On 24 April 2018, the European Commission fined Altice, a Dutch-based telecom operator, € 125 million for procedural infringements of the EU Merger Regulation.
By way of background, on 9 December 2014, Altice entered into an agreement to acquire sole control of PT Portugal. Altice notified the Commission of its plan to acquire PT Portugal in February 2015. The transaction was cleared subject to conditions on 20 April 2015. Later, the Commission alleged that Altice had breached EU rules through implementation of its acquisition of PT Portugal before notification or approval by the Commission (see VBB on Competition Law, Volume 2017, No. 5, available at www.vbb.com). Such conduct is commonly referred to as "gun jumping".
The Commission found that Altice infringed both the prior notification obligation of a concentration under Article 4(1) of the EU Merger Regulation, and the standstill obligation under Article 7(1) of the EU Merger Regulation. First, the transaction agreement provided Altice with the legal right to exercise decisive influence over PT Portugal by granting Altice veto rights over decisions concerning PT Portugal's ordinary business. Second, Altice actually exercised decisive influence over aspects of PT Portugal's business by giving PT Portugal instructions on how to carry out a marketing campaign and by seeking and receiving detailed commercially sensitive information about PT Portugal outside the framework of any confidentiality agreement. The Commission considered that Altice's breach of its procedural obligations was, at least, negligent.
The Commission's fining decision has no impact on its April 2015 conditional clearance of the Altice/PT Portugal transaction. However, the case demonstrates the seriousness with which the Commission regards procedural violations of the EU Merger Regulation and is notable for two reasons. First, it is the highest ever fine imposed by the Commission for procedural infringements of the EU Merger Regulation, being larger than the previous highest fine of € 110 million fine imposed on Facebook in May 2017 for providing misleading information to the Commission. Further, this is the first case in which a company has been fined, in part, for a breach of the standstill obligation that did not result purely from a failure to notify but also from sharing commercially sensitive information. Previously, the Commission imposed fines for breach of the standstill obligation in Marine Harvest where the breach arose when the parties failed to notify the transaction. Finally, Altice has publicly announced that it intends to appeal against the fine.
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