EC fines Altice €125 million for breaching rules before obtaining merger approvalStaff Writer | April 24, 2018
The European Commission has imposed a €124.5 million fine on Altice, the multinational cable and telecommunications company based in the Netherlands, for implementing its acquisition of the Portuguese telecommunications operator PT Portugal before notification or approval by the Commission.
Europe The standstill obligation
EU merger rules require that merging companies notify planned mergers of Union dimension for review by the Commission ("the notification requirement") and do not implement them until cleared by the Commission ("the standstill obligation").
The standstill obligation prevents the potentially irreparable negative impact of transactions on the market, pending the outcome of the Commission's investigation.
In February 2015, Altice notified the Commission of its plans to acquire PT Portugal. The transaction was conditionally cleared by the Commission on 20 April 2015, subject to the divestment of Altice's businesses in Portugal at the time, Oni and Cabovisão.
In May 2017, the Commission addressed a Statement of Objections to Altice detailing its concerns that Altice implemented its acquisition of PT Portugal before obtaining the Commission's clearance, and in some instances, even before its notification of the merger.
In today's decision the Commission confirms its preliminary view that Altice breached the EU Merger Regulation and imposes a fine of €124.5 million on Altice.
This decision has no impact on the Commission's April 2015 decision to authorise the transaction under the EU Merger Regulation.
The assessment of the Commission at the time was independent of the facts reproached by the Commission to Altice in today's decision.
According to the Merger Regulation, the Commission can impose fines of up to 10% of the aggregated turnover of companies, which intentionally or negligently breach the notification and/or the standstill obligations.
In setting the amount of a fine, the Commission takes into account the nature, the gravity and duration of the infringement, as well as any mitigating and aggravating circumstances.
Altice breached both the notification and the standstill obligations. The Commission considers that these infringements are serious because they undermine the effective functioning of the EU merger control system.
Moreover, the Commission considers that Altice was aware of its obligations under the Merger Regulation. Therefore, Altice's breach of procedural obligations was, at least, negligent.
On the basis of these factors, the Commission has concluded that an overall fine of €124 500 000 is both proportionate and deterrent. ■