telephone codes allocated by the International Telecommunications Union to Gibraltar ('the contested measure'). Where the international codes of a geographical area are not recognised, the result is that it is technically impossible to conclude roaming agreements with any of the mobile telephone operators in the area in question.
7. By letter of 21 February 1997, the Commission forwarded to Gibtel the information received from the Kingdom of Spain and inquired whether Gibtel wished to have the complaint of 14 May 1996 re-classified as a complaint, based on Article 90 of the EC Treaty (now Article 86 EC), against the Kingdom of Spain.
8. By letter of 11 March 1997, Gibtel told the Commission that it accepted the proposed re-classification and that it wished to maintain its complaint on that new basis. Gibtel also claimed that, as well as being in breach of Article 90 of the EC Treaty, read in conjunction with Articles 6 and 86 of the EC Treaty, respectively, the measure constituted an infringement of Article 90 of the EC Treaty, read in conjunction with Article 59 of the EC Treaty (now Article 49 EC).
9. The Commission reached a provisional position with regard to the complaint of 14 May 1996, which it communicated to the applicant by letter of 21 February 2003. In the statement setting out that provisional position, the Commission announced its intention to take no further action, on the ground that, in refusing to conclude a roaming agreement, Telefónica not be regarded as infringing either Article 82 EC or Article 10 EC, read in conjunction with Article 82 EC, such as to justify the initiation of infringement proceedings against the Kingdom of Spain.
10. The applicant, on being asked to submit its observations on the provisional position of 21 February 2003 within a period of four weeks, challenged that provisional position by letter of 21 March 2003.
11. By letter of 18 August 2003, Gibtelecom formally called upon the Commission, under Article 232 EC, to define its position with regard to the complaint of 14 May 1996.
12. By letter of 17 October 2003, the Commission informed the applicant of its decision not to take any further action with regard to the complaint of 14 May 1996.
13. In that letter, the Commission expressly defined its position with regard to the aspects of the complaint of 14 May 1996 relating to competition law, on the grounds set out in its provisional position of 21 February 2003 (see paragraph 9 above).
14. On the other hand, in relation to the alleged infringement of Articles 12 EC and 49 EC, the Commission told the applicant in the letter of 17 October 2003 that it was necessary to explain, in the fullest possible detail, to the 'Internal Market' Directorate General ('DG MARKT') the precise nature of any practical difficulty that the applicant continued to encounter in the course of its business dealings as a result of the conduct of the Kingdom of Spain or of requirements laid down by that Member State.

Complaint relating to the limiting of numbering resources

15. By letter of 31 October 1996 ('the complaint of 31 October 1996'), GNC filed a complaint with the Commission under Article 3 of Regulation No 17, against Telefónica, in which it alleged that Telefónica's refusal to recognise the international dialling code for Gibraltar was imposing restrictive conditions, contrary to Article 86 of the EC Treaty, on automatic international direct dial traffic, and on GNC's freedom to offer fixed-line telephony services in Gibraltar.
16. GNC claimed that Telefónica's refusal to recognise the automatic international dialling codes for Gibraltar had the effect, not only of hindering automatic direct dial traffic with Spain, but also of limiting the number of telephone numbers that could be assigned to fixed phones in Gibraltar.
17. In that regard, GNC pointed out that, in order to enable telephone communications with Spain to be established, it was compelled to apply the Spanish national numbering plan to Gibraltar, a certain quota of numbers from the neighbouring region of Cadiz being reserved to Gibraltar. Initially fixed at 20 000 numbers, that quota was raised to 30 000 in 1989. According to GNC, the quota of numbers thus assigned to Gibraltar had, since the middle of the 1990s, proved insufficient to meet demand.
18. The Commission, which was in possession of the information received from Telefónica in the course of the investigation of the complaint of 14 May 1996, obtained confirmation from the Kingdom of Spain, by letter of 28 November 1996 (see paragraph 6 above), that the conduct for which Telefónica was criticised came about as a result of the contested measure, and was in reality attributable to the Spanish Government.
19. By letter of 21 February 1997, the Commission sent GNC the information which it had obtained from the Kingdom of Spain and asked it whether it wished the complaint of 31 October 1996 to be re-classified as a complaint, based on Article 90 of the EC Treaty, against the Kingdom of Spain.
20. By letter of 7 March 1997, GNC informed the Commission that it accepted the proposed re-classification and that it wished to maintain its complaint on that new basis.
21. During the administrative procedure, GNC also claimed that, as well as being in breach of Article 86 EC, read in conjunction with Article 82 EC, the contested measure constituted an infringement of Article 86 EC read in conjunction with, (i) Articles 12 EC and 49 EC and, (ii) other provisions of secondary Community legislation.
22. By letter of 7 November 2003, the Commission communicated its provisional position on the complaint of 31 October 1996 to the applicant. The Commission intended to take no further action on that complaint, to the extent that it raised issues relating to competition, as it considered that no infringement had been established and that neither Article 82 EC taken alone, nor Article 82 EC read in conjunction with either Article 86 EC or Article 10 EC, constituted a sufficient legal basis for it to take action in that regard.
23. By letter of 5 December 2003, the applicant challenged the provisional position of 7 November 2003.
24. By letter of 5 July 2004, the Commission confirmed the position set out in its letter of 7 November 2003 and informed the applicant of its intention not to take any further action on the complaint of 31 October 1996 so far as the alleged infringement of Article 82 EC, read in conjunction with Article 86 EC, was concerned.
25. In its letter of 5 July 2004, the Commission also indicated to the applicant that the issue of the infringement of Articles 12 EC and 49 EC was still being investigated. Those issues were the subject of a letter sent to the applicant on 16 September 2004, in which the Commission stated that it did not have sufficient evidence to commence proceedings under Article 226 EC.
26. The Commission's position was challenged by the applicant in a letter of 18 October 2004. Gibtelecom maintained, inter alia, that the legal basis for the Commission's decision had to be Article 86 EC, not Article 226 EC.
27. By letter of 26 April 2005, the Commission confirmed, on all points, the position it had taken in its letter of 16 September 2004.

