Lattelekom slapped with anti-trust fine

  • 2004-01-22
  • From wire reports
RIGA - The Latvian Competition Council has slapped a 500,000 lat (750,000 euro) fine on Lattelekom for abusing its dominant position on the fixed-line telecommunications market, while Lattelekom officials said on Jan. 16 that they would appeal the decision in court.The council levied the fine after investigating a claim filed by the telecommunications company Beta Com in March 2003 and concluding that Lattelekom abused its dominating position by offering discounts for ISDN service and outgoing phone calls for medium-sized business.

The council found that by offering deep discounts on Komforta ISDN - a service package for up to 24 users in one firm - as well as on aggregate monthly phone calls exceeding 78 lats, Lattelekom was preventing potential rivals from entering the market.
According to the council, by linking reductions in one service with the use of two other services in which the company has a near-monopolistic position, the company was selling different services that otherwise could be provided from various operators.
The competition watchdog also ruled that as of March 1 Lattelekom would no longer be allowed to offer reductions on ISDN lines and outgoing phone calls within the Komforta ISDN package.
"The current consequence of such actions on behalf of Lattelekom is the closing of the market, which has a bad effect on competition," stated the council. "These violations met the definition of malignant abuse of a dominating position in the competition law."
Beta Com (which is reportedly undergoing a change in name to Beta Telecom) is engaged in the sale and servicing of Alcatel office switchboards.
Lattelekom is 51 percent owned by the state of Latvia and 49 percent owned by Tilts Communica-tions, which is controlled by TeliaSonera.
Also, Lattelekom President and Chairman of the Council Gundars Strautmanis said last week he had not decided whether he would continue working at the post he has held for 10 years after his contract expires in May this year.
Strautmanis said that it was unclear whether he would even be offered the job, and his own decision will depend on whether the two owners - TeliaSonera and the government - put an end to the ongoing legal dispute by agreeing to a settlement.
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