EC guns for Telefonica over 'abuse of power'
22 February 2006, MADRID – Phone company Telefónica stands accused of abusing its dominant position in the Spanish communications market to head off rival providers of broadband internet.
22 February 2006
MADRID – Phone company Telefónica stands accused of abusing its dominant position in the Spanish communications market to head off rival providers of broadband internet.
The European Commission's competition regulator has sent a statement of charges to the Spanish phone company and has given the company a month to respond, or seek a hearing, before it makes its verdict.
Telefónica, the third biggest telecoms group in the world, was privatised in the 1990s in stages and still controls 78 percent of the market of landlines in Spain.
It is suspected of charging rival internet broadband providers prices to use the infrastructure which are so high that the companies are effectively excluded from competing.
"Telefonica would have incurred substantial losses if it had had to pay the wholesale tariffs it has been imposing on its competitors," said the Commission.
The result of the alleged unfair trading could explain why retail broadband prices in Spain are well above the EU average.
The Commission also points out that Spain is behind its European peers in the development and implementation of alternative broadband infrastructure.
If the Commission finally rules against Telefónica, it could hand it a hefty fine, like the EUR 497 million penalty against Microsoft which was found guilty of abusing its dominant market position in March 2004.
The regulator can impose fines of up to 10 percent of a company's annual worldwide turnover.
On Wednesday, Telefónica said it had always acted "correctly" within the Spanish law.
[Copyright EFE with Expatica]
Subject: Spanish news