Wednesday, July 4, 2007

European Commission fines Telefónica over EUR 151 million

The European Commission has fined Telefónica over EU 151 million for abuse of its dominant position in the Spanish broadband market over the past five years. The EC said Telefónica imposed unfair prices in the form of a margin squeeze between the wholesale prices it charged to competitors and the retail prices it charged to its own customers. In so doing, Telefónica weakened its competitors, making their continued presence and growth difficult: competitors were forced to make losses if they wanted to match Telefónica's retail prices.

With high wholesale costs and weakened retail competition on the broadband market, Spanish consumers pay 20% more than the EU-15 average for broadband access. The Spanish broadband penetration rate is 20% below EU-15 average, and its growth is nearly 30% below that of the EU-15.

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