Investigation into increase of wholesale price by Vodafone
October 25, 2002
Outcome of investigation
Following its investigation, the Competition Authority (“the Authority”) found insufficient evidence to show that Vodafone Ireland Limited’s (Vodafone) decision to increase the wholesale price of Etop-up amounted to an abuse of a dominant position. The Authority therefore closed its investigation.
Outline of case
The Authority’s investigation was prompted by 30 complaints that Vodafone was abusing its alleged dominant position by reducing margins for retailers when they were selling Vodafone Etop-ups.
The complaints concerned the decision by Vodafone to increase the wholesale price charged to electronic terminal service providers. This led to a margin reduction for retailers from 10% to 6.5%. The complainants claimed that the reduction in these margins would lead to a reduction in retailers’ profits to the extent that the overall number of retailers in the State would fall, resulting in a lessening of competition in the grocery trade.
Following its investigation, the Authority found insufficient evidence to show that Vodafone retailer margin levels were excessively low or that the predicted reduction in retailer profits from top-up products would lead to a decline in competition. The Authority felt that retailers can themselves charge a fee for the provision of top-up services. The Authority was therefore of the view that Vodafone’s actions in increasing the wholesale price of Etop-up would not ultimately cause consumer harm.
Based on these views the Authority decided that in its view the increase in the wholesale price, and resultant reduction in retail margins by Vodafone did not breach competition law. The Authority therefore closed its investigation.
To learn more on this case read our Enforcement Decision Note regarding the increase in the wholesale price of electronic top-up by Vodafone Ireland Limited.
Section 5 of the Competition Act 2002
Article 102 of the Treaty on the Functioning of the European UnionReturn to Closed Investigations