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Order subject to periodic penalty payments imposed on KPN for unlawful surcharges

12-03-2019

Dutch telecom provider KPN adds unlawful surcharges to rates for routing calls from other providers (call termination). These telecom providers thus pay KPN too much. That is why the Netherlands Authority for Consumers and Markets (ACM) has imposed an order subject to periodic penalty payments on KPN. This order amounts to EUR 100,000 per day, with a maximum of one million euros.

Henk Don, Member of the Board of ACM, explains: ‘An order subject to periodic penalty payments is one of the instruments that ACM can use when a company does not stick to the rules. In this particular case, we have chosen this instrument because we want KPN to adjust its conduct so that the telecom providers involved will no longer be harmed. Consumers will also indirectly benefit from this.’

Maximum rates

KPN charges a number of other telecom providers surcharges for call termination, which is the routing of calls from one provider to an end-user of KPN. ACM enforces maximum rates for call termination for both fixed and mobile telephony. KPN is of the opinion that it was legally allowed to levy a surcharge on top of this maximum rate. ACM rules that KPN must observe the maximum rates. That is why ACM forces KPN to charge the correct rates, both in the future as well as retroactively from 12 July 2017.

The rules

In 2017, ACM published its Market Analysis Decision on fixed and mobile call termination. In this decision, ACM sets, among other things, the maximum rates that telecom providers are allowed to charge each other for routing calls to each other’s users. The telecom provider of the individual being called requests a fee from the caller’s provider for the use of its network, the call termination rate. The caller cannot choose which provider handles their call. Each provider of this service thus has a monopoly on its own network. Without regulation, the rates for call termination could therefore become too high. That is the reason ACM sets maximum rates for both fixed and mobile telephony providers.

See also

12-03-2019 ACM imposes order subject to periodic penalty payments on KPN for unlawful surcharges (in Dutch)