The Supreme Court of New Zealand has rejected a Commerce Commission appeal over Telecom New Zealand’s 0867 dial-up internet fees in 1999, saying the company did not abuse its market power.
In 1999, the incumbent imposed the 0867 prefix on competitors,…
The Supreme Court of New Zealand has rejected a Commerce Commission appeal over Telecom New Zealand’s 0867 dial-up internet fees in 1999, saying the company did not abuse its market power.
In 1999, the incumbent imposed the 0867 prefix on competitors, including Clear Communications, so it could stem its losses under existing contracts and dial-up internet calls.
The regulator claimed that by introducing the prefix, the telco used its dominant position in the relevant markets to subsidise the fees and make life more difficult for its rivals, thereby breaching section 36 of the Commerce Act 1986. Section 36 is aimed at preventing companies from taking advantage of their market power to deter competition.
But the Supreme Court rejected the Commission’s contention, saying the argument was not put forward in the initial High Court case, and that it was “quite unsatisfactory for the commission on appeal to attempt to remake its case on what is really a speculative basis.”
“Without supporting financial evidence it would be grossly unfair to Telecom to make assumptions about the significance of revenues from other services or the significance of economies of scale,” the judgement read.
The Commerce Commission was ordered to pay $50,000 in costs, plus reasonable disbursements. It has not officially commented yet on the decision.