Tuesday, April 19, 2011

Telecon fined by the High Court for offences again

Theresa "Train Wreck" Gattung
Telecon a.k.a Telecom NZ was today fined yet again by the High Court in Auckland, this time $12 million for anti-competitive behaviour, the highest penalty available under the Commerce Act, which was amended in 2001 to increase the fines available for this offence. The Commerce Commission had sought a penalty in the range of $20 million to $25 million.

In October 2009 the High Court found that between 2001 to 2004, Telecom unlawfully leveraged its market power to charge downstream competitors disproportionately high prices for wholesale access to its network. This prevented the company from offering retail high-speed data services on a competitive basis. In a penalty judgement issued today, Justice Rodney Hansen said Telecom's conduct was "injurious to competitors, brought significant benefits to Telecom and were damaging to the competitive process." The court upheld the Commerce Commission's claim that some of the wholesale prices charged by Telecom for access to its network were so high, in relation to retail prices, as to cause a price squeeze.

Justice Hansen also noted in this case no allowance could be made for an acknowledgement of wrong-doing or a negotiated settlement, and the penalty therefore had to "give full effect to the new penalty regime and the overriding goal of deterrence".

The period in question was of course during the reign of Theresa 'Train Wreck' Gattung, who should have been held personally accountable for the company's huge list of offences that she authorised, along with the body corporate.

Naturally, Telecon has announced that its lawyers will benefit more from its offending as it appealing against the High Court's decision, even though the amount of the fine is paltry relative to its profits, estimated this year at $300 million.

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