Lesley Stones
10 October 2008
Johannesburg — EFFORTS by the Competition Commission to fine Telkom R3,7bn for anti-competitive behaviour have been revived, with the commission winning the right to appeal against a court ruling that temporarily halted its campaign.
The move once again raises Telkom's risk of being heavily punished for behaviour designed to quash rival internet service providers. Telkom still hopes to avoid the fine, however, as the operator was simultaneously granted permission to cross-appeal by the Supreme Court of Appeal yesterday.
The verdict at the heart of the battle came in June, when the Pretoria High Court ruled that the commission could not refer a complaint against Telkom to the Competition Tribunal, sinking its chance of hitting Telkom with the proposed R3,7bn fine.
If the court of appeal upholds that verdict, Telkom will escape the fine. But if it rules that the commission can refer complaints against Telkom to the tribunal, the tribunal will reinvestigate the allegations and decide whether Telkom's market-crushing tactics deserves the fine.
Accusations that Telkom deliberately abused its dominance to stifle competition were lodged by internet service providers in 2002. They accused Telkom of refusing to supply them with bandwidth and charging them more for its facilities than it charged its own internet division.
The commission agreed that Telkom had abused its dominance, recommended the huge fine, and referred the case to the tribunal for ratification. But Telkom derailed the process by asking the court to rule that the competition authorities had no jurisdiction over the telecoms sector, since the territory is overseen by the Independent Communications Authority of SA .
The court's ruling was a blow to the internet industry, which hoped to see Telkom punished for practices that had stifled the sector for years.
Telkom won by arguing that the evidence against it was biased, as it was supplied by a research centre that used people employed by companies making the complaints.
Telkom also said the commission was too late in referring the complaint to the tribunal.
The commission won leave to appeal yesterday after arguing that the evidence it used was not biased.
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