BUSINESS IN SHORT

Slovak Telekom fined

THE EUROPEAN Commission has fined Slovak Telekom (ST) and its parent company Deutsche Telekom €38.84 million for the abuse of their dominant position on the market. Deutsche Telekom (DT) also received an additional fine of €31.07 million to prevent recidivism. Thus the total fine of ST and Deutsche Telekom is almost €70 million.

THE EUROPEAN Commission has fined Slovak Telekom (ST) and its parent company Deutsche Telekom €38.84 million for the abuse of their dominant position on the market. Deutsche Telekom (DT) also received an additional fine of €31.07 million to prevent recidivism. Thus the total fine of ST and Deutsche Telekom is almost €70 million.

“After an in-depth investigation, the European Commission has imposed a fine of €38.838 million on Slovak Telekom and its parent company, Deutsche Telekom AG, for having pursued during more than five years an abusive strategy to shut out competitors from the Slovak market for broadband services, in breach of EU antitrust rules,” the press release of the European Commission (EC) read.
In particular, the EC concluded that Slovak Telekom, in which DT holds 51 percent, refused to supply unbundled access to its local loops to competitors, and imposed a margin squeeze on alternative operators. Deutsche Telekom, as a parent company with decisive influence, is also responsible for the conduct of its subsidiary; it is therefore jointly and severely liable for Slovak Telekom’s fine, according to the EC. Deutsche Telekom also received an additional fine of €31.07 million to ensure sufficient deterrence as well as to sanction its repeated abusive behaviour, as it had already been fined in 2003 for a margin squeeze in broadband markets in Germany.

ST has not said yet whether it will challenge the fine, as the company has not received the verdict yet. But the company denies that the fine would have any significant impacts on clients.

“We can assure clients that the current verdict of the European Commission will not have a negative influence either on quality or the price of provided services,” Martin Vidan, ST spokesperson said, as cited by the TASR newswire.

The fine has arrived in the time when Slovakia is attempting to sell its 49-percent share in ST. But the Economy Ministry does not expect that the fine would affect the sale of the share.

“We are convinced that this would not have any impacts on the process of the sale,” Miriam Žiaková, the spokesperson of the Economy Ministry as well as the National Property Fund (FNM) said, adding that since they have not received the verdict it is too early to assess impacts.

Originally the Economy Ministry estimated to get about one billion euros for the stake. Opinions whether the fine would change the price differ, as some indicate that the estimation already included the fine. Originally the fine was also expected to be higher as even a sum of €200 million for both ST and DT was mentioned, the Sme daily wrote.

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