By John Revill
ZURICH--Switzerland's competition authority WEKO Friday said it
was launching an investigation into allegations of anti competitive
behaviour by telecommunications company Swisscom AG (SCMN.VX).
WEKO began its inquiry following complaints, denied by Swisscom,
that the company had abused its dominant market position when
bidding for broadband internet contracts with business customers in
Switzerland.
The case is the latest in a series of anti competitive cases
brought against Swisscom, the formerly state-owned company which
had a monopoly on telecoms before the Swiss market was liberalized
in 1998.
In its latest investigation, WEKO said Friday there were
indications that Swisscom, which has 54% of internet subscriptions
in Switzerland, used its dominant position to prevent competitors
bidding for contracts with the Swiss post office.
Swisscom and two other telecoms companies, including Sunrise
Communications AG - owned by CVC Capital Partners - had bid for the
contract in 2009 to connect all the 1,757 post office branches in
Switzerland with broad band internet.
The other telecoms companies had to use Swisscom's internet
network, because of the company's dominant position.
WEKO said there was evidence that Swisscom set the wholesale
price to access its network too high for rivals to make competitive
offers, resulting in Swisscom winning the contract.
If Swisscom is found to be anti competitive, the company could
face a fine of up 10% of its revenue over the past three years. A
spokesman for WEKO said the investigation is likely to last 18
months.
A spokesman for Sunrise, which made the complaint to WEKO, said
Swisscom had quoted a price of 25 million Swiss francs ($26.5
million) to use its broadband infrastructure.
Swisscom won the contract with the Swiss post office after
making an offer of CHF20.5 million to carry out the project.
"We believe this was anti competitive behavior which we cannot
accept," said Sunrise spokesman Tobias Kistner. "This shows that
the market is not as free as it should be."
Swisscom said it was amazed at the investigation, and rejected
allegations that it had unlawfully impeded competition.
"Swisscom is confident that the competition commission will come
in the course of the investigation to the same conclusion," the
company said in a statement.
Write to john.revill@dowjones.com
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