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NMa Fines Mobile Telephone Operators EUR 88 Million

The Netherlands Competition Authority (NMa) has imposed fines totalling EUR 88,000,000 on Ben Nederland B.V., Dutchtone N.V., KPN Mobile N.V., O2 (Netherlands) B.V. and Vodafone Libertel N.V. NMa has established that these companies coordinated their behaviour in relation to the reduction of dealer fees for post-paid mobile telephone subscriptions. In addition, they exchanged sensitive information relating to competition in the area of prepaid packages.

This is the highest fine that NMa has imposed to date for an infringement of the Competition Act. The fines per company amount to EUR 15,200,000 for Ben, EUR 11,500,000 for Dutchtone, EUR 31,300,000 for KPN, EUR 6,000,000 for O2, and EUR 24,000,000 for Vodafone. NMa has established that Ben and Vodafone took the initiative to coordinate the companies’ behaviour. Consequently a higher fine was imposed on these companies.

The decision confirms the suspicions which NMa set out in a report in July 2002 following an investigation, to which the mobile operators subsequently responded. The reason for the investigation were signs, for instance in the media, that the operators intended to reduce the fees paid to dealers in about September 2001. NMa has now concluded that the mobile operators coordinated their behaviour during a meeting in June 2001. This is disadvantageous to consumers because it almost entirely eliminates competition between the various providers of mobile telephony in this regard. The purchase of a mobile telephone in combination with a subscription has consequently become more expensive.

Agreements between entrepreneurs which restrain competition are prohibited under the Competition Act. One of the factors on which mobile operators compete with each other is the fee that the operators pay to dealers. The dealers set their retail prices partly on the basis of this fee.