OPTA: €17 million fine for KPN

The Commission of OPTA, the Independent Post and Telecommunications Authority, has imposed penalties totalling €17 million on KPN. Over a number of years KPN has contravened the Telecommunications Act on many occasions (371) by providing unlawful discounts in the business segment of the telephony and leased line markets. This took the form of large-scale, structural contraventions, as a result of which it is reasonable to assume that competition was significantly undermined for a lengthy period. The discounts that were offered fell outside the normal scope which OPTA allowed KPN for this purpose.

OPTA has been investigating unlawful discounts since the summer of 2004. In the autumn of that year, KPN reported a large number of such cases to OPTA of its own accord. KPN also cooperated fully with the investigation after this.

In line with the general policy which OPTA pursues in respect of penalties, various factors, which are weighed together, are important in determining the amount of any penalty. This concerns, for instance, the seriousness of the offence, the fact that KPN reported contraventions itself, its close cooperation with the investigation, its willingness not to pursue any further litigation in respect of the decision to impose a penalty, and its provision of compensation amounting to €18 million to its competitors. KPN has revealed that this compensation will be made available to a foundation to which its various competitors are affiliated.

Mr Chris A. Fonteijn, Chairman of the OPTA Commission, stated the following: ‘Through this decision we believe that we have found a healthy balance between the imposition of penalties on KPN and the deterrent effect of the amount of the penalty.’

The decision to impose a penalty and the relevant report may be viewed on this website along with the press release, OPTA’s response to KPN’s press release concerning discounts, of 19 October 2004.