France's competition authority slapped France Telecom (FT) Orange and Vivendi's SFR with a €183 million fine for deliberately distorting competition.
The competition authority judged that the operators acted in an anticompetitive manner from 2005 to 2008 after they launched services which allowed unlimited calls within France, but only if the customer was calling a subscriber on the same network, according to the Financial Times.
"The offers restrained competition ... they helped to lock up the market by attracting customers to the two biggest networks and keeping them in once they had made a choice," the competition authority said.
While FT Orange and SFR say they will launch appeals against the decision, both have been told to pay fines of €117.4 million and €65.7 million, respectively.
The competition authorities, which were acting on a complaint made by Bouygues Telecom in 2006, relates back to the period between 2005 and 2008 when FT Orange and SFR were ruled to have abused the dominant position they held in the market.
The authorities said the two key points seen as anticompetitive were: "By freezing the market in attracting consumers to the two biggest networks and locking them in once the choice was made," and secondly by "weakening the third operator, Bouygues Telecom, which had to respond by launching offers which greatly increased its costs," according to Les Echos.
"Bouygues Telecom felt especially aggrieved that this practice lasted several years," said Bruno Lasserre, competition authority's president, according to Le Figaro.
FT Orange and SFR will now have to offer customers that adopted these plans a no-penalty opt-out regardless of the terms of their contract. Bouygues Telecom has indicated that it might make a claim for damages in the civil courts, noting that the amount involved could be "very important."
In response to the competition authorities' fine, FT Orange said Bouygues Telecom had itself benefited for years from regulatory measures, including higher call termination fees, because of its smaller size and status as a new entrant operator at the time. "Orange will exercise its right to appeal in the courts," FT Orange told the Financial Times.
For more:
- see this Reuters article
- see this WSJ article (sub.req.)
- see this FT article (sub. req.)
- see this Les Echos article (translated via Google Translate)
- see this Le Figaro article (translated via Google Translate)
Related Articles:
Bouygues Telecom sues Free Mobile over smears and 'unfair competition'
Free Mobile ups ante in French mobile price war
SFR launches consumer-focused LTE, months ahead of French rivals
Vivendi: Changes in French political environment will curb Free Mobile
Report: SFR, Free Mobile discuss possible merger
SFR results hurt by domestic price war; Vivendi ducks break-up question
Rumour Mill: SFR faces €350M more in cost cuts by 2013