Procedure and forms of order sought

28. By four applications, filed at the Registry of the Court on 24 December 2003, 15 September 2004 and 1 July 2005, the applicant brought the present actions.
29. In each case, by separate document filed with the Registry of the Court on the same day as the application, the applicant submitted a request for measures of organisation of procedure pursuant to Article 65 of the Rules of Procedure of the Court of First Instance. The applicant requested the Court to order the Commission to produce 21 documents, which it specified, as well as 'any other relevant document'.
30. By document filed at the Registry of the Court on 16 December 2004, the Kingdom of Spain applied to intervene in Case T-367/04 in support of the Commission.
31. In each case, by separate documents filed with the Registry of the Court on 8 March 2004, 22 December 2004 and 16 September 2005, the Commission raised a preliminary plea of inadmissibility under Article 114 of the Rules of Procedure. The applicant lodged its observations on those pleas on 23 April 2004, 23 March 2005 and 7 November 2005.
32. By letter of 25 February 2005, in Cases T-433/03, T-434/03 et T-367/04, the Court of First Instance (Third Chamber) asked the parties for their views on the implications of the judgment of the Court of Justice of 22 February 2005 in Case C-141/02 P Commission v max.mobil [2005] ECR I-1283. The parties submitted their observations within the period prescribed for that purpose.
33. By letter lodged at the Registry of the Court on 4 December 2006 in each of the present cases, Gibtelecom informed the Court that the Governments of the Kingdom of Spain, the United Kingdom of Great Britain and Northern Ireland, and Gibraltar, had signed a series of tripartite agreements which were capable of resolving all matters to the satisfaction of Gibtelecom. Accordingly, Gibtelecom reserved the option of withdrawing its actions in the event of the effective implementation of those agreements.
34. By letter of 6 February 2008, the Court requested the parties to submit their observations on the possibility of joining the present cases and to communicate to the Court information in their possession regarding the implementation of the agreements referred to in paragraph 33 above. The parties presented their observations within the period prescribed for that purpose.
35. By order of the President of the Third Chamber of the Court of First Instance of 14 March 2008, Cases T-433/03, T-434/03, T-367/04 and T-244/05 were joined for the purposes of the procedure, in accordance with Article 50 of the Rules of Procedure.
36. By letter served on 17 March 2008, the Court requested the parties to state whether the actions still served a purpose within the meaning of Article 113 of the Rules of Procedure. The parties submitted their observations in that regard within the period prescribed for that purpose.
37. In Case T-433/03, Gibtelecom claims that the Court should:

reject the preliminary plea of inadmissibility or, in the alternative, reserve its decision for the final judgment;

annul the letter of 17 October 2003 in so far as it rejects the complaint of 14 May 1996 on the basis of Article 86 EC;

order the Commission to pay the costs.

38. In Case T-434/03, Gibtelecom claims that the Court should:

reject the preliminary plea of inadmissibility or, in the alternative, reserve its decision for the final judgment;

declare that the Commission was under a duty to define its position on the complaint of the 14 May 1996 in respect of the infringement of (i) Article 86(1) EC, read in conjunction with Article 12 EC, and (ii) Article 86(1) EC, read in conjunction with Article 49 EC;

declare that, by not defining its position within two months of the letter of formal notice sent to it on 18 August 2003, the Commission failed to fulfil its obligation to act;

call upon the Commission to act by adopting a decision on the action to be taken in respect of the complaint of 14 May 1996, in respect of the infringement of (i) Article 86(1) EC, read in conjunction with Article 12 EC, and (ii) Article 86(1) EC, read in conjunction with Article 49 EC;

in the alternative, annul the letter of 17 October 2003 in so far as it impliedly rejects the complaint of 14 May 1996, in respect of the infringement of (i) Article 86(1) EC, read in conjunction with Article 12 EC, and (ii) Article 86(1) EC, read in conjunction with Article 49 EC;

in any event, order the Commission to pay the costs.

