The European Commission has sent a Statement of Objections (SO) to Portugal Telecom and Telefonica concerning their agreement not to compete in their respective home markets.
The Commission said that its preliminary view is that “this agreement…
The European Commission has sent a Statement of Objections (SO) to Portugal Telecom and Telefonica concerning their agreement not to compete in their respective home markets.
The Commission said that its preliminary view is that “this agreement hinders competition in breach of EU antitrust rules that prohibit restrictive business practices”.
The EC added that the sending of an SO does not prejudge the final outcome of the investigation.
The agreement between Portugal Telecom and Telefonica was made in July 2010 as part of the transaction that saw Telefonica’s take over the Brazilian mobile operator Vivo for E7.5bn.
The EC started an investigation into the agreement in January 2011. It said that the two companies had repealed the agreement in February, after the Commission had already started antitrust proceedings.
But the Commission added that “this does not erase the fact that the agreement existed in [the] first place”.
“At this stage of the investigation, the Commission believes that the object of the agreement was to partition markets, resulting in potentially higher prices and less choice for consumers,” the regulator stated.
The EC added that non-compete clauses are “one of the most serious violations of fair and healthy competition”.
The two companies have two months to reply to the statement of objections.
