The Authority for Consumers & Markets has fined a major telecom provider nearly €30 million for breaching its non-discrimination and transparency obligations. While publication of the decision and the subsequent ruling on an appeal was put on hold at the request of the telecom provider, in late January the Dutch Trade and Industry Appeals Tribunal (Cbb) ordered that ACM was entitled to disclose its decision.
In 2010, the telecom provider infringed its non- discrimination obligation during a large tender procedure called OT2010 for providing fixed telephony services to several government agencies. The ACM has established that, at a crucial moment during the tender procedure, the leading telecom provider favored its own subsidiary to the detriment of competitors by providing it relevant information on a discount scheme before informing competitors. By not simultaneously informing its competitors of the new offerings, these competitors were placed in a disadvantageous position because they could not implement the lower tariffs in their tender offer.
FINE WAS LARGER BECAUSE COMPLIANCE PROGRAM WAS INEFFECTIVE
Interesting to note is that the imposed fine was increased because the telecom providers’ compliance program had proved ineffective. This is in contrast to the often pleaded argument that having a compliance program gives reason to lower a fine. In a speech on 24 January 2014 for the International Chamber of Commerce, ACM chairman Chris Fonteijn pointed out that the circumstances at hand were special. The telecom provider had agreed with the ACM on the content of the compliance program and provisions were included on the effect of fines. The ACM has made no such agreement with companies in other sectors.
Does the ACM in general grant a fine reduction if a compliance program is in place? The answer is no. The ACM still advises to have an efficient compliance program because it may prevent an infringement, will generally limit the duration of an infringement and timely discovery of an infringement allows the company to be the first to file a leniency application.
The ACM recommends the use of an effective compliance program. Further, we advise to add an internal procedure to the compliance program in order to steer in the right direction in case of a dawn raid or other procedure.