European Commission - Press release
Antitrust: Commission fines Telekomunikacja Polska S.A € 127 million for abuse of dominant position
Brussels, 22 June 2011 - The European Commission has imposed a fine of €127 554 194 on telecoms operator Telekomunikacja Polska S.A. (TP) for abusing its dominant position in the Polish market in breach of EU antitrust rules (Article 102 of the Treaty on the Functioning of the EU). As a dominant company TP is under an obligation to allow remunerated access to its network and wholesale broadband services in order to allow the effective entry of alternative operators on downstream broadband markets. But it consistently refused to do so or made it difficult for more than four years.
Commission Vice-President Joaquín Almunia said: "the Commission cannot allow the development of the Internet and of the digital economy to be put at risk by anticompetitive practices. This case shows our determination to ensure that dominant telecom operators do not systematically hinder competitors who can make a real difference in the market to the benefit of consumers and businesses".
In order to provide broadband Internet access to end-users, new market entrants (alternative operators) can either build an alternative access network, which is usually not economically viable, or use the network of the incumbent operator, in the present case Telekomunikacja Polska (TP). To use the incumbent's network, operators need to acquire wholesale broadband access products, namely wholesale broadband access and local loop unbundling. In Poland, these are exclusively provided by TP, on which alternative operators are dependent to compete on the retail market.
Extensive evidence gathered by the Commission shows that Telekomunikacja Polska deliberately sought to limit competition on the broadband markets in Poland by placing obstacles in the way of alternative operators.
From August 2005 until at least October 2009 TP engaged in practices which prevented or at least delayed the entry of competitors onto Polish broadband markets. Alternative operators encountered numerous difficulties to obtain access to TP's broadband wholesale products. For instance, TP proposed unreasonable conditions, delayed the negotiation processes, rejected orders in an unjustifiable manner and refused to provide reliable and accurate information to alternative operators.
Together, the above practices prevented alternative operators from competing effectively in the market and constituted an abuse of TP's dominant position on the Polish broadband market.
The Commission's antitrust decision requires TP to put an end to such conduct, in so far as it has not already done so, and not to engage in the same or equivalent practices in the future.
Telekomunikacja Polska’s total turnover in 2010 was € 3.9 billion (PLN 15.7 billion). The fine takes account of the duration and gravity of the infringement and has been calculated on the basis of the average value of TP's broadband sales between 2005 and 2009 in Poland.
For background information on antitrust rules and procedures see MEMO/11/444.
Poland has one of the lowest broadband penetration rates in Europe - in January 2010 it reached only 13%, significantly below the EU average of 24%.Consumers have also suffered from lower connection speeds: 66% of Internet access lines in Poland do not exceed the speed of 2Mbit/s compared to an EU average of just 15%. Finally, monthly prices per advertised Mbit/s were much higher than the prices in other Member States and the second highest in the OECD area.
Wholesale broadband access provides data transmission, on the basis of incumbents' networks to which alternative operators connect via interconnection points, so-called Service Access Nodes. This does not require much infrastructure investment on their side. With local loop unbundling, which requires more investments, the connection takes place closer to the end-user. Although local loop unbundling is more costly for alternative operators, it allows for broader control of the service with the ability to adjust it to the specific end-users' needs.
Action for damages
Any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the Court and Council Regulation 1/2003 both confirm that in cases before national courts, a Commission antitrust decision is binding proof that the behaviour took place and was illegal. Even though the Commission has fined the company concerned, damages may be awarded without these being reduced on account of the Commission fine.
The Commission considers that meritorious claims for damages should be aimed at compensating, in a fair way, the victims of an infringement for the harm done. More information on antitrust damages actions, including the public consultation and a citizens' summary, is available at: