EC alleges Telefonica breached commitments for E-Plus acquisition

25 Feb 2019

The EC has sent a ‘Statement of Objections’ to Telefonica Deutschland alleging the company breached commitments it offered to secure approval for its acquisition of E-Plus in 2014. Following an in-depth investigation, on 2 July 2014 Brussels cleared the acquisition of E-Plus, the German mobile business of Dutch telecoms operator KPN, by Telefonica Deutschland. Approval was given subject to full compliance with commitments submitted by Telefonica to ensure that new competitors would be able to enter the market and that the position of existing competitors would be strengthened.

The Statement of Objections relates to Telefonica’s obligation to offer wholesale 4G services to all interested players at ‘best prices under benchmark conditions’. The EC’s preliminary view is that the firm did not properly implement this obligation by not including certain existing wholesale agreements in the benchmark. Had Telefonica included such additional agreements, third parties would have benefited from more advantageous 4G wholesale access conditions, and as a result, the ability of third parties to compete in the market was reduced.

Telefonica now has until 5 April to respond to the Statement of Objections; if Brussels concludes that the firm did not respect the commitment, it could impose a fine of up to 10% of Telefonica Deutschland’s annual turnover and/or revoke the decision.

Germany, Telefonica Deutschland Holding