39. In Case T-367/04, Gibtelecom claims that the Court should:

reject the preliminary plea of inadmissibility or, in the alternative, reserve its decision for the final judgment;

annul the letter of 5 July 2004;

order the Commission to pay the costs.

40. In Case T-244/05, Gibtelecom claims that the Court should:

reject the preliminary plea of inadmissibility or, in the alternative, reserve its decision for the final judgment;

annul the letter of 26 April 2005 in so far as it rejects the complaint brought on the basis of Article 86 EC, read in conjunction with Articles 12 EC and 49 EC, respectively;

order the Commission to pay the costs.

41. In each of the present cases, the Commission contends that the Court should dismiss the action as inadmissible and order the applicant to pay the costs.

Subject-matter of the proceedings

42. Under Article 113 of the Rules of Procedure, the Court of First Instance may at any time, of its own motion, after hearing the parties, decide whether there exists any absolute bar to proceeding with an action or declare that the action has become devoid of purpose and that there is no need to adjudicate on it. It follows from Article 114(3) of those Rules of Procedure that, unless the Court decides otherwise, the remainder of the proceedings is to be oral.
43. In the present case, the Court considers that it has sufficient information before it to decide the matter without further procedure.
44. It should be borne in mind, first, that the present actions have been brought following two complaints by which the applicant called on the Commission to exercise its powers under Article 86(3) EC to address appropriate directives or decisions to Member States in order to ensure the application of the provisions of Article 86 EC. It is apparent from the letters sent on 7 and 11 March 1997 by GNC and Gibtel, respectively, to the Commission (see paragraphs 8 and 20 above) that the applicant takes the view that both the impossibility of concluding roaming agreements, and the restriction of the number of fixed-line telephone numbers available to it, have their origins in the contested decision, and that the contested decision, which is attributable to the Kingdom of Spain, constitutes a breach of Community law.
45. However, in a letter filed on 4 December 2006 and lodged in each of the present cases, the applicant informed the Court of the signing of a series of tripartite agreements between the Governments of the Kingdom of Spain, the United Kingdom of Great Britain and Northern Ireland, and Gibraltar, which are capable of resolving all matters to the satisfaction of the applicant (see paragraph 33 above). Point 8 of the Communiqué drawn up following the Ministerial meeting of the forum of dialogue on Gibraltar, held in Cordoba (Spain) on 18 September 2006 a copy of which the applicant attached as an annex to that letter provided for, inter alia, the lifting of the contested measure and the recognition, by the Spanish telecommunications operators, of the international dialling codes for Gibraltar. Accordingly, Gibtelecom reserved the option, in the event of the effective implementation of those agreements, of withdrawing its actions.
46. In reply to the questions put to it by the Court, the applicant indicated, in essence, that the recognition by the Kingdom of Spain of the international dialling codes for Gibraltar was effective and complete. Further, according to the applicant, the lifting of the contested measure made it possible for the numbering plan for Gibraltar to be revised and for the quantity of numbers to be increased considerably. Lastly, the applicant informed the Court that it had been able to conclude roaming agreements with four Spanish mobile telephone operators.
47. The Court notes that, by reason of the change in circumstances in the course of the proceedings, of which the applicant has informed the Court, the applicant has obtained a satisfactory outcome, as, indeed, it acknowledged in its observations. The present actions have therefore become devoid of purpose, since the applicant can no longer demonstrate an interest in seeking the forms of order specified.
48. In those circumstances, without it being necessary to examine the Commission's preliminary pleas of inadmissibility, it is no longer necessary to adjudicate on the present actions (see, to that effect, order of the Court of First Instance in Case T-66/02 Institouto N. Avgerinopoulou and Others v Commission [2004] ECR II-855, paragraph 35).
49. In consequence, it is not necessary to rule on the applications for measures of organisation of procedure, or on the Kingdom of Spain's application to intervene in Case T-367/04 (see, to that effect, order in Case T-376/04 Polyelectrolyte Producers Group v Council and Commission [2005] ECR II-3007, paragraph 59, and order of 16 February 2007 in Case T-449/05 Dikigorikos Syllogos Ioanninon v Parliament and Council, not published in the ECR, paragraph 87).

Costs

50. Under Article 87(6) of the Rules of Procedure, where the case does not proceed to judgment, the costs are to be in the discretion of the Court.
51. Having regard to the fact that the applicant has obtained a satisfactory outcome, without it being possible to hold that the Commission has been unsuccessful, and to the overall circumstances of the case, it is appropriate that each party should bear its own costs.

On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber)

hereby orders:

1. There is no need to adjudicate on the actions;

2. There is no need to adjudicate on the Kingdom of Spain's application to intervene in Case T-367/04;

3.


4. Gibtelecom Ltd and the Commission shall each bear their own costs.

Luxembourg, 26 June 2008.

E. Coulon

J. Azizi

Registrar

President

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* Language of the case: English.