Complaints about Price Fixing in Cell Phone Companies

At the start of privatisation of the cellular market in Costa Rica, the Mexican company Claro is questioning agreements between the Instituto Costarricense de Electricidad (ICE) and the Spanish run Telefónica.

Wednesday, August 31, 2011

The complaint filed by Claro to the Superintendency of Telecommunications (Sutel) indicates that in the access and interconnection agreement signed between the ICE and Telefonica, there are clauses where both companies are committed to not charging prices below the cost of services rendered, considering interconnection charges as a common expense to both parties.

Monica Cordero Sancho in her article in, reported that the complaint by Clara states: "We have expressed that from the regulatory point of view, the agreement between the ICE and Telefonica is inappropriate, being a topic outside the scope of a contract for interconnection networks’, and ‘from the standpoint of competition law and protection of user rights, such provisions are unfair business practices... falling within absolute monopolistic practices, given that the agreement represents a questionable collusion between them regarding setting a floor price for the purchase or sale of services. "

Claro also alleges that the agreement ‘prevents companies from transferring the benefits of efficient operation to customers through the cost of services’".

More on this topic

Superintendence Rejects Objections to Claro – ICE contract

October 2011

The Superintendency of Telecommunications in Costa Rica has rejected objections raised by Telefónica over an interconnection agreement between Claro and the ICE.

Overruling the complaints, the regulator has given the green light for the interconnection between the Ice and Claro.

Telefónica Challenges Contract Between ICE and Claro

October 2011

Between the Spanish company and other players in the market there are 30 objections to the agreement between the Instituto Costarricense de Electricidad and America Movil's Claro.

Among the questionable items under review by the Telecommunications Authority is the possibility that confidentiality agreements could be made and alleged monopolistic practices.

Price Fixing in Mobile Phone Companies Prevented

September 2011

The Costa Rican regulator has prevented telephone companies Telefónica and ICE from agreeing on tariffs for end users within a contract for interconnecting their networks.

The company Claro filed a complaint to the Superindendency of Telecommunications (Sutel), which stated that the access and interconnection agreement signed between the Instituto Costarricense de Electricidad (ICE) and Telefónica, contained clauses where both companies agreed not to charge prices below the cost of services provided, considering the interconnection charges as a cost common to both.

Claro Appeals Against ICE - Telefónica Interconnection Agreement

August 2011

Claro has filed an appeal with the Costa Rican Superintendency of Telecomunitions denouncing the agreement.

The complaint filed by Claro asks the regulator to eliminate several articles of the agreement, which has already been signed, on the grounds that they contain monopolistic practices "in violation of the competitive regime."