Brussels sees risks in Telefónica/Canal Plus deal

The European Commission (EC) has expressed concerns about the Telefónica-Canal Plus operation to set up a single pay TV company, 100 per cent controlled by the Spanish dominant telco operator.

In a document sent to the Spanish regulator CNMC, Brussels claims that the operation is likely to have a negative impact on the competition in the pay TV market as both combined would control a market share of over 80 per cent. For the EC, the four markets to be affected by the operation would be pay TV, TV rights (above all to sport events and cinema), TV distribution and sales of added-value telco services.

The Spanish competition watchdog CNMC will be responsible for the final decision. Recently, the CNMC launched an in-depth antitrust investigation into Telefónica’s acquisition of Canal Plus, also amidst signs of lack of competition in the market on the grounds that the deal “could significantly hinder competition in the markets related to pay TV, audiovisual content and electronic communications services”.

In May, media group Prisa agreed to sell 56 per cent of DTS, known as Canal Plus in Spain, to Telefónica in a deal that would give it full control over the TV group. With the deal, Telefónica would become the number one in pay TV with more than 3 million subscribers way ahead of Vodafone-ONO with 700,000 customers.

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