Telkom escapes big anti-competition fine on technicalities

24 Jun 2008

Telkom South Africa has avoided a ZAR3.7 billion (USD462 million) fine for anti-competitive practices in the broadband market, after the Pretoria High Court ruled that the Competition Commission cannot refer a complaint against the operator to the Competition Tribunal, reports South African newspaper Business Day. The case was launched in 2002 by ISPs and voice/data service providers which accused the South African former monopoly telco of using illegal tactics to stifle internet competition, including cross-subsidies, charging rivals more for bandwidth than it charged its own ISP division, and in some cases refusing to supply ISPs with any bandwidth at all.

Business Day writes that Telkom won on technicalities stemming from mistakes made by the Commission, which ruled in favour of the alternative ISPs and proposed the ZAR3.7 billion fine. The court did not rule on the crucial question of whether the competition authorities have the power to chastise Telkom for illegal operations, or whether that duty lies with the telecoms regulator, the Independent Communications Authority of South Africa (Icasa). Commissioner Shan Ramburuth said that an appeal would be lodged against the High Court’s decision, whilst the Commission would continue to investigate eleven outstanding complaints against Telkom from industry players. Ramburuth said the appeal would be on the grounds that the expert evidence it presented was not biased, as Telkom had claimed. Spokesperson for South Africa’s ISP Association, Ant Brooks, said that the delayed court case had had some positive effects in that the scrutiny of the incumbent fixed line operator had forced it to end some anti- competitive practices.

South Africa, Telkom South Africa