Commerce Commission decision "no surprise" says Voyager
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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,
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
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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