Telecom Italia fined 116 million euros for broadband market abuse

MILAN (Reuters) - Italy’s competition watchdog said on Friday it had fined former phone monopoly Telecom Italia (TIM) 116 million euros ($131 million) for abusing its dominant position in the broadband market in an attempt to obstruct the entrance of rivals.

FILE PHOTO: Telecom Italia new logo is seen at the headquarter in Rozzano neighbourhood of Milan, Italy, May 25, 2016. REUTERS/Stefano Rellandini/File Photo

The Italian antitrust authority said in a statement that Telecom Italia had conducted a “premeditated anti-competition strategy” aimed at hindering its competitors’ investments in ultra-fast broadband.

The authority opened its investigation into TIM’s superfast broadband rollout and wholesale pricing plans three years ago after TIM, then headed by Chief Executive Flavio Cattaneo, announced a plan, dubbed Cassiopea, to roll out fast broadband in so-called uneconomic areas.

TIM had initially said it would not roll out broadband in areas where it could not guarantee a return on its investment, forcing Rome to step in with state subsidized tenders.

But it subsequently changed its mind, saying it would invest its own money in some of those areas, arguing the market had changed.

TIM's change of heart came after the phone group lost out in the first of the tenders to Open Fiber, a broadband unit jointly owned by power utility Enel ENEI.MI and state lender Cassa Depositi e Prestiti.

The antitrust body said TIM had sought to stop competition from other operators with its behavior to preserve its dominant market position.

“TIM decided an unprofitable change of its coverage plans during the tenders and took legal initiatives aimed at delaying them,” the regulator said in a statement.

TIM, which later put the Cassiopea project on hold, said in a note it deemed the decision unwarranted and would appeal it.

($1 = 0.8843 euros)

Reporting by Elvira Pollina, James Mackenzie, editing by Valentina Za, Kirsten Donovan and Jonathan Oatis