EU fines Spain's Telefonica, Portugal Telecom €79m for non-compete pact

Spain carrier Telefonica and Portugal Telecom are fined €79m for a non-compete pact that lasted three months.
Written by Liam Tung, Contributing Writer

The two largest telecommunications firms in Spain and Portugal--Telefonica and Portugal Telecom--have been fined 79 million euros for agreeing to steer clear of each other's home markets.

Europe's antitrust commission fined Telefonica 66.9 million euros and Portugal Telecom 12.3 million euros over the pact, it said in a statement on Wednesday.

The pair had included a temporary non-compete clause during 2010 negotiations over Telefonica's purchase of Portugal Telecom's stake in the jointly owned Brazilian mobile operator Vivo. The Spanish operator ended up paying 7.5 billion euros in the deal that year.

The agreement was in place between September 2010 and February 2011, shortly after the commission opened its investigation. The deal was meant to last until at the end of 2011.

The non-compete agreement flouted European competition rules and hindered EU efforts to integrate its already highly fragmented telecoms sector, according to the EC.

"The commission is committed to ensuring the creation of a genuine single market in the telecoms sector. We will not tolerate anti-competitive practices by incumbents to protect their home markets, as they harm consumers and delay market integration," said the commission's VP in charge of competition policy Joaquín Almunia.

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