Aardvark News - Xtra found 'not guilty'

Commerce Commission decision "no surprise" says Voyager
Copyright © 1997 to 7am News

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30 May 1997

The Commerce Commission has announced the results of its investigations into allegations of predatory pricing by Telecom's Internet company, Xtra.

Speaking from Australia, Voyager's new general manager David Mackey said that the Commerce Commission's findings were "no surprise". The not guilty verdict from the Commission will not affect Voyager's intention to pursue the matter through the courts. The first hearing of the action brought against Xtra by Voyager should occur in July.

In its announcement, the commission found that Telecom was not in breach of the act for a number of reasons.

The reasons given in the report to back its findings are:

Telecom does not appear to be using a dominant position to harm competitors - other firms which are not dominant but are otherwise in similar circumstances, could profitably adopt a similar strategy

The strategy does not depend for its success on driving other firms from the relevant markets, but rather in developing value-added services, such as advertising, entertainment, gaming and electronic commerce

In accordance with its strategy, Telecom has every incentive to keep its access prices as low as possible to encourage the market to expand more rapidly

Low entry barriers suggest that the competitive process in the relevant markets is less likely to be harmed - significantly, Clear has entered the market since Telecom reduced its Internet access prices and Telstra has announced that it will enter the market

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