Tuesday, December 06, 2011

The thin line between following the market leader and collusion

The offices of the three Dutch MNOs, KPN, Vodafone NL and T-Mobile NL, were raided by the antitrust authority NMa on suspicion of price arrangements (collusion) and carving out distribution (retail) channels. The three aren't denying, but guaranteeing full cooperation. KPN stated that five employees have been singled out for the investigation. The NMa stated that they have official statements from two whistleblowers.

There are speculative reasons to believe both sides (it's an investigation, and pending the results no one is guilty):

Speaking for the operators:

  • Price arrangements would be stupid because of the PR risk. The operators have only recently been convicted for similar charges dating back to 2001.
  • Price arrangements also appear to be unnecessary in the light of the oligopolistic market, where Voda and T-Mo follow KPN - which is not illegal.
  • There was a direct reason for all operators to move quickly and raise prices during 11Q2: a rather sudden change in consumer behavior from late 2010, embracing IM/chat/VoIP apps. This put pressure on voice/SMS income. Moreover, charging for these data comms apps was made impossible because of the new net neutrality laws.
Speaking for the whistleblowers:
  • They, and the NMa, appear to be very serious.
  • The operators are not denying.
What may have been the case?
  1. The allegations are true. In this case, consequenses will be severe, both in terms of fines and in terms of regulation. NPS numbers will go down the drain.
  2. The allegations are not true. The whistleblowers are in fact disgruntled employees - or so. Naturally, they approach right-wing media and populist politicians, such as the neo-fascist PVV party supporting the current government.
At this point it is impossible to say which is true. Perhaps the whistleblowers speak the truth. But if they cannot see the difference between 'following the market leader' and 'making illegal price arrangements', then the charges may very well be untrue.

No comments: