TheNetherlandsTheDutchCompetitionAuthorityimposesheaviestcombinedfinetodateonDutchmobileoperators

31 March 2003

Pauline Kuipers




By decision of 30 December 2002, the Dutch competition authority (“NMa”) has imposed fines totalling €88 million on the five Dutch mobile phone operators Vodafone, KPN Mobile, Deutsche Telekom's subsidiary BEN, Orange’s subsidiary Dutchtone and mmo2's subsidiary O2 for agreeing "jointly and almost simultaneously" to reduce fees or commissions paid to dealers or retailers of mobile telephone subscriptions.

The NMa commenced its investigation in August 2001 following complaints by dealers. Retailers receive a so-called subscription fee from the operators when a consumer takes out a mobile telephone subscription. The retailer uses the fee to offer the consumer a mobile telephone, which is sold in combination with the subscription, at a lower price.

On 30 December 2002, the NMa took its final decision to the effect that an infringement has been committed. The NMa found that, in addition to agreeing to reduce fees on contract subscriptions, the operators have also exchanged market-sensitive information about pre-paid subscriptions. According to the NMa, the infringement is harmful to the consumer because by eliminating mutual competition between the various mobile operators the consumer has been confronted with more expensive mobile phone contracts, within a short time scale. The NMa had found that Vodafone and Ben were the instigators of the concerted practice, which resulted in increased fines for these companies.

The NMa has imposed fines totalling €88 million, the largest fines that it has imposed so far, on the five Dutch mobile phone operators Vodafone (€24 million), KPN Mobile (€31.3 million), BEN (€15.2 million), Dutchtone (€11.5 million) and O2 (€6 million). The operators are expected to file an administrative appeal against this decision.

Authors

Kuipers-Pauline

Pauline Kuipers

Managing Partner
Netherlands

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