While the evidence didn’t show anti-competitive practices, price increases for telecoms services have proved contentious, particularly if poorly communicated
Operators were alleged to have colluded on pricing: Croatia’s Competition Agency, the AZTN, has dismissed complaints against A1, Hrvatski Telekom and Telemach that the three operators breached antitrust law by increasing their prices at the same time. Complaints were made to the AZTN by two consumers on 2 June 2022 and were based on reports in the media about changes to the price of mobile services. The authority carried out a preliminary market investigation with the aim of identifying sufficient circumstantial evidence as to whether the price increases implemented by the operators in 2022 were the result of an agreement between them or due to “other circumstances in the market”. The AZTN’s assessment confirmed that price rises had occurred during 2022, with the operators stating that they were a response to increasing operational costs driven by inflationary pressures.
The AZTN drew several conclusions: The competition authority’s analysis outlined a number of findings:
The three operators sell bundles of telecoms services and that these offers differ to some degree in their make-up;
During 2022, some of these bundles had been withdrawn, whereas others had elements modified, e.g. the call minutes included or the data allowance;
The telcos introduced new bundles and services to the consumer and business markets; and
The operators did not raise the prices of all bundles and services, and that those that were increased were not done so by the same amount or percentage.
The AZTN also highlighted the pricing obligations relevant to telcos in Croatia, which require that all players must inform the regulator (HAKOM) and their customers prior to any change in the price of their services.
Index-linked annual price rises have faced opposition: In the end, the investigation did not point to illegal contact between the three operators or any agreement(s) prior to changes in the price of their services. The AZTN therefore decided to dismiss the complaints. Though A1, Hrvatski Telekom and Telemach were cleared of collusion, Croatia may not be an isolated incident. It was reported, for example, that the CPCC in Ireland was poised to investigate whether advanced warnings of price rises constituted illegal price signalling. More broadly, price rises in the telecoms industry have become a contentious issue, largely due to the fact that increases have been above the rate of inflation. That said, in Ofcom’s view, transparency of price rises is more of a concern than the increases themselves. Poor communication has led to telcos in Portugal receiving fines and being encouraged to do more to support financially vulnerable households.
