Telefónica ordered to pay Conduit €670k


25 Nov 2005

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Telefónica, which is currently in the process of acquiring the O2 Group for €26bn, has been ordered by a Spanish court to pay Irish directory firm Conduit costs of more than €670k plus legal costs in relation to a case whereby Conduit claimed it was provided with inaccurate and incomplete subscriber data that put it at a competitive disadvantage when it entered the Spanish market in 2003.

The court ruled that Telefónica had breached competition law and abused its dominant position by providing Conduit with defective and incomplete subscriber data.

The action was taken by Conduit in the new specialised Spanish Court, the Fifth Commercial Court of Madrid.

This is the first time a Spanish court has granted damages for a breach of telecommunications market regulations, on the back of a prior declaration of that breach by the telecoms regulator, the Comisión del Mercado de las Telecomunicaciones (CMT). The ruling is one of the first of its type in Europe and the first in Spain.

The events in question date back to April 2003, when the directory enquiries market in Spain effectively opened and ‘118’ services were launched. Telefónica was required to deliver accurate subscriber data to competitive providers in order to enable fair competition.

However, the CMT declared in 2003, as a result of complaints filed by Conduit, that Telefónica had breached these obligations.

Conduit said today this court ruling confirms that Telefónica provided Conduit with inaccurate and incomplete subscriber data, which caused the new entrant a competitive disadvantage and additional costs of over €670,000 relating to the cost of sourcing alternative data and data cleansing. The court has ordered Telefónica to pay Conduit for these costs as well as legal costs.

“We are delighted with the ruling as it is a formal acknowledgement of the unfair competitive advantage we had been put under by Telefónica in Spain,” commented said Liam Young, Conduit’s CEO.

“Furthermore, we hope this acts as a signal to other major operators in the sector, that their dominant position is not abused,” he said.

By John Kennedy