Highest AntiTrust Penalty Against Telefonica

European Commission has commanded Telefonica, Spain’s telecommunications giant to pay Euro151.9 million (around USD206.5 million) over EU antitrust rules and regulations’ violation. Telefonica, the sixth largest service provider in the world is said to have monopolized the broadband service market by utilizing its advantageous position over its competitors.

The decision was made after accusation against Telefonica that it has set unreasonable high price on its broadband services since beginning in 2001. The effect is said to be huge that resulted in slow rollout of broadband Internet services in Spain, and subsequently affecting its economy growth as a whole. As compared to other Europe countries, Broadband rate in Spain is about 20 percent higher with penetration and growth of 20 to 30 percent slower. That could be the main reason that EU took action against Telefonica.

The fine is so far the highest against Telco companies after Microsoft antitrust penalty of Euro 280 million. It is expected to serve as a strong warning to other companies that may violate antitrust regulations and thus, the fine is more severe as compared to other antitrust sues against other Telcos previously. Some of the similar cases were Euro12.6 million and Euro10 million fines against Deutsche Telekom and France Telecom respectively.

Telefonica has argued that they are always in good act and complied with Spanish Telecommunication Market Commission’s regulations. And they would definitely appeal as they think this is “wholly unjustified and disproportionate” act against them!