National Competition Office Imposes Record Fine
Broadband providers accused of fixing price and anti-competitive behaviour5th March 4327The National Competition Office, the Egelian competition regulator, has announced the imposition of the largest fines since its creation. Three of the country's four largest broadband providers, ETC, Nirvana Communications and TalkNow, are the companies facing sanctions, which total over ₤100 million. Following a long term and well publicised investigation, the NCB announced that they had found the three firms were colluding in order to exploit their position in the market to overcharge consumers and maximise profits. In addition to increasing prices, the three companies were also accused of deceiving customers about the process of switching between providers. All three say they will challenge the decision.
The three companies account for around two-thirds of the broadband provision marketChairman of the NCO Iker Bergalló commented; "broadband providers have been caught here behaving in a manner is totally unethical and which shows a complete disregard for consumers. The sanctions imposed on the three companies involved are proportional to the scale of the exploitation which we uncovered throughout this investigation, which demonstrated widespread collusion to fix price to benefit corporate interests at the expense of providing a high quality, affordable service for customers. In future, we will continue to monitor closely the activities of these three companies as well as other firms in the market to protect consumer interests".
In their full length report, the NCO desribe how the three companies were able to steadily increase prices over a number of years without risking any market share by doing so in collaboration with one another. The report presented evidence which highlighted the excessive nature of these price rises, with the average cost of providing connection actually falling over the past decade due to a period of deflation. In spite of this, the average price of broadband has rise by 240% within the last two years alone and created a nightmare for households who have seen little growth in wages.
Furthermore, in an attempt to prevent consumers from switching to other providers such as InData, who launched the complaint which precipitated the NCO investigation, the companies presented misleading information about the cost and effort associated with switching between providers. Eustacio Correa, who contacted ETC when the cost of his broadband rose by ₤60, explains "I was told there would be a significant fee to be paid if I decided to switch away from ETC. When I tried to ask them more about why this was, they became very vague and said it was related to the complicated nature of moving to a new provider. It was almost impossible to switch". Anna Albet of the Democratic Constitutionalist Party has called on the government to establish a national helpline for switching.