The European Commission has opened a formal investigation to ascertain whether the Spanish and Portuguese telecoms incumbent operators Telefonica and Portugal Telecom have breached EU rules by agreeing not to compete with each other in their respective home markets. The agreement being investigated was signed in 2010, when Telefonica acquired sole control over their previously-held Brazilian joint venture Vivo. The Commission will also investigate whether the non-compete agreement pre-dates the Vivo deal, which is not concerned by this probe. The Commission has opened antitrust proceedings, meaning it will treat the case as a priority. The EC also plans to investigate the scope and effects of the co-operation between the parties in Spain and Portugal prior to the 2010 Vivo transaction. Telefonica and PT concluded a co-operation agreement in 1997 concerning markets outside the EU, which was notified to the Commission at the time. The Commission will seek to ascertain whether that co-operation may have included a non-compete strategy affecting EU markets, in particular Spain and Portugal, even before the non-compete clause concluded as part of the Vivo deal. There is no legal deadline to complete inquiries into anticompetitive conduct.
