Telefonica’s appeal against antitrust fine slapped down

30 Mar 2012

Spanish telecoms giant Telefonica has lost its appeal against a EUR152 million (USD202 million) antitrust fine which was handed down to its domestic fixed line unit by European Union (EU) regulators back in 2007, Bloomberg reports.

As noted in TeleGeography’s GlobalComms Database, in June 2006 the Comision del Mercado de las Telecomunicacinoes (CMT) announced its intention to lower the country’s broadband internet access prices, arguing that they were approximately 25% higher than the European norm. Amid claims that wholesale prices charged by fixed line incumbent Telefonica de Espana for local loop unbundled (LLU) connections compared unfavourably with ‘prices as low as EUR15 to EUR20 in some European countries’, arguments over the matter rumbled on until, in June 2007 it was confirmed that Telefonica had been fined EUR151.9 million for abusing its dominance in the provision of broadband internet access. The European Commission (EC) accused the telco of charging wholesale rates that were too close to retail prices, preventing rival internet service providers (ISPs) from making a profit. Telefonica appealed the penalty on the grounds of economic and judicial errors in September 2007.

In the latest development the EU’s General Court is understood to have rejected Telefonica’s appeal, asserting that the EC ‘rightly held that Telefonica had abused its dominant position’, while the court also backed the CMT’s view that deliberately overpricing wholesale services with a view to hindering rivals was a form of monopoly abuse.

On the back of this latest decision Telefonica, for its part, has said it intends to appeal the ruling to the region’s apex tribunal, noting that it is in ‘complete and profound disagreement’ with the judgement. The report cites an e-mailed statement from the Spanish company, in which it claims to have ‘scrupulously abided by the telecommunications regulations imposed’ by Spanish regulators.