CWS fined for collusion |30 July 2022

• FTC wins big

By Patsy Canaya

Cable & Wireless (Seychelles) Limited has been fined the sum of R800,000 for collusion after the Board of Commissioners of the Fair Trading Commission ruled it had breached Section 11(2) (a) of the Fair Competition Act 2009, for directly fixing a purchase or selling price.

The historical ruling, the highest fine ever imposed by the Board of Commissioners, was published yesterday after a two-year investigation by the Fair Trading Commission (FTC), which started in 2016, and a four-year hearing, before the board could give its ruling.

The case dates back to 2014, and it came about from a request for approval that was received and co-signed by Cable & Wireless (Seychelles) Limited and Airtel (Seychelles) Limited to introduce a separate interconnection rate to be charged for transit incoming international voice calls, to the Department of Information Communication Technology (DICT).

According to the ruling, the proposed international termination rate was to take effect on March 1, 2014, but the agreement has never been implemented.

It was DICT which referred the submission to the FTC in a letter dated March 24, 2014, as it felt the interconnection would have an adverse impact on the Seychelles’ telecommunication sector.

DICT’s witness at the hearing explained it would be detrimental as this would prevent different operators from negotiating their rates and would affect competition in the country.

FTC, which is the authority mandated to enforce the Fair Competition Act, 2009 carried out an investigation during a two-year period and saw it fit that a case be brought.

Following its enquiry, Airtel Telecom (Seychelles) Ltd admitted to the breach of the Fair Competition Act 2009, and submitted to a voluntary undertaking with the Commission, meaning it gave its commitment to confirm the conduct to the Fair Trading Competition.

Airtel Telecom admitted that an agreement was submitted to DICT in February 2014 to fix international rates. The company also agreed not to collaborate with Cable & Wireless (Seychelles) Limited in pursuit of an international termination rate.

The agreement with FTC was signed on April 5, 2016 and endorsed by the chairman of the Board of Commissioners on April 26, 2016.

Subsequently the matter came before the Board of Commissioners for a hearing on August 31, 2016.

Speaking to Seychelles NATION, the chief executive of the FTC, Francis Lebon, said this was one of the most complicated cases ever investigated by the commission.

“It was one of the most complex cases for us, in terms of work. We had to call in many witnesses and had to prepare eight verbatim altogether. It was very complicated and we used all the evidence at our disposal to prove the breach of the fair competition Act,” he said.

Although Cable & Wireless (Seychelles) Limited had argued that it was just a proposal, and that DICT could have approved or rejected it, FTC maintained in its argument that it was collusion, between the two telecommunication companies.

The Board of Commissioners imposed a financial penalty of R800,000, to be paid to FTC within three months after the ruling. Failure to do so will lead to an additional penalty of R400,000.

“It was a very heated hearing and the ruling speaks for itself. I think the Board’s decision sends a strong message that FTC can detect and prosecute collusion cases. But this is an area where we need to beef up capacity-building. The officers at DICT could spot this and forwarded it to us because they had the training,” said Mr Lebon.

All parties have been served with the ruling, which has also been published on FTC’s facebook page and website.

According to Cable & Wireless (Seychelles) Limited a press release would be issued on the matter but at the time of going to press Seychelles NATION had not received any statement from the company.

It should be noted that this was the Board’s final ruling as its mandate has ended now that a new Act will be coming into force on August 1, 2022.

Cable & Wireless (Seychelles) Limited was presented by lawyer Alexandra Benoiton.