O2 (which is the trading name for Telefónica Europe plc) and T-Mobile made a ‘roaming’ agreement, designed to give O2 a foothold in the German market while it was building its own network.

In order to assess whether an agreement is compatible with the common market in the light of the prohibition laid down in Article 81(1) EC, it is necessary to examine the economic and legal context in which the agreement was concluded (Case 22/71 Béguelin Import [1971] ECR 949, paragraph 13), its object, its effects, and whether it affects intra-Community trade taking into account in particular the economic context in which the undertakings operate, the products or services covered by the agreement, and the structure of the market concerned and the actual conditions in which it functions (Case C‑399/93 Oude Littikhuis and Others [1995] ECR I‑4515, paragraph 10).

The examination required in the light of Article 81(1) EC consists essentially in taking account of the impact of the agreement on existing and potential competition (see, to that effect, Case C‑234/89 Delimitis [1991] ECR I‑935, paragraph 21) and the competition situation in the absence of the agreement (Société minière et technique at 249-250), those two factors being intrinsically linked.

It must be held that that assumption is not supported in the Decision by any analysis or justification showing that it is correct, a finding that, moreover, the defendant could only confirm at the hearing.

It is apparent from the considerations set out in the Decision in the analysis of the agreement in the light of the conditions laid down in Article 81(3)[1] EC as regards whether it was possible to grant an exemption that, even in the Commission’s view, it was unlikely that O2 would have been able, individually, without the agreement, to ensure from the outset better coverage, quality and transmission rates for 3G services, to roll out a network and launch 3G services rapidly, to penetrate the relevant wholesale and retail markets and therefore be an effective competitor (recitals 122 to 124, 126 and 135).

Such considerations, which imply some uncertainty concerning the competitive situation and, in particular, as regards O2’s position in the absence of the agreement, show that the presence of O2 on the 3G communications market could not be taken for granted, as the Commission had assumed, and that an examination in this respect was necessary not only for the purposes of granting an exemption but, prior to that, for the purposes of the economic analysis of the effects of the agreement on the competitive situation determining the applicability of Article 81 EC.