French regulators fined the three French mobile telecom operators a total of €534m today for rigging market conditions.
The decision, three days after a similar announcement of fines against top hotels in Paris, also faces the telecom operators with a risk of heavy compensation to subscribers.
The Competition Council watchdog took the action against SFR, Bouygues Telecom and France Telecom subsidiary Orange for 'particularly serious' collusion in sharing market information which had done 'great damage to the economy'.
The biggest fine, a record of €256m, fell on Orange. SFR, a subsidiary of Vivendi Universal, was fined €220m and Bouygues Telecom, the smallest of the three, €58m, the council said.
The operators had exchanged subscriber figures and fixed market shares resulting in increased costs for customers, the council said.
On Monday the Competition Council announced that it had fined six luxury hotels in Paris a total of €700,000 for colluding over market conditions.
Orange and SFR rejected the telecom fines in vigorous terms and said they would appeal. France Telecom, which was fined €80m in November for obstructing access for competitors to the market for high-speed Internet services until October of 2002, systematically appeals against such decisions.
Orange protested that the fine was 'unfounded' and 'seriously disproportionate'. Information exchanged by the three operators had been of a 'non-competitive nature' and could not cause 'prejudice to consumers or the economy or lead to a freeze of market share', it said.
SFR said its fine was 'unfounded', and 'out of proportion to all those already inflicted in similar affairs'.
The French consumer group, UFC-Que Choisir, has said that it might pursue the three operators on behalf of customers for civil damages, saying that 30 million subscribers had suffered a prejudice totalling €1.2 billion.
Stock market circles had expected fines and the price of shares in all three companies controlling the telecom operators, which had slipped yesterday, firmed in trading this morning.
The Competition Council found that between 1997 and 2003, the operators had exchanged confidential information about new-customer and cancellation numbers. Between 2000 and 2002 they had fixed their respective shares of the market.
The collusion had provided the operators with 'relative medium term stability' and pushed up prices for consumers. In reducing competition, it had enabled them to focus on 24-month customer contracts rather than on pre-paid cards. All three operators had also imposed an obligatory first-minute charge, followed by increases calculated on half-minute segments.
