ANACOM imposes fines of over EUR 15 million for price changes without appropriate communication

ANACOM decided to apply fines of over EUR 15 million to the four main electronic communications operators, MEO, NOS, Vodafone and Nowo, for having adopted a conduct likely to breach the legal rules applicable to the communication of changes in contracted prices for a large number of subscribers, which resulted in the commission of serious administrative offences, and for failing to provide information to ANACOM.

MEO was fined EUR 6.677 million, while NOS was fined EUR 5.2 million and Vodafone EUR 3.082 million. Nowo was fined EUR 664 thousand.

More specifically, the conduct adopted by these operators relates to the failure to inform subscribers, within the contractually prescribed period, of their right to withdraw from their contracts free of charge if they do not agree with the price increase proposed by operators. The issue at stake also relates to the failure to communicate the proposed price increase in an appropriate manner given that, in some cases, the specific amount of the increase was only made known to subscribers long after they had been informed that prices would increase and, in other cases, the actual amount of the proposed increase was not made available in the manner and place indicated in the communication of the contractual alteration. In the case of NOS, subscribers were also not informed of the proposed price increase at least 30 days in advance.

These unlawful behaviours adopted by operators led ANACOM to determine, by decision of 13.07.2017, that companies should send written communications, within a maximum period of 30 working days, to subscribers affected by contractual changes introduced at the initiative of the company after the entry into force of Law No 15/2016, of 17 June, who, on the date on which those changes were communicated, were bound by a contract subject to a loyalty period or any other lock-in commitment, where  this contract remained in force, with the same loyalty or lock-in commitment (still in force), on the date on which that decision was implemented.

The standardised conduct adopted is particularly burdensome, given that obligations to provide information on subscribers’ right to withdraw from their contract without penalty, within the period laid down in the contract, and to communicate, in an appropriate manner, any contractual alterations which the service provider intends to introduce ensure that end-users are able to take a free and informed decision as to whether to continue with their contract and are able to switch to another operator offering better contractual conditions, or at least the same conditions as before the amendment to the contract, and thus to benefit from a truly competitive market.

Another issue at stake is the protection of the legal certainty of subscribers under the conditions initially contracted, given that, by allowing subscribers to terminate their contracts, free of charge, if they do not accept the proposed changes, it ensures the protection of the weaker party in the contractual relationship and prevents subscribers from being subject to obligations they did not sign up to and do not agree to.

The application of these penalties comes at a time when ANACOM, faced with increased inflationary pressures in Portugal and the consequent rise in the cost of living, has addressed several recommendations to operators, in order to mitigate the impact of price revisions on households and improve the conditions of the offers, ensuring effective access to the service by end users of these services.

Price changes / increases is one of the widest complaints in the sector and will be closely monitored by ANACOM with a view to ensuring compliance with the contractual rules associated with existing commercial relations between companies and consumers.