Following the completion of the hearing process, and after taking into consideration the concerned parties’ written submissions, the CPC evaluated all the evidence before it and unanimously decided at its meeting convened on 25 January 2013, that CYTA had infringed section 6 (1) (a) of the Protection of Competition Law (hereinafter ‘the Law’).
The subject of the case was the complaint against CYTA (no. 11.17.007.08) filed by PrimeTel to the CPC on 26 January 2007, for an alleged infringement of section 6 of the Protection of Competition Laws of 1989 until (no. 2) 2000, which was replaced by the Protection of Competition Law of 2008 (L.13(I)/2008), as a result of charging high prices regarding the supply of international capacity through the SMW-3 submarine fiber optic cable system.
The CPC, as a result of the Supreme Court’s decisions no. 3902 (CYTA and Commission for the Protection of Competition) and no. 1544/09, 1545/09, 1546/09 and 1601/09 (ExxonMobil Cyprus Ltd etc. and the Commission for the Protection of Competition), on 19 January 2012 revoked its previous decisions, since it was decided by the Supreme Court that they have been taken by a non-legally composed administrative body and decided the ab initio examination of the complaint.
The CPC, through its decision dated 10/12/2012, decided that CYTA held a dominant position in the relevant market of international capacity through the submarine cable systems for the route between Cyprus and London. The CPC, after having thoroughly examined the evidence submitted, and especially after taking into account that CYTA was a statutory monopoly for a long period of time and thus had the capability to develop international relations, to invest and create a well established international cable system.
The CPC, through its decision, decided that the price indicated in the contract signed between CYTA and Primetel, dated 1 July 2006, for a period of 12 years, concerning the supply of international capacity through the SMW-3 submarine cable system for the route between Cyprus and London, was unfairly high, resulting in additional constraints for Primetel as a newcomer in the retail market and refraining it from competing CYTA. Thus there was an infringement of section 6(1) (a) of the Law by CYTA.
The CPC held in its decision that, the time at which Primetel had required the above mentioned international capacity from CYTA was crucial and highly important to Primetel. Primetel at that point had just entered the retail market of broadband services, having CYTA as its main competitor, while at the same time CYTA was Primetel’s supplier for inter-connection services, unbundled access to the local loop and international capacity through the submarine cable systems. More specifically, in 2004 Primetel acquired a license from the Office of the Commissioner of Electronic Communications and Postal
Regulation (OCECPR), to supply retail services concerning electrical communications (internet access, cable TV and fixed telephony). After acquiring the relevant license, Primetel signed an agreement with CYTA concerning the unbundled access to the local loop and began the process of inter-connection to CYTA’s Network system.
Moreover, the CPC in its decision noted that it is essential for companies entering the retail market, like in the case of Primetel, to ensure that they have acquired a substantial amount of international capacity in order to avoid the likelihood of calls being disturbed and a possible delay in the time lapse transmitting the sound.
In relation to the above mentioned facts, the CPC concluded that CYTA taking advantage of its dominant position in the supply of international capacity, compared to other competitors within the market, imposed significantly high prices to Primetel regarding the supply of international capacity, hindering Primetel’s possibility of charging lower prices for the same services CYTA was charging its own customers.
The CPC, in deciding on the amount of the fine to be imposed, also took into consideration the importance and the duration of the infringement and according to section 24(a)(i) of the Law, imposed a fine amounting to €295.277 (two hundred and ninety five thousand and two hundred and seventy seven Euros).