On 21 November 2008, in the case of the merger operation consisting of the acquisition by CATVP – TV Cabo Portugal SA (henceforth “TV CABO”) of exclusive control of TVTel – Comunicações SA (“TVTel”), the Competition Authority (“CA”) delivered a ruling of non-opposition, accompanied by the imposition of conditions and obligations aimed at maintaining effective competition in the pay-TV market, under the terms and for the purposes of Article 35 (1) b) and (3) of Law No. 18/2003 of 11 June (the “Competition Act”).
The analysis of this operation from a competition law perspective involved the following Relevant Markets: (i) the national markets for the provision of telephone services in fixed places; (ii) the national market for the provision of broadband Internet services; (iii) the wholesale Internet connectivity market, on a broader geographical scale than the national territory; and (iv) the sub-national retail pay-TV market. The following were also analysed as Related Markets: (i) the national market for television broadcasting rights covering premium sports content; (ii) the national market for television broadcasting rights covering premium movie content; (iii) the national market for premium sports channels; and (iv) the national market for premium movie channels. The CA concluded from the analysis carried out that, as initially notified, the present merger operation would result in the creation or strengthening of the notifying party's dominant position in the retail pay-TV markets at the sub-national level. In the light of the competition-law problems identified, the notifying party submitted a set of commitments for the CA's appraisal, with a view to providing a solution to these issues. On 19 September 2008, the CA initiated the Consultation Phase for Interested Parties. The following entities were consulted: Portugal Telecom SGPS SA; Cabovisão – Televisão por Cabo SA; Vodafone Portugal, Comunicações Pessoais, SA; and Sonaecom SGPS SA. After the Consultation Phase for Interested Parties was concluded, the notifying party submitted a new version of its commitments, with the intention of allaying the concerns expressed by the entities consulted. These were considered of an appropriate and sufficient nature to remove the competition-law concerns identified. Considering the alterations presented, the Competition Authority opened a new Consultation Phase for Interested Parties on 4 November 2008, in compliance with Article 38 of the Competition Act.
The decision adopted is subject to a series of conditions/obligations aimed at maintaining effective competition. They are summarised as follows:
In addition, these conditions include a monitoring obligation, either on the part of the CA or a third party that is independent of the participating undertakings and has been appointed for the purpose.
The CA concluded that the commitments undertaken by TV Cabo were of an appropriate and sufficient nature to guarantee that the operation notified was not liable to create or strengthen a dominant position that could result in significant barriers to effective competition in the markets considered. The first and third commitments offered by TV Cabo – promotion of the entry of a competitor into cable TV distribution and the supply of nationwide wholesale satellite television, respectively – aim not only to create conditions of contestability with regard to the two main platforms for the provision of pay-TV services – cable and satellite – but also to guarantee, with the necessary degree of certainty, the entry of a new operator (or expansion of a competitor) offering services in the relevant geographical markets through at least one of the platforms mentioned above. In relation to the second commitment – the release of space in network infrastructures – the CA considered that this was likely to diminish important barriers to expansion in the pay-TV market, as it applies to all infrastructures where the TV Cabo and TVTel networks overlap.