Published on the 19/04/2011 | Written by Newsdesk
The High Court in Auckland has imposed a record $12 million penalty against Telecom for breaching section 36 of the Commerce Act in the so-called ‘data tails’ case…
The penalty is the highest imposed under the Commerce Act, which was amended in 2001 to increase the fines available for anti-competitive conduct.
Justice Rodney Hansen said that the exclusionary effects of Telecom’s conduct “were injurious to competitors, brought significant benefits to Telecom and were damaging to the competitive process.”
“The breach 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 telecommunications service providers”.
In October 2009 the High Court determined that from 2001 to 2004 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.
In justifying the size of the fine, Justice Hansen said that “the penalty should reflect the size and financial circumstances of Telecom and its position of influence and importance in the telecommunications industry. The goal of specific deterrence requires that the penalty take account of the size and resources of the contravening company.”
Telecom has appealed the October 2009 judgment finding that it breached section 36 of the Commerce Act.
