The European Commission suspects that Telefonica has breached some of the conditions agreed for regulatory clearance of its acquisition of mobile operator E-Plus in 2014.
In particular, Telefonica had committed to allow other providers access to its mobile network, and the Commission is concerned it has not met this obligation. Specifically, the operator agreed to offer wholesale 4G services to all interested players at “best prices under benchmark conditions”.
The Commission's preliminary view is that Telefonica did not properly implement its obligations under the wholesale 4G access 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, the Commission said in a statement. As a result of Telefonica's conduct, the ability of third parties to compete in the German market for mobile communication services was reduced.
Telefonica has until 05 April to reply to the European Commission's statement of objections. The company said it is confident that it has “implemented the requirement correctly”, it said in a statement.
If the Commission concludes the company did breach to the agreement, Telefonica risks a fine to up to 10 percent of the annual revenues. The EU authority has also the option to revoke the 2014 approval for the merger.
