The European Commission has sent a Statement of Objections alleging that multinational telecommunications company Altice breached the EU Merger Regulation by implementing its acquisition of telecommunications operator PT Portugal before notification or approval by the Commission. Altice does not agree with the Commission’s preliminary conclusions, and will submit a full response to the statement of objections and contest all the objections
Commissioner Margrethe Vestager, in charge of competition policy, said: “If companies jump the gun by implementing mergers prior to notification or clearance, they undermine the effective functioning of the EU merger control system. The Statement of Objections sent to Altice shows how seriously the Commission takes breaches of the rules designed to protect the merger control system.”
The EU’s Merger Regulation requires that merging companies notify transactions prior to their implementation (the notification requirement), and do not implement transactions unless and until they have been notified and cleared by the Commission (the standstill obligation). The obligation to notify concentrations prior to their implementation safeguards the Commission’s ability to detect and investigate concentrations. The standstill obligation prevents the potentially negative impact of transactions on the market, pending the outcome of the Commission’s investigation. The early implementation of transactions in breach of EU merger review procedural obligations is a very serious infringement, as it undermines the effective functioning of the EU merger control system.
According to the Commission, compliance with these obligations is essential for legal certainty, enabling it to conduct a correct analysis of the impact of mergers in the market and prevents the potentially detrimental impact of transactions on the competitive structure of the market. In this way, market forces work for the benefit of consumers.
In February 2015, Altice notified the Commission of its plans to acquire PT Portugal. The Commission cleared the transaction subject to conditions on 20 April 2015.
In today’s Statement of Objections, the Commission takes the preliminary view that Altice actually implemented the acquisition prior to the adoption of the Commission’s clearance decision, and in some instances, prior to its notification. In particular, the Commission considers that the purchase agreement between the two companies put Altice in a position to exercise decisive influence over PT Portugal before notification or clearance of the transaction, and that in certain instances Altice actually exercised decisive influence over PT Portugal.
Such behaviour, if established, would be in breach of the company’s obligations under the EU Merger Regulation to respect the notification requirement and the standstill obligation. The sending of a Statement of Objections does not prejudge the final outcome of the investigation.
If the Commission were to conclude that Altice did implement the transaction prior to its notification or prior to adoption of the clearance decision, it could impose a fine of up to 10 per cent of Altice’s annual worldwide turnover.
In a Statement, Altice noted that after having approved the acquisition of PT Portugal by Altice, the European Commission initiated an investigation into infringement by Altice of the obligation of prior notification of concentrations under Article 4(1) of the Merger Regulation and/or of the stand-still obligation laid down in Article 7(1) of the Merger Regulation.
“The European Commission has issued today a statement of objections informing Altice of the objections raised. Altice does not agree with the European Commission’s preliminary conclusions, and will submit a full response to the statement of objections and contest all the objections. The sending of a statement of objections does not prejudge the final outcome of the investigation,” it stated.
The investigation proceedings do not affect the approval granted by the European Commission for the acquisition of PT Portugal by Altice.