Record penalty for Taiwan telcos over market collusion

Two of Taiwan's biggest telcos have been hit with record fines after being found guilty of price collusion. The Fair Trade Commission has fined Taiwan's largest telco, Chunghwa Telecom, 40 million Taiwan dollars (US$1.25 million) and Taiwan Mobile, the third largest, NT$36 million ($1.13 million), for their joint 4G promotion in 2018. 

It found that staff at the two companies had exchanged information and agreed to stop giving away airtime discounts to mobile customers. Their actions had driven the other big operator, Far EasTone, to follow suit and also stop offering discounts.

"Such behavior has weakened price competition among each other and seriously affected market functions," the FTC said in its decision Thursday.

It argued that price was one of the main means of differentiation in Taiwan's mobile market, which had oligopoly characteristics and high service homogeneity. "If a single operator unilaterally stops giving away airtime discounts, there will be a risk of losing customers and market share," the commission said. 

"Both parties are major domestic mobile communications operators and have had a huge impact on the market," it added. Still, while the fine was the biggest ever for Taiwan, it is a light tax compared to some of the recent penalties slapped on Australian and Korean telcos. 

In May, the three Korean operators were fined a total of 33.6 billion Korean won (US$26 million) for massively over-stating their 5G network speeds. 

97% lower than advertised

They were advertising speeds of 20 Gbit/s when in fact they were delivering downlinks of 656-801 Mbit/s – around 97% lower. 

Last November, meanwhile, the three Australian operators copped total fines of 33.5 million Australian dollars (US$21.6 million) for misleading consumers over their NBN services. 

Regulator ACCC, which had filed suit in the federal court, said the three had admitted to making misleading statements over their 50Mbit/s and 100Mbit/s plans. 

Japan's KDDI, while not committing any wrongdoing, said it took a 15 billion Japanese yen (US$113 million) hit from the three-day outage that crippled much of its network last July. It had committed to compensating affected customersJPY200 ($1.50) each, with total damages expected to reach approximately JPY7.3 billion (US$50 million) 

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— Robert Clark, Contributing Editor, special to Light Reading