Antitrust Authority: Bezeq abused its standing

The Antitrust Authority has notified Bezeq that it abused its monopoly position with regard to its pricing policy for Internet and telephony infrastructure services.

The Antitrust Authority today notified Bezeq Israeli Telecommunication Co. Ltd. (TASE: BEZQ) that it abused its monopoly position with regard to its pricing policy for Internet and telephony infrastructure services, in violation of the Antitrust Law.

Bezeq was declared a monopoly in Internet and telephony in the early 2000s. In the first quarter of 2011, Bezeq made an offer to consumers to purchase, in addition to the Internet infrastructure, telephony services, 200 call-minutes, at NIS 19.90 per month. At the same time, Bezeq charged customers who requested to purchase an only ADSL line for Internet access an additional NIS 25 per month.

Although Bezeq had Ministry of Communications permission for the offer, in 2012 the ministry cancelled the charge for the ADSL only line. In addition, the offer created a negative price gap: the price of the ADSL only line was higher than the price for the combined Internet and telephony infrastructure. This pricing put rival telephony carriers in an inferior competitive position.

The Antitrust Authority opened an inquiry into the matter following complaints by Partner Communications Ltd. (Nasdaq: PTNR; TASE: PTNR) unit 012 Smile Telecom and Cellcom Israel Ltd. (NYSE:CEL; TASE:CEL) unit 013 NetVision, whose telephony service customers purchased an ADSL only line from Bezeq at a cost of NIS 25 per month, in addition to what they paid Smile and NetVision.

Bezeq has two weeks to respond to the Antitrust Authority’s decision. Bezeq said in response that it was studying the matter.

Published by Globes [online], Israel business news – www.globes-online.com – on February 11, 2013

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