Dominant positions are always welcomed in businesses but you’ve got to be careful if you are against Vodafone, even for a decade old foul. If you doubt on me, ask the Spanish giant Telefonica.
Following decision given by Spain’s Supreme Court in May 06, Vodafone has filed a case on Telefonica to Madrid court with a claim of 670 million Euros (around $940 million) in damages, the company official revealed. Spain’s supreme court upheld Vodafone’s complaint in May 2006 but it did not rule on the amount of financial compensation which Telefonica should pay.
The Spain court’s ruling follows a complaint by Vodafone that the former state monopoly abused its dominant market position by preventing Airtel — which Vodafone acquired in 2000, from expanding its business in Spain through unfair competition practices between 1995 and 1999.
Vodafone alleged Telefonica of bullying cell phone retailers into signing exclusivity contracts that prevented Airtel from acquiring new subscribers via a channel that, in the late 1990s, accounted for more than 50 per cent of handset sales.
Coming to this year, in July, the Madrid court asked Telefonica to present its arguments and it expects to issue a ruling by the end of the year.
Now that Vodafone has filed the damages, it expects a final decision on the matter in 2-3 years if an appeal to higher court is preferred by Telefonica, who have reported 23.2 million customers last year in comparison to that of Vodafone’s 15 million.
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