Article – BusinessDesk

April 19 (BusinessDesk) – Telecom Corp. has been hit with a record $12 million fine for misusing its market power by charging rivals ‘disproportionately high prices’ for access to its network between 2001 and 2004.

High Court imposes record $12M fine on Telecom for misuse of market power

April 19 (BusinessDesk) – Telecom Corp. has been hit with a record $12 million fine for misusing its market power by charging rivals ‘disproportionately high prices’ for access to its network between 2001 and 2004.

In imposing the fine in the High Court at Auckland, Justice Rodney Hansen said Telecom’s conduct was “injurious to competitors, brought significant benefits to Telecom and were damaging to the competitive process.”

The breach of section 36 of the Commerce Act “was the result of a deliberate strategy, apparently sanctioned at the highest levels of Telecom, to price data tails at a level that would preclude price competition between Telecom” and other service providers, he said.

The fine is the highest imposed under the Commerce Act for anti-competitive conduct.

The fine stems from an October 2009 finding by the court that Telecom “unlawfully leveraged its market power to charge downstream competitors disproportionately high prices for wholesale access to its network, preventing them from offering retail end-to-end high-speed data services on a competitive basis,” according to a statement from the Commerce Commission today.

Telecom appealed the October 2009 judgment and that hearing is scheduled to start at the Court of Appeal in September. The appeal would also consider the fine imposed by the High Court if that is appealed in the interim, the commission said.

Shares of Telecom last traded unchanged at $2.065. They are rated ‘hold’ based on 11 recommendations compiled by Reuters.

(BusinessDesk)

Content Sourced from scoop.co.nz
Original url