On May 21 2015 the Competition Commission issued a press release in which it announced that the Cyprus Telecommunication Authority (CYTA) would be fined €1,016,425 for infringing Sections 6(1)(a) and 6(1)(b) of the Protection of Competition Laws 2008 to 2014.
The infringement was established during the examination of a complaint filed by PrimeTel Co Ltd. The complaint concerned a contract between CYTA and PrimeTel for the right of use of international capacity to the sub-sea sub-system called Minerva. The complaint involved the imposition of anti-competitive pricing for the aforementioned service by CYTA, which enjoyed a dominant position in the relevant market during the contested period.
The commission found that CYTA had infringed the Protection of Competition Laws by imposing unfair pricing. It was further stated that CYTA, as a government-owned organisation, had for a number of years functioned as a monopoly. As a result, it had been given the opportunity to develop international relations and invest in and create a significant international cable system. It was found that the fees that CYTA charged for the provision of the right of use of international capacity to the sub-sea sub-system had no sufficient relation to the real economic value of the service offered. As a result, CYTA was considered to have charged PrimeTel an unfair price, as the charges were deemed to be excessive according to Section 6(1)(a) of the Protection of Competition Laws.
The commission further noted that the acquisition of the rights of capacity usage in sub-sea services is necessary for the provision of telecommunication services; as a result of the excessive pricing, the charges in the retail market of electronic communications remained high, to the detriment of consumers.
The commission ordered CYTA to terminate the established infringement and avoid its repetition in future. Further, the commission held that an infringement of Section 6(1)(b) had been established as a result of CYTA's actions and/or omissions and/or refusal to accept payment in instalments for the debt owed for the operation and maintenance of the Minerva service for 2013. The commission found that the termination of services due to the refusal to accept payment in instalments resulted in long-term negative effects for consumers.
Regarding the imposition of the €1,016,425 fine, the commission considered the nature, gravity and duration of the infringement in determining this amount.
For further information on this topic please contact Pantelis Christofides at L Papaphilippou & Co LLC by telephone (+357 22 271000) or email ([email protected]). The L Papaphilippou & Co website can be accessed at www.papaphilippou.eu.
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