KPN must offer business customers the opportunity to cancel their contracts free of charge

The Netherlands Authority for Consumers and Markets (ACM) has instructed Dutch telecom company KPN to offer a group of business subscribers the opportunity to cancel their subscriptions free of charge. They are then able to switch providers, if they wish to do so. This group concerns business customers with so-called ‘Zakelijk BelBasis’ contracts, which KPN earlier this year converted into a different type of business contract, ‘Zakelijk BelVrij Totaal’, which has different conditions.

KPN has been given this instruction, because this unilateral contract conversion did not clearly benefit subscribers. In such situations, the company must offer customers the opportunity to cancel their contracts free of charge. Since KPN has not offered these customers that opportunity, ACM has instructed KPN to do so.

If KPN fails to comply with this instruction, it risks periodic penalty payments of up to EUR 300,000. Anita Vegter, Member of the Board of ACM, explains: “Subscribers must be given the opportunity to cancel their contracts if their telecom provider unilaterally changes the contract. To have fair competition, it is critical that all providers comply with these rules. That is why we are taking action.”

Earlier this year, KPN converted the ‘Zakelijk BelBasis’ contracts into ‘Zakelijk BelVrij Totaal’ contracts. Subscribers that are affected no longer pay for each individual call, but pay a customized all-in rate instead. For each subscriber, that rate is based on their individual call history, using a reference period of 12 months. This method negatively affects customers that structurally made fewer calls with KPN during or after their reference period.

This is particularly the case for customers that started using other providers for their calling needs, which are the so-called CPS customers (Carrier Preselect). Another contract adjustment that did not offer a clear benefit to customers was switching from paying in arrears to paying in advance. ACM concluded that these contract changes did not clearly benefit subscribers. KPN is therefore required to offer them the opportunity to cancel their contracts free of charge.

KPN is required to send, no later than January 9, 2014, customers with the abovementioned contracts a letter with information about their adjusted contracts, in which KPN also offers them the opportunity to cancel these contracts free of charge. For each day that KPN does not meet this requirement, it must pay a penalty payment of EUR 10,000 with a maximum of EUR 300,000.