Telkom to fight on
The fixed-line operator will appeal the Competition Tribunal’s fine against it. By Craig Wilson.
Telkom has decided it will appeal against the judgment imposed on it earlier this month by the Competition Tribunal. The tribunal found Telkom guilty of anticompetitive behaviour and stifling opposition between 1999 and 2004 and fined the company R449m.
Telkom announced its attention to appeal against the judgment in a statement to shareholders on Thursday.
The company has filed a notice of appeal against the ruling and will now have 40 business days to file the record of appeal before the matter can be scheduled for a hearing in front of the competition appeal court.
Telkom was slapped with the fine at the beginning of August when the Competition Tribunal gave its ruling in a case that has dragged on for almost a decade and been beset by delays, most of them caused by Telkom.
The case was originally brought by a number of Telkom’s rivals, which accused the company of abusing its dominant position and keeping rivals out of the market.
Telkom has previously challenged the jurisdiction of the competition authorities, having earlier questioned its authority to consider the matter. Telkom lost that case at the supreme court of appeal in Bloemfontein.
Should the company’s appeal at the competition appeal court fail, it could return to the supreme court to contest the ruling there.
In its judgment on 7 August, the Competition Tribunal concluded that Telkom “leveraged its upstream monopoly in the facilities market to advantage its own subsidiary in the competitive value-added network service (Vans) market,” and that its conduct “caused harm to both competitors and consumers alike and impeded competition and innovation in the dynamic Vans market”.
In calculating the penalty, the tribunal drew on penalty guidelines set by the competition appeals court in an earlier case involving Southern Pipeline Contractors. In terms of the Competition Act, administrative penalties are paid into the national revenue fund.
According to the tribunal’s ruling, half of the R449m penalty levied against Telkom was to be paid within six months of the tribunal’s decision with the other half payable within 12 months thereafter (assuming there was not a succesful appeal against its decision).
Meanwhile, Telkom’s troubles appear far from over. It will soon be before the competition authorities again over separate cases, one involving a complaint by Dimension Data division Internet Solutions and a group challenge brought against it by the Internet Service Providers’ Association, MWeb, Internet Solutions and Verizon Business (now part of MTN). — (c) 2012 NewsCentral Media