ACCC launches court action against Telstra

AAP General News (Australia)
12-24-1998
ACCC launches court action against Telstra

SYDNEY, Dec 24 AAP - Telecommunication giant Telstra Ltd could face fines of around $50
million, following court action begun today by Australia's competition watchdog, which alleged
anti-competitive behaviour.

In what would be a David and Goliath battle, the Australian Competition and Consumer
Commission (ACCC) initiated proceedings in the Federal Court.

The ACCC alleged Telstra transferred customers to other service providers such as Optus and
AAPT in an anti-competitive way, ACCC chairman Alan Fels told AAP.

Earlier this year, the ACCC used new powers to issue a competition notice to Telstra over
the way it transfered customers.

Professor Fels said he had taken the court action because Telstra had ignored a notice to
stop its alleged anti-competitive behaviour by December 9.

"What's required in the industry is competition, what's required is that consumers get
choice in telephone services," he said.

"They won't get it if anti-competitive behaviour by Telstra occurs."

Telstra would be fined $10 million for each charge and $1 million a day for every day it
disobeyed the ACCC's orders if the ACCC won the court action, amounting to at least $50
million, he said.

Telstra spokesman Steve Wright said the company would fight the charges.

The company, which posted a record corporate profit of $3 billion in 1996/97, will be
drawing on far greater resources than that of the ACCC.

But Professor Fels said the ACCC had won 135 of its last 140 cases.

Mr Wright said the company did not turn a profit from the activity, charging $15 per
customer.

"The fact that we charge for it does not amount to anti-competitive behaviour, therefore
there's no breach of the Trade Practices Act," Mr Wright told AAP.

Mr Wright said complaints to the ACCC were made by Telstra's competitors, not the general
public.



(AAP Information Services owns 19.9 per cent of AAPT.)

AAP cm/trm

KEYWORD: TELSTRA ACCC LEAD

1998 AAP Information Services Pty Limited (AAP) or its Licensors.