Telefonica to be fined up to €150 million
Telefonica, Spain's largest telephone company and owners of O2 and broadband subsidiary Be in the UK, is to be fined up to €150 million for charging broadband access wholesale rates that are too close to retail prices.
The European Commission sent a statement of objections to Telefonica in February 2006 stating their wholesale rates charged to rival operators in Spain are so close to retail prices that other companies are effectively excluded from competition. Bloomberg sources advised that the fine would be between €100 and 150million. A Commission spokesman told Bloomberg the regulator will be making a ruling on an "abuse of dominant position" case tomorrow, but didn't specify the company involved.
At the time of the objections, Telefonica used a defence of regulation on wholesale and residential pricing by the Spanish government that restricted them from abusing their position.
Other similar cases have accrued complaints from the European Commission. Deustche Telekom had to cut its fees in March 2004 after accusations of blocking competition by charging wholesale prices higher than residential customers pay to use its network in Germany. France Telecom was also fined after it was discovered its prices for high-speed Internet were below the costs of providing it.
More details at Bloomberg.