Telecom companies need to pay consumers back for illegal price hikes, says authority

Consumers need to be compensated for the price hikes allegedly coordinated by the three major telecom companies Vodafone, Mobinil and Etisalat, the Consumer Protection Authority (CPA) urged the National Telecom Regulatory Authority (NTRA) on Monday.

The consumer authority asked the NTRA to start putting a compensation plan together.

The Competition Authority (CA) referred the three telecom giants to the prosecutor general after receiving complaints in October that accused the companies of simultaneously imposing stamp tax on cards used to recharge phone credit in March 2013, costing consumers more than half a billion pounds extra per year.

Authority head Mona al-Garf clarified that imposing a stamp tax is not an offense in itself, but the coordination between the companies to raise prices violates the Competition Law.

Head of CPA Atef Yaacoub said that the three companies should stop imposing new stamp taxes on consumers and restore the old prices on the prepaid cards. He added that the CPA is coordinating with the "Citizens against Inflation" group to file a lawsuit against the companies to force them to return the money they illegally gained through that action, the state-owned Middle East News Agency (MENA) reported.

Yaacoub hailed the CA's decision to refer the three companies to the prosecution, adding that the decision was the result of a complaint first presented to the CA by the CPA 14 months ago, out of a firm belief that such practices harm fair competition and ultimately harm consumers.

The companies previously kept consumer prices low by footing the tax themselves, but later allegedly conspired to impose increases at the same time without notifying the National Telecom Regulatory Authority.

The Competition Authority carried out its own investigation into the matter, and concluded that the three companies were guilty of "criminalized agreement." The authority referred the case to the prosecution for criminal investigations.

The companies now have the option of reconciliation with the Competition Authority and paying a fine, or going through judicial procedures.

Early in the year, the authority referred two of the companies, Mobinil and Etisalat, to the financial and commercial prosecution in February 2013 for failure to cooperate and provide requested documents.

Representatives from the three companies told the state-owned newspaper Al-Ahram that they received the approval of National Telecom Regulatory Authority before imposing the new tax, and that they have yet to receive any formal notification from the prosecution about the case.