Chillin'Competition

Relaxing whilst doing Competition Law is not an Oxymoron

Chillingleaks: European Commission investigates Telefónica and PT

with 3 comments

It appears that DG Comp has initiated a formal investigation in relation to a possible non-compete agreement between Telefónica and Portugal Telecom. The two companies have now unofficially confirmed this news, which could become public in the next few hours.

People involved in the case have  indicated that the agreement could have been entered into last July, at the time Telefónica bought PT´s shares in Vivo (a reminder: the Portuguese government had opposed this acquisition by virtue of its “golden share” in PT. Although the ECJ recently declared that the existence of such “shares” infringes the Treaty provisions on freedom of establishement, the golden share on PT  is still there).  The agreement  is suspected to have consisted of a commitment not to compete in each other´s “home” market  until December 2011.

Similar “ancillary restrictions” have also been subject to recent investigations by the Commission.

Written by Alfonso Lamadrid

24 January 2011 at 9:51 am

3 Responses

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  1. Dear Alfonso
    Why do you think the Commission is looking at this case instead of National Competition Authorities? In particular in light of p. 12 of Commissions Guidelines on cooperation between the ERN? thks!

    anonimous

    26 January 2011 at 12:29 pm

  2. Dear Anonymous:

    Great observation and great question. Para. 12 of the guidelines would appear to have been written with exactly this case in mind!

    If what I hear is correct (and the sources are quite reliable), the CNC -in agreement with the Portuguese authority- transferred this matter to the Commission from the very beginning of the investigation. They probably thought that the Commission could handle it better or that their intervention could help ensuring greater deterrence for future similar cases.

    As you know 😉 cooperation between competition authorities (and coordination over who gets to do what) doesn´t always work in practice as smoothly as theory dictates.

    I´ve the impression that cooperation in the framework of the ECN during the investigation phase in practice tends to consist (almost exclusively?) in providing assistance in the course of dawn raids..

    Alfonso Lamadrid

    27 January 2011 at 11:46 am


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