(MADRID) - Spain said Tuesday it had appealed a fine of 151.8 million euros (219 million dollars) imposed by European Union antitrust regulators on Telefonica for uncompetitive practices.

The purpose of the appeal is to defend Spain's antitrust authorities and their regulation of the telecom industry, not to defend the telecommunications operator, the industry and commerce ministry said in a statement.

"The supposed activities against competition on the part of Telefonica had been validated by (Spanish telecom watchdog) CMT, which approved them because they were not against competition," it said in a statement.

By making the Spanish telecom watchdog's ruling invalid, "the decision by the EU creates judicial insecurity, affects both the public interest and the development of the strategically important telecommunications sector," it said.

The European Commission imposed the fine on July 4, saying Telefonica had abused its dominant position by setting wholesale prices for rival broadband providers that squeezed their margins between Spetmeber 2001 and December 2006.

The fine is the largest ever imposed on a telecoms operator in Europe and the second largest the Commission has imposed for abusing market strength after hitting Microsoft with a penalty of nearly half a billion euros in 2004.

Telefonica, a former state monopoly, has also appealed the fine, arguing it was "unjustified and disproportionate, both legally and economically."

In 2003, EU regulators levelled fines of 12.6 million euros against Germany's Deutsche Telekom and 10.3 million euros against France Telecom's Internet unit Wanadoo, for abusing their dominant positions.

EU Competition Commissioner Neelie Kroes has justified the much larger fine for Telefonica on the grounds that the penalties imposed on Wanadoo and Deutsche Telekom for similar behaviour had not acted as enough of a deterrent.

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