31 Aug 2009

Regulator investigates Telecom's loyalty offers

1:09 pm on 31 August 2009

The Commerce Commission is investigating whether Telecom's loyalty offers to its wholesale customers breached the rules it must comply with as an operationally separate firm.

The oversight group set up to make sure the company meets its obligations found the rules had been breached, after receiving complaints from Vodafone and Kordia.

The competition regulator says it has also received complaints about Telecom's loyalty offers to its wholesale customers, and will investigate the matter.

The commission is responsible for enforcing the rules, called undertakings, but cannot penalise a company.

If it finds Telecom has breached its undertakings, the matter will be referred to the High Court, which can issue remedial orders or impose fines of up to $10 million, plus $500,000 a day for breaches occurring after its decision.

The Commerce Commission will seek the views of both Telecom and the complainants before reaching a decision on 9 October about what course of action to take.

It has also received a complaint about the same loyalty offers under the Commerce Act, but hasn't decided whether to investigate the matter separately.

Last week, Telecom said it would study the oversight group's decision that it has breached the rules before commenting further.