Telecom has been fined a record $12 million by the High Court in Auckland for anti-competitive practices.
The penalty is the highest imposed under the Commerce Act, which was amended in 2001 to increase the fines available for anti-competitive conduct.
The Commerce Commission today said the High Court fined the telco for breaching section 36 of the Commerce Act in the so-called "data tails" case.
In October 2009, the High Court determined that Telecom unlawfully used its market power to charge downstream competitors disproportionately high prices for wholesale access to its network from 2001 to 2004.
The move prevented other providers from offering retail end-to-end high-speed date services on a competitive basis.
Justice Rodney Hansen, in the court's penalty judgement issued today, said the effects of Telecom's conduct were injurious to competitors, brought significant benefits to Telecom and were damaging to the competitive process.
"The breach was the result of a deliberate strategy, apparently sanctioned at the highest levels of Telecom, to price data tails at a level that would preclude price competition between Telecom and other [telecommunications service providers]."
Justice Hansen said the penalty should reflect the size and financial circumstances of Telecom, and "give full effect to the new penalty regime and the overriding goal of deterrence".
Telecom has appealed the October 2009 judgment. A hearing in the Court of Appeal is scheduled to start in September.
