The Jersey Competition Regulatory Authority (JCRA) has found that JT engaged in a margin squeeze, to the detriment of its competitors and consumers, during a 13-month period ending in February 2020.
Throughout that period, JT priced its wholesale services to other telecoms providers at such a level that these companies were restricted in their ability to compete with JT, limiting consumer choice and value.
In reaching its decision, the JCRA considered the degree of harm, actual or potential, caused by the contravention and that JT did not deal with the issue in a timely and effective way, even after the JCRA made JT aware of it.
The Authority has published an Initial Notice to impose a financial penalty of £40,000 on JT for the breach. The agreed level of fine being imposed is based on the amount of revenue JT earned from its broadband services during the relevant period.
Tim Ringsdore (pictured), Interim CEO of the JCRA, said: "This was a breach of JT's licence conditions and it is not the first time JT has been warned of engaging in margin squeeze.
"We consider the level of penalty to be appropriate. It is essential, for the maintenance of a healthy and competitive economy and to protect consumer choice and value, that activity of this nature is penalised.
"JT has accepted it breached its licence condition and has subsequently cooperated with the Authority in our investigation, and we have taken that into account in arriving at our conclusions."
A JT spokesperson commented: “Clearly, this decision comes as a disappointment to JT, but we fully accept JCRA’s conclusion. Our discussion with JCRA over the financial model used to regulate this market goes back over a number of years, and we hope it can be developed further in the future.
"Notwithstanding that, this particular issue comes from a genuine error on our part, and we have written to the group of customers involved to explain the situation to them. We will now be working with JCRA to ensure our processes are reviewed, to prevent any repeat.”
• The full text of the Initial Notice can be found here. JT has the right to make representations against the level of the fine, but not the decision that it acted in contravention of its licence.