In a complaint filed late last week with the European Court of Justice, Vodafone Netherlands accused former state telecom monopoly KPN of abusing its dominant position in the Dutch market by reneging on commitments to deploy the virtual Internet service provider (VISP) platform that Vodafone needed to offer competitive broadband services to Dutch customers.
Vodafone’s lawsuit, which resembles similar pending legal claims against Telecom Italia and O2 Czech Republic, seeks €115 million (US$125.3 million) in damages from KPN. Like many competitors in foreign markets outside of its domestic service area, Vodafone must rely on network capacity supplied by incumbents such as KPN to launch rival services. According to Vodafone, KPN agreed four years ago to provide Vodafone with a VISP platform that would enable Vodafone to roll out competitive digital subscriber line services to Dutch customers within a five-month timeframe. Vodafone claims, however, that KPN failed to deliver, forcing Vodafone to postpone its service by three years while it deployed its own platform. Meanwhile, during the three-year period in question, KPN introduced a rival, bundled service package that “prevented Vodafone Netherlands from gaining a significant market share in a crucial period when more than 100,000 households per quarter chose to move” to such packages. Estimating that it lost €115 million in potential revenue, Vodafone asked the court to award that same amount in damages and to declare that KPN’s actions constituted an abuse of its dominant market position.