Altice to appeal EC ‘gun-jumping’ fine on Portuguese acquisition

Altice has said it will appeal a decision by the European Commission to fine it €124.5 million for ‘gun jumping’ the regulatory green light to acquire PT Telecom in Portugal in June 2015.

The EC ruled that Altice infringed the ‘prior notification obligation’ relating to mergers and acquisitions. The Commission said that Altice had made certain provisions in its purchase agreement for the Portuguese operator that resulted in it acquiring the legal right to exercise decisive influence over PT Portugal, for example by granting Altice veto rights over decisions concerning PT Portugal’s ordinary business. It also found that Altice had exercised influence over parts of PT Portugal’s business, for example by iving 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.

Commissioner Margrethe Vestager, in charge of competition policy, said: “Companies that jump the gun and implement mergers before notification or clearance undermine the effectiveness of our merger control system. This is the system that protects European consumers from any merger that would lead to higher prices or reduced choice. The fine imposed by the Commission on Altice today reflects the seriousness of the infringement and should deter other firms from breaking EU merger control rules.”

In setting out the reasons for its decision to appeal to the EU General Court, Altice said that the PT Telecom case differed substantially from previous ‘gun jumping’ sanctions imposed by France’s competition watchdog relating to its acquisition of SFR and Virgin Mobile France.

“Altice fully disagrees with the Commission’s decision, and in particular, it considers that this case differs entirely from the French Numéricable/SFR/Virgin gun jumping case, in which Altice had agreed not to challenge the allegations brought against it. In Altice’s opinion, the transaction agreement governing the management of the target during the pre-closing period provided Altice with a consultation right on certain exceptional matters relating to PT Portugal, and was in accordance with well-established M&A market practice,” the company said.

Altice also said that the EC’s file on the case failed to establish that Altice had exercised influence over PT Portugal’s business before its merger notification to the Commission or ahead of receiving the green light.

Altice said that the EC’s ruling “would have serious consequences for European companies” and set a precedent that would “have an impact on all future M&A transactions in Europe and consequently on the EU economy” if it went unchallenged.