€300,000 fine for telco that didn't want to say goodbye to business customers

Dutch telco KPN is facing the mammoth fine after failing to comply with orders from the country's consumer watchdog.
Written by Martin Gijzemijter, Contributor
Netherlands telco KPN is facing a €300,000 fine. Image: KPN

The Netherlands' largest telco KPN is facing a €300,000 fine after failing to comply with an order from the country's consumer watchdog to let business customers end their contracts without charge.

The Netherlands Authority for Consumers and Markets creates (ACM) is seeking the fine from Dutch incumbent KPN after the company failed to properly implement changes that ACM ordered last year.

In December, ACM mandated that KPN give a group of business customers the opportunity to end their phone plans free of charge, after the watchdog learned that KPN had unilaterally moved customers onto different plans with entirely different conditions.

Since the new conditions were not demonstrably beneficial to the subscriber, law dictated that KPN had to give the affected customers the possibility to terminate their contract free of charge, or face the €300,000 fine.

To comply with the changes ordered by ACM, KPN contacted its subscribers to inform them about the possibility of terminating their plans free of charge in late December last year but, according to ACM, the company tried to prevent subscribers who wished to do so from actually terminating their plans.

ACM said that the company did so by providing them with false information, stating that it was not possible to maintain their phone number when switching to a new provider, when in fact it was.

As a result, the watchdog believes that KPN has actively tried to prevent the subscribers from switching to another provider, and in doing so has failed to comply with its orders — leading to the €300,000 fine.

KPN told ZDNet that "had taken note of the fine, and is currently looking into it".

The fine will weigh heavily on KPN, which saw its turnover drop from €152m in the first quarter of 2013 to €3m in the first quarter of 2014, only staying in the black due to taxes that turned out to be €5m less than the company had anticipated.

The company recently fought off a takeover bid from America Movil, owned by Mexican billionaire Carlos Slim, after the independent foundation behind the telco exercised its right to issue itself 4.3 billion extra shares. America Movil subsequently moved to acquire Telekom Austria.

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