Altice faces massive fine for “jumping gun” over purchase of Portugal Telecom
Telecommunications giant Altice - in hot water already over the way it has ‘restructured’ Portugal Telecom - is now facing a massive fine for jumping the gun over its 2015 purchase deal.
Reuters news agency broke the news on Wednesday, suggesting the company that frequently leaves Portuguese customers infuriated over the time it takes to respond to callouts could have to fork out as much as 2.3 billion euros.
The reason is that EU investigators are satisfied that Altice “effectively agreed” its purchase of PT “before the Commission had given its authorisation” and “even before notification” that authorisation was in the pipeline.
Dinheiro Vivo elaborates that “the deal celebrated between the two companies put Altice in a position to exercise decisive influence over PT Portugal …. and in certain cases Altice did exercise a determining influence over PT Portugal”.
Today, sources close to the company are attempting to shrug off the news, saying Brussels’ fine will be “nothing like” the €2.3 billion (cited by Reuters on the basis that the Commission “can impose fines of up to 10% of a company’s global turnover for breaching EU rules. The company posted 23.43 billion euros in revenues last year”).
Here, Dinheiro Vivo suggests Brussels may want to come down on Altice hard, in order to dissuade other companies from similar practices.
Competitions commissioner Margrethe Vestager has said that companies found to pre-empt decisions are putting the “good function of the EU’s system of control at risk”.
As DV concludes, this is not the first time Altice has had its knuckles rapped for “haste in advancing an acquisition ahead of authorisations.
“Two years ago, the French Competitions authority fined the company €80 million for having gone forwards with the purchase of SFR and Virgin Mobile without the regulator’s necessary authorisations”.
Other companies in Brussels’ bad books right include Merck, Sigma-Aldrich, General Electric and Canon. Rulings could come “in the coming months”, says Reuters, while the fine for Altice could be announced “as early as next week”.
Meantime, Altice has another significant headache here in Portugal. Market regulator Anacom is “looking into the profits of companies that constructed rural fibre optic networks with public money to see if there was over-financing.
“The profits of Fibroglobal, a company owned by Altice, are much higher than averages in the sector”, writes Público.
Areas where the company has been particularly active include the Algarve, as well as the centre of the country which last summer was devastated by fires.
Competitors NOS and Vodafone are particularly keen to see Altice come a cropper, as they claim the company has benefitted massively from constructing a kind of monopoly, but it remains to be seen what Anacom decides.