On 26 May 2009, the Belgian Competition Council fined Belgacom's subsidiary Proximus € 66,3 million for having abused its dominance on the market for mobile telephony in 2004 and 2005. The Council's decision follows an investigation that was initiated by the College of Competition Prosecutors further to a complaint lodged by Base and included a dawn raid at Proximus' premises in January 2006.
In its decision, the Council first analysed the structure and evolution of the market for mobile telephony, taking into account the degree of market regulation which has its origins in the European liberalisation package. The Council established that, during the period from 2002 to 2005, Proximus held a dominant position on the Belgian market for mobile telephony and an important position on the market segment for professional users, which was reinforced by additional factors such as Belcacom's extensive network of teleshops through which Proximus was able sell its products.
Against this background, the Council analysed Proximus' commercial strategy for professional users, in particular large companies and public authorities that have specific mobile telephony requirements. The Council ruled that, in 2004 and 2005, Proximus abused its dominance by applying a margin squeeze. As explained by the Council in its decision a margin squeeze implies there is a negative or at least insufficient margin between the prices the dominant company applies to end-consumers on the one hand, and the wholesale prices it applies for similar services to its competitors on the other hand, as a result of which competitors cannot offer competitive services at similar prices to those of the dominant company. The Council ruled that it was established that there had been a clear negative margin between Proximus' on-net calls tariffs (for calls between two customers of its own network) and the termination rates that competitors had to pay for termination off-net calls from their network on Proximus' network, which made it impossible for competitors to offer cheaper or even equivalent tariffs to their own customers for calls to the Proximus network.
In its fine calculation, the Council took account of a number of factors, such as the nature and economic impact of the infringement, Proximus' market share, the fact that liberalisation and promoting competition in the telecom sector is a policy priority, and the need for the fine to have a sufficient deterrent effect.
Proximus has announced that it will appeal the Council's decision. Base from its side announced it would file a damage claim against Proximus.