Europe has a go at fining Altice for breaking merger rules

The European Commission has cast a suspicious eye over Altice, as it begins an investigation as to whether it began the takeover process of PT Portugal prior to receiving approval from the overseer.

The Commission (hereafter known as the Gaggle of Red-tapers) has accused Altice of putting itself into a position to influence the strategy of the Portuguese telco prior to antitrust authorities giving the go-ahead for the deal. Altice informed the Gaggle of its intentions to acquire PT Portugal in February 2015, before the transaction was given the green light on 20 April 2015.

“If companies jump the gun by implementing mergers prior to notification or clearance, they undermine the effective functioning of the EU merger control system,” said chief Gaggler, Commissioner Margrethe Vestager, in customary self-righteous form.

“The Statement of Objections sent to Altice shows how seriously the Commission takes breaches of the rules designed to protect the merger control system.”

Altice reached a €7.4 billion deal with Oi to buy its Portuguese assets in late 2014, though it took a number of months for the deal to be cleared. Merger Regulation at the boresome bureaucrat stipulates that the buyer should not implement transactions unless and until they have been notified and cleared by the watchdog. In other words, you can’t do anything unless we’ve given the green light.

Should the uninteresting overseer find Altice has flaunted the rules, there might be tears. It could impose a fine of up to 10% of Altice’s annual worldwide turnover. While we do have some sympathy for Altice (assuming it did try to influence the strategy of PT Portugal), as waiting for the Gaggle of Red-tapers to actually do something is like waiting for summer to arrive in the UK, but you can actually see the logic.

The merger rules are in place to ensure the continuation of healthy competition in the market. The Gaggle did block the merger of Three and EE in the UK, so it does not have a completely toothless bite; if Altice did influence the company without 100% certainty it would be acquiring it, it creates a very dodgy situation.

“Altice does not agree with the European Commission’s preliminary conclusions, and will submit a full response to the statement of objections and contest all the objections,” Altice said in a statement.

One might also ask whether the Gaggle of Red-tapers is suffering from a bit of inferiority complex currently, as it throws its weight around. Aside from this investigation, it has also fined Facebook for providing misleading information in its $19 billion acquisition of WhatsApp. In both cases, the Gaggle has stated the activities no ‘no impact’ on the decisions to grant the acquisitions, but it still feels the need to huff and puff.

Some might get the impression that commercial entities have very little respect for the boresome bureaucrat, and this is an opportunity for the Gaggle to demonstrate that rules are rules. They do have a point, but they are ever so tiresome.