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CNMC fines Telefonica EUR 26 mln for 'restrictive' contracts
2014-11-05 10:07:00| Telecompaper Headlines
(Telecompaper) Spain's telecoms regulator CNMC has fined Telefonica a total of EUR 25.78 million for practices that limit the ability of its business customers to switch operators and change contracts. Telefonica is accused of including permanence clauses in its SME contracts that were automatically renewed and also included penalties that became increasingly higher as contract expiry date approached. The CNMC described the practice as anti-competitive in that it served to "disproportionately" limit the capacity of Telefonica's mobile customers to change operators. In addition, Telefonica's actions "substantially increased the costs that competitors had to incur to gain customers at the expense of Telefonica," said the CNMC in its decision. The regulator added that the fine reflected the fact that the permanence clauses had been in place since 2006, excluding other operators from the business segment of the mobile services market, which accounted for over 70 percent of Telefonica's revenues in the SME division in 2012. Telefonica has reacted "with perplexity" at the CNMC's decision, according to business daily Expansion, and will proceed to immediately lodge an appeal on grounds that the decision is clearly discriminatory against Telefonica, in that it ignores identical practices of other operators in the Spanish market.
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Category:Telecommunications