Authority: Bezeq May Have Violated Israel's Antitrust Law

Israel Antitrust Authority plans to summons officials for a hearing over whether Bezeq's pricing plan deterred customers from using other telephony services.

The Israel Antitrust Authority announced on Monday that it is planning to summon Bezeq officials for a hearing to determine whether the company has been abusing its position as a monopoly in violation of the Antitrust Law.

The authority claims Bezeq used a pricing policy that violated the law.

This is how it worked, they say: Whoever wanted to connect a home phone from a Bezeq competitor using voice over broadband (VOB) technology – such as 012 Smile or 013 Netvision – was required to pay NIS 25 a month for the ADSL infrastructure.

By contrast, customers who installed a Bezeq home phone were offered the same ADSL line and 200 minutes of monthly phone service, for only NIS 19.90 a month. Such pricing left a customer no incentive to buy telephony services from competing service providers.

“Bezeq was declared a monopoly in both the Internet and telephony fields,” explained the authority. “During the first quarter of 2011, Bezeq advertised a deal under which consumers who wanted to order a phone along with Internet infrastructure would get 200 minutes of talking time at NIS 19.90 a month. At the same time, from customers who only wanted an Internet line (“ADSL only”), it took an additional NIS 25 a month.

“To get Internet-based telephony service (VoIP or VoB) the customer has to buy Internet infrastructure, and thus a ‘negative’ price gap developed in which the price of Internet infrastructure alone was higher than the price of Internet infrastructure plus a phone line. Such pricing puts competing telephony operators in an inherently inferior competitive position,” the authority stated.

It should be noted that in March 2012, the Communications Ministry forbade Bezeq from charging customers the NIS 25 for the ADSL line.
 

Bezeq Israeli Telecommunication Corp. headquarters in Tel Aviv, Israel.
Bloomberg