Telefonica gets biggest fine in Spanish history

6 April 2004

MADRID – Telefónica, Spain’s telephone giant, was fined EUR 57 million Sunday for breaking laws governing competition.

The fine, which was imposed by the Competition Tribunal, was for “gravely affecting” competition in the fixed or non-mobile telephone business.

It is the biggest fine that has ever been handed out in Spain.

The legal action started after complaints from the Association of Telecommunications Companies (ASTEL) in December 2000.

It claimed Telefónica obstructed the choice of which telephone company to use.

Telefónica allowed its own clients to call other operators’ line from a ‘fixed’ or non-mobile telephone, without having to use a pre-code.

But other operators had to ask their clients to use a code to use their lines.

This measure denied fair competition in a market in which  Telefónica has the biggest stake.

The court found that Telefónica’s practice was “abusive”.

The court found that the conduct of Telefónica was “very serious” because it affected free trade in the market.

Telefónica has been ordered to send letters to all the other companies saying that the pre-codes which have to be used by consumers  do not affect the quality of service, the maintenance of the line, reception or the price of the service.

A Telefónica spokesman told EFE that Spain is the European country where there is the highest proportion of pre-codes for fixed telephones.

He added that the fine was “disproportionate” and said another court had initially fined the company EUR 8.4m last October for a separate matter but later reduced this to EUR 900,000 after an appeal.

[Copyright EFE with Expatica]

Subject: Spanish news