First enforcement decision under Moroccan competition regime

Posted in Competition Northern Africa Blog post

On 17 January 2020, the Agence Nationale de Réglementation des Télécommunications (ANRT), the Moroccan telecoms regulator, imposed a fine of MAD 3.3bn (approx. USD340m) on Maroc Telecom, the incumbent telecoms operator, for failing to unbundle the local loop. As the first enforcement decision under the Moroccan competition regime, the decision is far-reaching in imposing close to maximum fines and for sweeping aside material procedural challenges (including the retrospective nature of the competition regime). It remains to be seen whether the Conseil de la Concurrence (CC), the Moroccan competition authority, will employ a similar approach in applying competition law in other sectors.

While a new competition law was enacted in 2014, Morocco’s new competition regime only became fully operational in December 2018 with the appointment of the new members of the CC after a long transitional period. While the CC is the main authority responsible for the enforcement of the prohibition of restrictive practices and abuse of dominance, the Moroccan competition regime provides for sector regulators, such as the ANRT, to have exclusive jurisdiction to enforce the competition law in their respective sectors. The ANRT was granted the power to enforce the competition law in May 2016 with the publication of the Decree n°2-16-347.

The ANRT’s investigation into Maroc Telecom was triggered by a complaint from WANA, a local Telecom operator, in the wholesale market for access to local loop facilities. In accordance with the Moroccan telecoms regulation, operators owning such facilities were required to unbundle the local loop with effect from 2008 in order to allow other operators the opportunity to offer their own fixed line services (voice and Internet) to customers. In repeatedly designating Maroc Telecom as an operator of a public telecom network exercising a significant influence on this market, the ANRT had required Maroc Telecom to grant access to its physical local loop facilities on a transparent and non-discriminatory basis.

In agreement with the complainant, the ANRT found that Maroc Telecom had abused its dominant position by frustrating the unbundling of the local loop facilities. It was found that Maroc Telecom had implemented a range of practices from 2013 to 2018, which undermined the effectiveness of local loop unbundling. These practices included the discriminatory exclusion of certain telephone lines, unreasonable delays in conducting necessary feasibility studies and providing access to its sites, unreasonable management of technical incidents, margin squeeze, unjustified delays in providing necessary technical information and the discriminatory limitation of unbundling orders.

As it considered that Maroc Telecom’s practices have hindered competition on the markets for fixed line services (voice and Internet), the ANRT imposed a fine of MAD 3.3bn on Maroc Telcom. The level of this fine almost corresponds to the maximum fine possible under Moroccan competition law, which permits fines amounting to 10% of worldwide turnover.

Maroc Telecom is required to remedy the practices identified in the decision within specified deadlines. For example, it must conduct feasibility studies for requests for colocation of sites within 30 calendar days. In the case where the deadlines are exceeded, Maroc Telecom is further liable for a daily penalty of MAD 4m (approx. USD 400,000).

The ANRT rejected a number of procedural arguments advanced by Maroc Telecom. These arguments included Maroc Telecom’s contention that the ANRT’s enforcement powers had not been lawfully granted and that ANRT could not be prosecutor and adjudicator in its own matter. Most notably, the ANRT did not address concerns relating to the retrospective punishment of conduct dating from 2013 given that it only acquired its enforcement powers in May 2016.

The ANRT’s decision may not be the last development in the matter as it is not yet confirmed whether Maroc Telecom will appeal the matter to the Rabat Court of Appeal. Separately, the Rabat Commercial Court had been due to deliver its judgment in WANA’s damages claim against Maroc Telecom when WANA withdrew its claim on 20 February 2020.

The ANRT’s decision potentially sets the tone for competition enforcement in Morocco. In a marked contrast to first enforcement actions in other African jurisdictions, this matter stands out not only for the material level of fines imposed on Maroc Telecom but also the complexity of matter relating to abuse of dominance. It remains to be seen whether the CC will employ a similarly robust approach in applying competition law as part of ongoing investigations into other sectors.

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