Telecom is appealing a ruling that saw it slapped with a
massive $12 million fine last year for breaching the Commerce
Act.
The High Court said Telecom took advantage of its dominant
market position between 2001 and 2004 to deter potential or
existing competitors.
The historic "data tails'' case stems from the introduction
of retail and wholesale pricing for data services.
Telecom heads to the Court of Appeal today to contest the
decision and the penalty.
The Commerce Commission, which brought the case against
Telecom, has filed a cross appeal.
In October 2009, the High Court ruled Telecom unlawfully used
its market power to charge smaller competitors
"disproportionately'' high prices for wholesale access to its
network, which prevented them from offering competitive
retail data services.
Justice Rodney Hansen said that Telecom's conduct was
"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),'' he said.
The $12 million penalty was the highest imposed under the
Commerce Act.
- Susie Nordqvist, The New Zealand Herald
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