Hi colleagues:

Below are finding from law firm:

RIPE NCC qualifies as an association of undertakings in the sense of EU competition law. In view of its activities, such as the allocation and registration of Internet number resources, RIPE NCC itself may also be regarded as an undertaking under EU competition law. The same applies to the other four regional Internet registries (RIRs). It follows that RIPE NCC is obliged to act in line with EU competition law: 

• as an association of undertakings, it must comply with Article 101(1) of the Treaty on the Functioning of the European Union (TFEU), which prohibits decisions by associations of undertakings which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market of the European Union. This is also known as the cartel prohibition;
• as an undertaking, it must comply with Article 101(1) TFEU, which also prohibits agreements between undertakings which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the internal market of the European Union;
• as an undertaking, it must also comply with Article 102 TFEU, which prohibits the abuse of a dominant position within the internal market of the European Union.

As regards the applicability of this Article 102 TFEU to RIPE NCC, it is important to note that the current standard service agreement of RIPE NCC, as well as the proposed new model, in conjunction with the RIR Governance Document, grants RIPE NCC complete territorial exclusivity to allocate and register Internet number resources in its own service area. Consequently, RIPE NCC holds a monopoly in its service area and should therefore be considered subject to the prohibition of abuse of a dominant position as set out in Article 102 TFEU.

We have been advised by Loyens & Loeff that several restrictions in the current and the proposed service agreement of RIPE NCC and the RIR Governance Document may raise concerns under EU competition law, and could be contrary to the cartel prohibition and/or the prohibition of abuse of dominance.

Firstly, the allocation of exclusive territorial service areas to each of the five RIRs could possibly be interpreted as a market sharing agreement. In general, market sharing agreements are considered to constitute serious hard core infringements of the cartel prohibition. These types of agreements only very rarely escape the applicability of the cartel prohibition, and usually do not qualify for an exemption from this prohibition.

In addition, the current and the proposed service agreement of RIPE NCC excludes the portability of rights to number resources. The fact that these rights are not portable is likely to restrict potential competitors of RIPE NCC (both existing RIRs as well as companies desirous to become RIRs) to offer their services to users in RIPE NCC’s service area. Therefore, to the extent that the current and proposed regime does not allow for number portability, this could be regarded as a decision of an association of undertakings which is contrary to the cartel prohibition, as well as an abuse of RIPE NCC’s dominant position in its service area.

The consequences of an infringement of the cartel prohibition or of an abuse of a dominant position can be extremely severe. Perhaps most importantly:

• the European Commission may impose very high fines, which may go up to 10% of the worldwide annual group turnover;
• parties that have suffered damages as a result of the infringement of EU competition law, may ask for compensation of these damages in civil court proceedings.

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We hope the above is helpful. Happy to discuss.