Telefónica slapped with €67m anti-competitive fine from EU

Spanish communications giant Telefónica has been fined €66.8m by the European Commission for agreeing not to compete with Portugal Telecom, which was slapped with a lighter €12m penalty by Brussels officials. The two companies were found to be in breach of Article 101 of the Treaty on the Functioning of the European Union ( …

[Destroy All Monsters]

No bloody bullfight with ultragore so that politicians can complain? SOMETHING IS WRONG!

"Instead of competing with each other for offering clients the most advantageous conditions, as is expected in an open and competitive market, Telefónica and Portugal Telecom deliberately agreed to stay out of each other's home markets."

So you can now get fined for deciding to stay OUT of a market altogether? Next you will get fined for hiring someone, or not hiring someone, opening a business or closing a business. Can't wait...

[wowfood]

Re: No bloody bullfight with ultragore so that politicians can complain? SOMETHING IS WRONG!

So, it's anti-competative to push your product to the detreiment of others (google vs all)

it's anti-competative to NOT push your product against a competitor (telefonica / other)

So what isn't anti-competitive?

[Terry Barnes]

Hmm

It's anti-competitive to become so strong in a market that others can't enter. It's not illegal but will likely result in one competition authority or another proposing remedies. That's fine and I think most businesses would describe being too successful as a nice problem to have.

It's anti-competitive to reach agreement with another company to not compete or to match pricing or to pre-agree how a market will be divided between them. That's illegal and anyone doing it ends up in a whole lot of bother - as UK supermarkets discovered last year when some of them agreed to fix the costs of certain brands of cigarettes.

It's not anti-competitive to fairly compete for the business of customers. It's perfectly fine to not enter a market - but not if it's as a result of having agreed not to with a competitor.

Strangely the OPEC countries get to make such agreements and not face any legal action.

[Miguel 1]

Re: No bloody bullfight with ultragore so that politicians can complain? SOMETHING IS WRONG!

Yes, it is indeed anti-competitive to sign an AGREEMENT not to compete, by entering your competitor's home market. I don't think anyone will fine Telefónica or PT for offering telecom services in New Zealand, for example.

Is it so hard to understand?

[Jess--]

their biggest mistake was putting the agreement in writing. generally when you have 2 people providing the same service in different areas they will naturally avoid each others areas working on the "Don't stand on my toes and I won't stand on yours" rule.

[Terry Barnes]

Erm

Even if it's not put in writing, it's illegal. And why would you do it anyway? There's no "don't stand on my toes" rule - what you're describing is a cartel.