Telecoms regulator Ofcom has launched a probe into whether BT Group is abusing its dominant position when pricing its superfast broadband, following a complaint by smaller rival TalkTalk Telecom Group.
Ofcom said it was in the early stages of an investigation into BT.
BT, the biggest fixed-line operator in the country, allows rival operators to take its superfast fibre product on a wholesale basis at the same fee at which it sells it to its own retail arm, BT Retail.
TalkTalk has complained that there is not a large enough gap between the wholesale price and the rate at which BT sells the product to retail customers, squeezing margins for competitors.
"BT is disappointed that Ofcom has opened the case despite the lack of any evidence. We are confident there is no case to answer," BT said in an emailed statement.
(Reporting by Kate Holton, Paul Sandle and Richa Naidu; Editing by Rodney Joyce)