Telkom has been fined R449-million by the Competition Tribunal, for abusing its dominance in telecommunications between 1999 and 2004.
The judgement was made in the case between the Competition Commission and Telkom, relating to Telkom’s conduct in the value-added services segment of the telecommunications market, with Telkom being the de jure monopoly provider of PSTS and facilities services until 2002, and the de facto monopoly provider until 2005.
“We have concluded that during the complaint period 1999 to December 2004, Telkom refused to supply essential facilities to independent VANS providers and induced their customers not to deal with them,” the Tribunal judgement reads.
“Telkom’s conduct resulted in a substantial lessening and prevention of competition in the VANS market. Telkom leveraged its upstream monopoly in the facilities market to advantage its own subsidiary in the competitive value added network market, which includes the provision of Internet and virtual private network services. Telkom’s conduct caused harm to both competitors and consumers alike and impeded competition and innovation in the dynamic VANS market.”
It adds that Telkom didn’t compete on merit but rather claimed that independent VANS were acting illegally and, by freezing their networks, impeded their growth and retarded innovation.
The Tribunal found Telkom guilty of contravening section 8(b) and 8(d)(i) of the Competition Act, and imposed an administrative penalty of R449-million.