Pharol, Spain’s Telefonica see fines upheld for breaking EU competition rules

  • Lusa
  • 25 January 2022

The EU has fined Pharol and Telefónica again for entering into a non-competition agreement after the sale of Vivo to the latter.

The European Commission has fined Pharol (formerly Portugal Telecom) and Spain’s Telefónica again for entering into a non-competition agreement after the sale of Vivo to the latter, in breach of the European Union (EU) competition rules.

The decision to fine Pharol €12.146 million and Spain’s Telefónica €66.894 million was adopted on Tuesday because the telecoms companies agreed not to compete with each other in the Iberian telecoms markets following the sale of Brazil’s Vivo (in Brazil) to the Spanish.

Today’s decision takes full account of the General Court judgment and excludes services from the value of sales for which insurmountable barriers to entry were encountered and for which the parties were not in potential competition with each other during the period of application of the non-competition clause, says the European Commission in a press release.

A first similar decision had been adopted by the EU executive in 2013, but the fine was annulled by the EU Court of Justice in 2017, confirming a General Court ruling, which held that the Commission should have examined the parties’ arguments that there was no potential competition between them in certain markets and that these markets should have been excluded from the value of sales on the basis of which the fines were calculated.