Poland - European Commission fined TPSA for abuse of a dominant position

[ec] 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.

Antitrust: Commission fines Telekomunikacja Polska S.A € 127 million for abuse of dominant position