Commission fines Altice Group €125.5M for early implementation of its proposed acquisition of PT Portugal

Published on 23rd May 2018

In an important reminder of the importance of receiving merger control clearance before implementing transactions, the European Commission has announced that it is to impose a €125.5M fine on the Netherlands-based Altice Group for taking steps to effectively implement its proposed acquisition of Portuguese telecommunications operator PT Portugal prior to the transaction receiving official Commission approval.


All transactions falling within the remit of the EU Merger Regulation must be notified to the Commission and cleared before implementation.

Altice entered into an agreement to acquire sole control of PT Portugal in December 2014, notifying the transaction to the Commission in February 2015. The Commission approved the transaction, subject to the condition that Altice divest itself of its Portuguese telecommunications subsidiaries ONI and Cabovisao (competitors of PT Portugal in the Portuguese telecommunications services market) before implementation.

Early implementation: Commission investigation

However, the Commission became aware (via a newspaper report) that Altice had been taking steps to effectively implement the transaction prior even to its notification to the Commission.

On investigation, it became clear that Altice had acquired legal rights to exercise decisive influence over PT Portugal via provisions in the purchase agreement that granted Altice veto rights over aspects of PT Portugal's ordinary business.

The Commission also found that Altice had given instructions to PT Portugal on how to carry out a marketing campaign, and had both sought and received commercially sensitive information about PT Portugal with no confidentiality safeguards in place.

Commission decision

The Commission decided Altice had breached both its obligation to notify and its standstill obligation, actions that threatened to "undermine the effective functioning of the EU Merger Control System". Given the seriousness of the breach, the Commission fined Altice €125.5M, as a proportionate fine and a deterrent to others.


The level of the fine levied on Altice is notable in its severity, but some degree of fine is not uncommon in cases of early implementation, for companies subject to the jurisdiction of any of the European competition authorities, who are particularly vigilant in enforcing such cases.

In April 2018, for example, in another case of early implementation, the Austrian Cartel Court, at the request of the French Competition Authority, imposed a fine of €185,000 on Stahl Lux 2 S.A. In another case earlier this year, the same court imposed a fine of €40,000 on Comparex AG. Altice itself is no stranger to fines of this kind, having received a fine of €80m for illegal gun-jumping from the French Competition Authority in 2016.

The fines highlight the real risks for merging entities that take any action prior to notification or approval that may be considered "gun jumping". In Altice's case, the Commission began its investigation after local newspapers reported that Altice executives had visited the offices of PT Portugal. Marguerete Vestager, Commissioner of the EU Commission, recently remarked: "we wanted to know, were those contacts innocent, or did they mean Altice and PT Portugal had crossed the line in terms of what is allowed before we approve a merger?"

That "line" is not clearly defined, and has been a subject of debate, leading to some uncertainty for merging entities about what is and what is not acceptable. However, the potential consequences of taking any action towards a target entity prior to approval are so severe that any move must be carefully weighed against the risk of a potentially severe financial hit (and associated publicity), no matter how innocuous (or commercially desirable) it may appear at the time.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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