Commission Fines Telefónica and Portugal Telecom €79 million for Market Sharing

On Jan. 23, 2013, the European Commission imposed fines of €79 million ($105 million) on Telefónica and Portugal Telecom for agreeing not to compete with one another in the Iberian telecom markets, in breach of Article 101 of the Treaty on the Functioning of the European Union.  In July 2010, Telefónica acquired sole control over the Brazilian mobile operator, Vivo, which had previously been jointly owned by the two companies. As part of the transaction, the Spanish and Portuguese telecom incumbents entered into an agreement not to compete with one another in Spain and Portugal. The parties terminated the non-compete agreement in early February 2011 after the Commission opened antitrust proceedings. Although the Commission, in setting the level of fines, took into account the short duration of the agreement and the fact that the parties had not kept the agreement secret, the level of the fines imposed clearly reflects the gravity of the infringement. The Commission previously stated that “non-compete clauses are one of the most serious violations of fair and healthy competition.” Telefónica has indicated that it will appeal the Commission’s decision. The Commission’s press release can be found here.

Comments are closed.