HT and T-Mobile Abused Dominant Position

The Council for the Protection of Market Competition has assessed that HT and its affiliated company T-Mobile Croatia, from November 13, 2003, onwards, abused their dominant position in the relevant telecommunications services market by entering into Framework Agreements for the provision of telecommunications services with addenda and attachments, with twenty-three (23) different entrepreneurs – their key business customers, as announced by the Agency for the Protection of Market Competition.

The reasoning of the decision states that HT and T-Mobile "conditioned their customers’ contract signing on their acceptance of additional obligations, which by their nature or trade customs are not related to the subject of those contracts, and which are considered serious restrictions on market competition in terms of competition protection regulations." This procedure was initiated based on a request from VIPnet. "The agreed additional obligations aimed at, and simultaneously had the effect, or possible effect, of preventing or limiting access to the market for HT and T-Mobile’s competitors," further states the AZTN announcement.

These are contractual provisions whereby twenty-three (23) customers, during the contractual term, essentially committed to inform HT and T-Mobile about the offer of specific new services that competitors of HT and T-Mobile offer to these customers, or about provisions whereby customers are obliged to accept HT and T-Mobile’s offer if the prices are equal or lower, and the quality is equal to or better than the competitors’ offer. Customers were also obliged to inform HT or T-Mobile about the percentage of telecommunications services that were the subject of the contract and which customers could also use from competitors, but exclusively for business or security reasons and only to a limited extent (so-called "limited scope telecommunications services"). Furthermore, the relevant contracts also contained provisions whereby customers committed to use all telecommunications services that HT and T-Mobile offer or will offer in the market after the conclusion of the contracts.

During this procedure, HT and T-Mobile submitted several amended relevant contracts to the Agency, in which the aforementioned restrictive provisions were amended or deleted, or rendered ineffective, as well as evidence of the termination of certain contracts. However, the Council determined that the restrictive provisions are still in effect in fourteen (14) relevant contracts, which clearly indicates that HT and T-Mobile are still abusing their dominant position in the relevant market. The Council, due to the very content of the restrictive provisions, their duration (on average three years), penalties (in terms of the possibility of unilateral cancellation of discounts for customers due to using competitors’ services), indisputably established that HT and T-Mobile, by entering into the relevant contracts, abused their dominant position in terms of competition protection regulations in the relevant markets in the territory of the Republic of Croatia where the relevant contracts had an effect.

Based on the Council’s decision, the Agency ordered HT and T-Mobile to delete entirely or amend the restrictive provisions that are still in effect in fourteen (14) relevant contracts. Furthermore, based on the Council’s decision, the Agency prohibited HT and T-Mobile from any future actions that would abuse their dominant position by entering into agreements containing restrictive provisions in terms of competition protection regulations, or whereby HT and T-Mobile would directly or indirectly financially incentivize their service users, states Bankamagazin.