Telecom loses appeal

NZ Herald

Telecom’s long lasting battle against their breaches and fines under the Commerce Act has failed:

Telecom has lost an appeal against a court ruling that resulted in it being hit with a $12 million penalty for using its market dominance to kneecap competitors a decade ago.

In 2009, the High Court upheld a Commerce Commission complaint that Telecom used its dominant market power to deter competitors in the wholesale and retail market for high-speed data services between 2001 and 2004.

The legal action, which began in 2004, focused on Telecom’s pricing of “data tails” – the Telecom-owned connection between a customer and the competitor’s own network.

Telecom’s rivals relied on buying access to these data tails to serve customers in mainly provincial areas where it wasn’t cost effective to copy Telecom’s network.

The High Court judgment found Telecom’s high wholesale prices for data tails shut its rivals out of the associated retail market and deterred them from offering competing wholesale services.

As such, Telecom had breached section 36 of the Commerce Act.

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