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European telecoms firms raided in antitrust investigation

EU watchdog launches inquiry after complaint from US-based competitor

Brussels' competition watchdog has raided the offices of three of Europe's largest telecoms groups as part of an investigation into whether they are limiting customer access to services such as Skype and YouTube.

The offices of Deutsche Telekom, France's Orange and Spain's Telefonica were searched after a complaint by an unnamed US-based competitor.

The raids, which started on Tuesday, will help the European Commission to decide whether these operators are "throttling" services that use large amounts of data.

It has estimated that some 100 million Europeans have faced restrictions on their internet usage.

"The commission has concerns that the companies concerned may have violated EU antitrust rules that prohibit the abuse of a dominant market position," it said in a statement.

"Unannounced inspections are a preliminary step into suspected anti-competitive practices.

"The fact that the commission carries out such inspections does not mean that the companies are guilty of anti-competitive behaviour, nor does it prejudge the outcome of the investigation itself."

Companies can be fined as much as 10 per cent of their global turnover for breaching EU antitrust rules, although there is not yet any suggestion that the raids will lead to the imposition of financial penalties.

"Orange is co-operating fully with the European Commission's agents and at this stage Orange's practices haven't been incriminated," the company said in a statement.

Meanwhile, Deutsche Telekom said: "This market is dominated by major providers based in the United States, which means we are not the right target for these investigations. Deutsche Telekom is co-operating closely with the authorities to clarify the matter."

Finally, Telefonica added: "In relation to the inspections announced by the European Commission, Telefonica is closely co-operating with the commission."

Yesterday's news is not the first time European telecoms groups have been accused of market abuse by a company from across the pond.

Last year, the US internet company Cogent filed a case against Orange in France alleging that it was being overcharged for access to use the group's network. This was later dismissed.

Although the investigation is centred on the three companies, it could yet have wider implications for others across the industry.

Why throttle?

Bandwidth "throttling" describes the slowing of internet services by an internet service provider,

It can be used as a tactic to limit a user's upload or download rates, and often occurs at peak times, when many people are accessing the internet at the same time, and is used to provide a standard service to customers across the board, rather than allowing a lucky few users to hog the bandwidth at these times.

Some providers will also throttle your service if they think you are approaching your monthly limit.