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Telefónica and Portugal Telecom hit by fines
23 January 2013
European Commission fines Telefónica €66.8m and Portugal Telecom €12.2m for illegal non-compete contract clause
The European Commission has imposed fines of €66.89m on
Telefónica and of €12.29 on Portugal Telecom for
agreeing not to compete with each other in the telecoms markets
on the Iberian peninsula.
The Commission says the two companies - which are the dominant
players in Spain and Portugal respectively - agreed not to
compete with one another during 2010 negotiations for
Telefónica to buy complete control of Vivo, a Brazilian
mobile operator which had been a joint venture.
The companies terminated the non-compete agreement in early
February 2011, after the Commission opened antitrust
proceedings, says the Commission, but it believes that they
still had a deal to stay out of each other's home markets.
Joaquín Almunia, Commission vice president in charge of
competition policy, said: "The Commission is committed to
ensuring the creation of a genuine single market in the
telecoms sector. We will not tolerate anticompetitive practices
by incumbents to protect their home markets, as they harm
consumers and delay market integration."
The Commission said that the action by the two companies
hindered the integration process of the EU telecoms sector and
was in breach of article 101 of the treaty that governs the
functioning of the European Union. In setting the level of
fines, the Commission took into account the four months
duration of the infringement and the fact that the agreement
was not kept secret by the parties. The early termination of
the agreement was also taken into account by the Commission as
a mitigating circumstance.
The Commission has warned that any person or firm affected by
anti-competitive behaviour may seek damages in national courts.
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