France Telecom stung over predatory pricing

The European Commission on Tuesday backed a Eur10.35m fine against France Telecom for anticompetitive pricing in the ADSL market in 2003.

The ruling overturns an appeal by the French carrier in respect of the Commission’s 2003 decision concerning “predatory” pricing.

On July 16 2003, the EC fined France Telecom’s internet arm, Wanadoo, Eur10.35m for charging below cost prices for certain ADSL services in a bid to exclude competitors from the broadband market.

The Court of First Instance (CFI) rejected Wanadoo’s appeal in its entirety and confirmed the Commission’s approach as regards the calculation of the fines imposed.

“The Court held that prices below average variable cost must always be considered abusive,” a statement from the EC read. “Prices below average total costs but above average variable costs are to be considered abusive if an intention to eliminate competitors can be shown.”