Record $12 million Telecom fine stands

The Court of Appeal has upheld a record fine against Telecom New Zealand for charging downstream competitors disproportionately high prices for network access

The Court of Appeal has upheld a record $12 million penalty imposed against Telecom in April 2011 for breaching the Commerce Act, after Telecom appealed the size of the fine.

Telecom says it is reviewing the decision and considering next steps.

In 2009 the High Court found Telecom unlawfully took advantage of its market power to charge competitors disproportionately high prices for wholesale access to its network between 2001 and 2004.

This impacted on its rivals' ability to provide competitive services to business customers.

In July, the Court of Appeal ruled the anti-competitive behaviour actually began two years earlier, in 1999.

In its latest judgment on the matter, it said the $12m penalty was by was ''no means excessive given the extent of the breach we are now dealing with".

Commerce Commission chairman Mark Berry said "a significant penalty such as this'' sent a strong signal to businesses that taking advantage of market power to prevent rivals from competing effectively was a serious breach of the Commerce Act.

''Consumers and rival businesses must have the full protection of the law to enjoy the benefits of competitive markets," he said."

The judgment is available at

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