EC to crunch Wanadoo's numbers

Predatory pricing allegations provoke investigation

By Tim Richardson • Get more from this author

Posted in Business, 16th February 2004 14:00 GMT

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The European Commission is to keep a close eye on Wanadoo's accounts until the end of 2006, following allegations of predatory pricing against the French ISP.

According to the FT, the Commission has ordered Wanadoo to hand over accounts for surveillance in order to prevent any further abuse of its dominant position.

The newspaper states it has seen an unpublished report by the Commission which reveals that the ISP was engaged in anti-competitive trading.

Last July, the EC slapped a €10.35 million fine on Wanadoo for predatory pricing on consumer ADSL services in France.

An investigation found that the France Telecom-owned ISP deliberately set prices on broadband products at lower than cost. This restricted the opportunities of rivals to enter the market and constituted an abuse of a dominant market position, the Commission ruled.

The matter is the subject of an appeal by Wanadoo.

A spokeswoman for France Telecom declined to comment on the report, except to say: "Wanadoo appealed against this decision in October 2003. We have nothing more to say than what was written in our press release from July 16, 2003, that we published after the decision."

In that statement the ISP said: "Wanadoo deeply regrets the decision announced today by the European Commission, based on what Wanadoo believes is a flawed economic analysis. It constitutes a bad signal for all businesses wishing to participate, invest and take risks in developing broadband Internet."

In December last year, AOL France complained to French competition authorities over allegations that Wanadoo was engaged in predatory pricing.

AOL France boss Stephane Treppoz said that Wanadoo was flogging broadband at a price lower than the wholesale cost of the service. ®