The European Commission has imposed a €124.5 million fine on Altice, the multinational cable and telecommunications company based in the Netherlands, for implementing its acquisition of the Portuguese telecommunications operator 'PT Portugal' before notification or approval by the Commission.
Margrethe Vestager, the commissioner in charge of competition policy, said: "Companies that jump the gun and implement mergers before notification or clearance undermine the effectiveness of our merger control system. This is the system that protects European consumers from any merger that would lead to higher prices or reduced choice. The fine imposed by the Commission on Altice today reflects the seriousness of the infringement and should deter other firms from breaking EU merger control rules".
In February 2015, Altice notified the Commission of its plans to acquire PT Portugal. The transaction was conditionally cleared by the Commission on 20 April 2015, subject to the divestment of Altice's businesses in Portugal at the time, Oni and Cabovisão.
In May 2017, the Commission addressed a Statement of Objections to Altice detailing its concerns that Altice implemented its acquisition of PT Portugal before obtaining the Commission's clearance, and in some instances, even before its notification of the merger. The 's Commission's decision confirms its preliminary view that Altice breached the EU Merger Regulation and imposes a fine of €124.5 million on Altice.
In particular, the Commission has concluded that:
certain provisions of the purchase agreement resulted in Altice acquiring the legal right to exercise decisive influence over PT Portugal, for example by granting Altice veto rights over decisions concerning PT Portugal's ordinary business;
in certain cases, Altice actually exercised decisive influence over aspects of PT Portugal's business, for example by giving PT Portugal instructions on how to carry out a marketing campaign and by seeking and receiving detailed commercially sensitive information about PT Portugal outside the framework of any confidentiality agreement.
According to the Merger Regulation, the Commission can impose fines of up to 10% of the aggregated turnover of companies, which intentionally or negligently breach the notification and/or the standstill obligations.
In setting the amount of a fine, the Commission takes into account the nature, the gravity and duration of the infringement, as well as any mitigating and aggravating circumstances.
The Commission concluded that an overall fine of €124,500,000 is proportionate and a deterrent.
Altice rejects the Commission's findings and says that it will appeal against the fine.
"Altice fully disagrees with the Commission's decision… Further, Altice considers that the elements in the Commission's file do not establish the exercise of influence, as alleged by the Commission, by Altice over PT Portugal's business conduct neither prior to the merger notification to the Commission nor prior to the Commission's clearance. Besides, Altice's right to a due process was violated in several respects during the Commission's proceedings, in particular related to the investigation conducted by the Commission," Altice said in a strongly worded statement to the press.
Altice also warned that the decision could have "serious consequences for European companies" by setting a precedent, which would "impact on all future M&A transactions in Europe and, consequently, on the EU economy."
