EUR 1.5 million fine for KPN for providing additional discounts

OPTA stimulates KPN to compensate competitors

The Commission of OPTA, the Independent Post and Telecommunications Authority of the Netherlands, has fined KPN EUR 1.5 million for selectively providing additional discounts to business customers from 2006 until the beginning of 2008. This involves the Business Voice International (BVI) discount scheme, which was provided to specific customers in conjunction with a Belzakelijk or Worldline XL discount. These customers were approached and offered these additional discounts, if they procured or planned to procure telephone services from KPN’s competitors. By being selective in offering the discount, KPN acted in breach of its duty to ensure non-discrimination. Its competitors have been prejudiced as a result. In line with OPTA’s policy on fines various factors have been considered for the purposes of determining the amount of the fine, amongst other things, the compensation of EUR 8 million KPN has provided its competitors for this and other contraventions.

Corporate Voice National
OPTA has also examined the discount scheme, Corporate Voice National (CVN). In 2006 KPN allowed this scheme to apply in the case of certain customers before such time as a written agreement had been signed. KPN should have reported this to OPTA. KPN also acted in breach of its duty to ensure non-discrimination, because the discount scheme did not come into effect before an agreement was signed in the case of every customer. The annual settlement for the purposes of this CVN discount scheme, which was set out in the terms and conditions governing its use, was also implemented flexibly. This allowed KPN to strategically bind customers and put competitors at a disadvantage. OPTA has not been able to determine a contravention, but states that in future KPN has to settle the discount scheme within six months, otherwise it will be considered a contravention. Taking into account the compensation KPN has provided its competitors, this time OPTA will suffice with a warning.

Decision on KPN's objections to fines imposed in 2007
In 2007 OPTA imposed two fines on KPN for contraventions of the Telecommunications Act [Telecommunicatiewet], one of which amounted to EUR 1.6 million and the other EUR 2.88 million. Both cases involved discount schemes which KPN had failed to report to OPTA and which it had also not disclosed to market parties in the appropriate manner. KPN lodged objections against these two fines with OPTA and simultaneously offered to compensate its competitors. OPTA declared that there were no grounds for these objections. Taking into account the compensation, which constituted a new fact, when considering the objections, OPTA decided to reduce the fines by 15% in these specific cases.

Compensation for competitors
KPN has placed compensation totalling a net sum of EUR 8 million at the disposal of an association in which various competitors of it are represented. This amount serves as compensation for the losses which those competitors may have suffered in the following cases: BVI (OPTA/AM/2008/202097), CVN (OPTA/AM/2008/202273), the above-mentioned contraventions dating from 2007 (OPTA/TN/2007/202036 en OPTA/IPB/2007/201448), SNT (OPTA/TN/2006/203208), which has already been dealt with, and workplace services (OPTA/AM/2008/201025). These decisions are not available in English.