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European Commission - Press release

Mergers: Commission alleges Altice breached EU rules by early implementation of PT Portugal acquisition

Brussels, 18 May 2017

The European Commission has sent a Statement of Objections alleging that multinational telecommunications company Altice (the Netherlands), breached the EU Merger Regulation by implementing its acquisition of telecommunications operator PT Portugal before notification or approval by the Commission.

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.

Compliance with these obligations is essential for legal certainty, enables the Commission 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% of Altice's annual worldwide turnover.



The Altice/PT Portugal merger case

On 9 December 2014, Altice entered into a transaction agreement with Oi, the Brazilian telecommunications operator which controlled PT Portugal, with a view to acquiring sole control over PT Portugal. On 25 February 2015, Altice notified the Commission of its intention to purchase PT Portugal. On 20 April 2015, the Commission adopted a clearance decision declaring Altice's acquisition of PT Portugal compatible with the common market, subject to conditions.

At the time of the notification, Altice's Portuguese subsidiaries Cabovisão and ONI were competitors of PT Portugal for telecommunications services in Portugal. The Commission had concerns that the merged entity would have faced insufficient competitive constraints from the remaining players on the market for fixed telecommunications. This could have led to higher prices for clients. The decision was therefore conditional upon Altice's divestment of both ONI and Cabovisão.

The ongoing procedure against Altice for early implementation has no impact on the Commission's April 2015 decision to approve the transaction, subject to conditions.

Procedural background

A Statement of Objections is a formal step in an investigation, where the Commission informs the companies concerned in writing of the objections raised against them. The companies can then examine the documents in the Commission's file, reply in writing and request an oral hearing to present their comments on the case to representatives of the Commission and the national competition authorities.

There is no legal deadline to complete the inquiry. The duration of the investigation depends on a number of factors, including the complexity of each case, the extent to which the companies concerned co-operate with the Commission and the exercise of the rights of defence.

The obligation to notify the Commission of transactions prior to their implementation is laid out in Article 4(1) of the EU Merger Regulation. The obligation not to implement a notifiable transaction either before its notification or before it has been declared compatible with the common market is laid down in Article 7(1) of the EU Merger Regulation. The ability of the Commission to impose fines in the event of a breach of Article 4(1) or 7(1) is laid out in Article 14(2) (a) and (b) of the EU Merger Regulation.



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