March 26 (Bloomberg) -- Telenor ASA, the Nordic region’s largest phone operator, faces a formal European antitrust probe over allegations it illegally undercut competitors on mobile-data services.
The EFTA Surveillance Authority will investigate whether Telenor and its Telenor Norge unit “charged prices resulting in an illegal margin squeeze on its competitors,” the regulator in charge of supervising Norway’s, Iceland’s and Liechtenstein’s compliance with European rules, said in a statement today.
The decision follows raids by the regulator and the national competition watchdog at the company’s premises in Norway in 2012. The agency at the time said it had reasons to believe Telenor and its Telenor Norge unit violated competition rules in the European Economic Area, which consists of the three countries and the 28-nation European Union.
The EU in 2007 fined Spain’s Telefonica SA and in 2011 France Telecom SA’s Polish arm Telekomunikacja Polska for undercutting competitors by selling high-speed services at a loss. It is also taking a similar case against Deutsche Telekom AG and its Slovak Telekom AS unit.
Telenor will continue to work closely with regulators, Torild Uribarri, a spokeswoman for the Fornebu, Norway-based company, said by telephone.
“This is not dramatic for us, it’s more like the formal decision that they would like to continue their investigation,” said Uribarri. “We think that we have acted in accordance with the competition law.”
The watchdog will also examine “whether clauses in Telenor’s retail agreements concluded with customers for the supply of mobile telecommunications services give rise to market foreclosure concerns.”
Such behavior by the company would have harmed competitors and also consumers by limiting choice and the possibility of lower retail prices, the authority said.
“The decision to open proceedings does not signify that the authority has made a finding of infringement or prejudge in any way the outcome of the investigation; it only means that the Authority will proceed with an in-depth investigation,” Per Andreas Bjoergan, director of the authority’s competition and state aid unit, said in the statement.
The Surveillance Authority, which has no deadline to complete competition probes, can fine companies as much as 10 percent of annual sales.
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