The President of the Office of Electronic Communications Magdalena Gaj imposed on TelePolska Sp. z o.o. a financial penalty in the amount of PLN 1 936 840,10 for concluding initial agreements with consumers for the period longer than 24 months.
Under Article 56 (4a) of the Telecommunications Act, the validity period of an agreement for the provision of telecommunications services concluded by consumers for a definite period of time may not be longer than 24 months. This rule derives from the Directive of the European Parliament and of the Council of 7 March 2002 on universal service and users' rights relating to electronic communications networks and services and aims at facilitating switching between service providers.
In national legislation this provision was introduced under the Act of 16 November 2012 on amendment to the Telecommunications Act and certain other acts (Journal of Laws of 2012, item 1445) and entered into force on 21 January 2013. Starting from that date it should be therefore applied by virtue of the law to all newly concluded agreements for the provision of telecommunications services.
Failure to meet the obligation defined in Article 56 (4a) of the Telecommunications Act, by concluding after 21 January 2013 initial agreements for the period longer than 24 months, constitutes an act which is subject to financial penalty under Article 209 (1) (13a) of the Telecommunications Act.
During mediation and intervention cases, the President of UKE found that TelePolska
Sp. z o.o. continued to conclude initial agreements with consumers for a definite period of time longer than 24 months (i.e. for 26 months) still after amendment to the Telecommunications Act. In view of the breaches to the Telecommunications Act found, the President of UKE launched administrative proceedings ex officio on the imposition of a financial penalty on TelePolska.
The analysis of clarifications and documents submitted by the company shows that between 21 January 2013 and 13 May 2013 TelePolska concluded agreements with more than 6,000 subscribers who were predominantly concluding their first agreement for the period of 26 months.
The activities of TelePolska that remained in contradiction to the existing law, consisted in prolongation of the agreement period during which the subscribers had to pay contractual penalties if they wanted to switch to another service provider. This breach was intentional and concerned the whole group of consumers. It was not a result of the company’s incidental error. This factor as an element to assess the scope of the breach had a direct impact on the level of the financial penalty.- Due to weaker position of consumers in their relations with telecommunications undertakings I attach special importance to the enforcement of consumer rights
- the President of UKE Magdalena Gaj
said. - In this case the breach affected from 10 to 20 per cent of all TelePolska subscribers and it addition it refers to one of the basic rights to switch between service providers. This right ensures that the users derive maximum benefits in terms of choice, price and service quality. Illegal limitation of the possibility of free choice of service providers also distorts equal competition in the telecommunications market -
the President of UKE added.
Having analysed the evidenced gathered in the case, the President of UKE settled the amount of the penalty at the level of PLN 1,936 840,10 (in words: one million nine hundred thirty six thousand eight hundred forty zloty and 10 gr), which constitutes 2.5% of the company revenue earned last year.
When settling the amount of the penalty the President of UKE took account in particular of the negative attitude of the company to its statutory duties, which had a direct and unfavourable impact on the position of TelePolska subscribers. The company, despite a clear position of the President of UKE presented during mediation and intervention proceedings, continued its illegal practices.
Only as a result of swift action of the President of UKE and the prospect of a financial penalty it was possible to eliminate the risk of infringements upon consumer rights. After 3 months from launching the procedure in order to impose a financial penalty TelePolska informed the President of UKE of taking remedial actions (the company assured the President of UKE of shortening the duration of agreements from 26 to 24 months). In other words, TelePolska needed half a year from the introduction of amended Telecommunications Act in order to ensure that its consumers could fully enjoy the rights available to them under the law as early as from 21 January 2013 when concluding initial contracts.
At the same time, the President of UKE found no grounds to withdraw from the imposition of this penalty. Under the Telecommunications Act the penalty may be also imposed if an entity ceased to violate the law or relieved the damage caused if the President of UKE finds that the duration, scope and consequences of that violation justify so.
The decision on the imposition of a financial penalty is subject to appeal to the District Court in Warsaw - Court of Competition and Consumer Protection submitted via the President of UKE within two weeks of the date of decision delivery.