Telecom in court over alleged loyalty offer breach
By Pattrick Smellie Nov. 6 (BusinessWire)
- Telecom will face the Commerce Commission in the High
Court over its alleged breach of its operational separation
undertakings in a wholesale loyalty offer, the Commerce
Commission announced this morning. The action follows
findings in August by the Independent Oversight Group, which
Telecom is required to appoint to monitor its market
behaviour, that the country's largest telecommunications
company made "non-trivial" breaches in respect of a
wholesale loyalty offer which sparked complaints to the IOG
from competitors Vodafone NZ and Orcon's parent, Kordia
Ltd. Telecom faces fines of up to $10 million per breach
if the Commerce Commission wins the action. Kordia alleged
in its original complaint that Telecom had breached
requirements not to discriminate between service providers
under clauses 47 and 56 of the Separation Undertakings. In
a statement, the Commission also indicated that there has
been a lack of clarity about the meaning of "discrimination"
under clause 56 of the Undertakings. "The Commission
intends to provide Telecom and the industry further guidance
on Telecom's obligation not to discriminate." The loyalty
offer in question was first offered last December, to
Telecom customers that had 90% or more of their Auckland
business with the company. The offer has since been expanded
to cover other centres. Vodafone and Kordia said the
loyalty offer would prevent them from further unbundling
local exchanges and would kill off their wholesale
fixed-line
businesses. (BusinessWire)