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116 Mln Euros Fine For Telecom Italia For Abuse Of Its Broadband Market Dominant Position

116 Mln Euros Fine For Telecom Italia For Abuse Of Its Broadband Market Dominant Position
The former phone monopoly in Italy - Telecom Italia, had used its dominant position in the broadband market by trying to cause obstructions to the entry of rivals in the industry and these charges were found to be true by the competition regulator of Italy. The Italian watchdog has slapped the company with a fine of 116 million euros or $131 million for the abuse of the market.
Telecom Italia had conducted a "premeditated anti-competition strategy" which was aimed to cause roadblocks to the efforts of its rivals of investing in ultra-fast broadband, the Italian antitrust authority said in a statement while announcing the fine.
About three years ago, the Telecom Italia, headed by Chief Executive Flavio Cattaneo back then, had announced a plan called Cassiopea, of rolling out fast broadband in so-called uneconomic areas. It was back then that the Italian competition regulator had started an investigation against the company – specifically into the company’s superfast broadband rollout and wholesale pricing plans.
Telecom Italia had said initially that those areas where the company could not ensure a guarantee for return on its investment would be out of its purview of investment for the ultra fast internet and the construction of broadband services infrastructure. That forced the Italian government to issues state subsidised tenders.
However the company later altered its this strategy and said that it would make investment form its own money in some of those areas where it had formally refused to invest, arguing that they had changed their strategy because the market conditions had changed for the better.
The change in strategy for Telecom Italia was a result of the company losing out in the first of the tenders to Open Fiber - a broadband unit jointly owned by power utility Enel and the state lender Cassa Depositi e Prestiti.
The behaviors of the Telecom Italia to try and preserve its dominant market position was aimed at trying to stop competition from other operators, the Italian antitrust body said after completing the investigation.
"TIM (Telecom Italia) decided an unprofitable change of its coverage plans during the tenders and took legal initiatives aimed at delaying them," the regulator said in a statement.
It deemed the decision unwarranted and would appeal it, said TIM, which later put the Cassiopea project on hold, in a note.

Christopher J. Mitchell

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