The regulator has imposed “urgent interim measures” on Eircom to halt the offer, which has been available since last Monday.
Eircom has been told to stop registrations for the promotion on its website, stop delivery of any leaflets with information about it and other marketing activities, and ensure all its agents stop promoting it as well. People who have already registered for the promotion this week can still receive the €50 gift card, however.
ComReg has taken the action because it was never notified about the promotion, and has concerns it would not meet the requirement for approval.
The regulator received a formal complaint from a retailer last Friday about the Open Eir promotion. The complainant said there had not been enough industry consultation or notice, and that the promotion would disproportionately benefit Eircom’s retail division as customers would be inclined to search for “Open Eir” and land on its website.
In a letter to retailers, the Open Eir team had said “we are targeting premises that have fibre to the home available in low-penetration areas”. ComReg says that based on its initial analysis of the Eircodes that were included, “the promotion is targeted at existing Virgin Media Ireland customers and footprint”.
The regulator contacted Eircom after it received the complaint, and spoke to the company’s chief regulatory officer Kjeld Hartog. He expressed the view that ComReg did not need to be told about the €50 offer because it was not a “wholesale promotion”.
The regulator does not agree with this interpretation, and believes the promotion “risks creating serious economic or operational problems for other providers of electronic communications networks or services”, and that urgent interim measures are needed.
Regulator has acted on a complaint from a retailer about OpenEir
Today’s News in 90 Seconds – Friday, October 17
It said in a ruling posted online today that it was not relevant the price reduction being offered by Eircom was in the form of a gift card granted to a retailer’s customer rather than to the retailer directly.
It also said that a discount targeted to an area where a rival has just deployed, or is deploying, a network can stop efficient investment, undermining the prospect of economically efficient network competition.
“The requirement that Eircom obtain ComReg’s prior approval in advance of implementing a wholesale promotion or discount, so that ComReg can ensure that the discount or promotion will not have anti-competitive effects in the market, is a cornerstone of Wholesale Local Access (WLA) regulation and an essential requirement in ensuring fair competition,” it said.
“Eircom’s failure to pre-notify ComReg means that there has been no economic assessment of the promotion and no assurance that no anti-competitive effects will arise from the implementation.
“Implementation by Eircom of the promotion without prior approval risks creating serious economic problems for alternative network providers by Eircom unfairly enticing end-users away from their networks, thereby strengthening its market position and foreclosing the market further.”
Eircom has been contacted for comment.