European regulators are punishing Norway’s state-controlled telecoms giant Telenor with a hefty fine of NOK 1.2 billion (USD 125 million) for misusing its market dominance to put pressure on the profit margins of other operators. Telenor promptly announced Tuesday that it would appeal.
“We are very surprised over both the conclusion of ESA (the European Free Trade Association’s Surveillance Authority) and the size of the fine,” Petter-Børre Furberg, who heads Telenor’s operations in Norway, told state broadcaster NRK. Furberg claimed Telenor has “followed all laws and regulations” regarding competition and that the company strongly opposes the accusations against it.
The conflict between ESA and the now multi-national Telenor,which evolved from Norway’s former state telephone utility, has been going on for more than nearly eight years. The ESA has now concluded that Telenor misused its position in the wholesale market to price its services so that rivals would lose money by selling mobile broadband for portable computer use. The violations are alleged to have taken place from 2008 to 2012, when regulators first raided Telenor’s offices in Norway.
ESA declared in 2014 that there was reason to launch a thorough investigation and in 2016, it sent a warning to Telenor that it would undertake punitive action. Telenor, in which the Norwegian government still has a 54 percent stake, was given a chance to respond, leading to another warning last year and now, finally, the massive fine.
The European competition authority noted that the sheer size of the fine reflects how serious it views Telenor’s allegedly wrongful pricing over a long period of time. ESA’s verdict can also unleash a flood of compensation claims against Telenor from the competitors it allegedly dominated.
“This case involves things that happend many years ago, and the ESA started out with a very broad investigation,” Furberg told NRK, stressing that many of the charges were later set aside. Furberg downplayed ESA’s findings, claiming they involved “a small portion of the mobile phone market where they claim they defined a problem.”
The Telenor executive said details of ESA’s findings remained sketchy, but that Telenor would prepare an appeal to the EFTA court within the next two months.