UPC fined HUF 121 million for serious infringement
The telecommunications company launched its service prematurely in Cegléd as previously in Jászberény
On 28 December 2017, the National Media and Infocommunications Authority (NMHH) imposed a fine on UPC Magyarország Telekommunikációs Kft. due to unauthorised service provision. With a view to the principles of progressiveness and proportionality, the Authority set the fine at HUF 121 million to make sure it substantially exceeds the financial advantage gained from the infringement. Thus the sanction effectively reminds market operators that it is not worth deviating from communications regulations on purpose.
The NMHH concluded that an infringement occurred due to the unlawful putting into use of the communications—internet, cable television and telephone—network established in Cegléd. Two years ago, on 2 September 2015, UPC launched its service without waiting for the completion of its newly established network on the 27th day of its deployment and kept it in operation for more than two years even though it failed to submit the required notification. The service provider only fulfilled its notification obligation after having been requested by the Authority and then was so late in submitting the information missing from the notification that the NMHH was only able to register in on 28 September 2017. Since UPC launched its service without the Authority’s authorisation, the NMHH was denied the opportunity to check whether the network complied with regulations in technical terms and its implementation was legally sufficient. Thus, this conduct enabled the service provider to acquire new customers and have them bound, even by loyalty period, thereby gaining a significant and unlawful advantage over its competitors in the market, while the interests of subscribers suffered.
This is not the first time that the service provider is engaged in unlawful conduct as the HUF 30 million fine imposed on UPC due launching its electronic communications service (cable television) in Jászberény without authorisation became final and enforceable through court judgment passed on 7 April 2017. With a view to the principles of progressiveness and proportionality, the NMHH, when setting the amount of the recent fine, considered it an aggravating circumstance that the service provider could be certain about committing an infringement in Cegléd with the case in Jászberény in mind, still it deliberately continued its infringing practice until September.
When setting the amount of the fine, the NMHH took into account the service provider gained a significant financial advantage of the same order of magnitude as the fine during the prolonged period of infringement, thereby upsetting the level playing field for market operators and jeopardising the interests of subscribers. The Authority aims to ensure that it is not worth for the service provider to deliberately violate the provisions laid down clearly in the relevant communications legislation and other market operators also maintain a lawful and ethical conduct. The amount of the fine, however, should not prevent the fined company from conducting its business activities; still, the Authority should have the option to raise the amount in line with the principles of progressiveness and proportionality if another infringement occurs.
UPC had many options to act lawfully. The NMHH specifically drew the service provider’s attention to legal requirements on time and the company could have come up with a solution that, for example, would have allowed it to notify the Authority of the network construction in stages in accordance with its intended timeline for launching the service. With its current decision, the Authority wants to emphasise that service may only be launched on a newly constructed network after having obtained an authorisation for putting into use from, or having the subsequent notification registered by, the NMHH.
The NMHH’s decision is not yet final and enforceable: UPC has 15 days from the communication of the decision on 28 December 2017 to appeal.