The French Competition Authority fines 15 million euros Altice/Numericable group for non-compliance with some of the commitments related to the acquisition of SFR

By a decision of April 19th, 2016, the French Competition Authority sentenced Altice/Numericable group to pay a fine of 15 million euros for non-compliance with some of the commitments taken at the time of the acquisition of SFR regarding the divestiture of Outremer Telecom’s mobile phone business in La Réunion and Mayotte.

To prevent that new stakeholder represents 66% of market shares in La Réunion and 90% in Mayotte, the Authority had authorized on October 27th, 2014 the exclusive acquisition of SFR provided Altice/Numericable group’s commitment to divest Telecom’s mobile business in this region and to “maintain the viability, market value and competitiveness of this business until the divestiture”.

However, Altice/Numericable group changed its commercial strategy by significantly increasing the mobile phone subscription prices of Outremer Telecom (between 17% and 60%) at the time of the transfer of the business to the buyer.

These price increases, which have not been notified to the Authority, “put the competitiveness of Outremer Telecom’s offer at considerable risk, by giving customers the opportunity to terminate their current subscription without any charge at the time when competitors had just repositioned their pricing to a lower level”.

This new strategy had a negative impact on Outremer Telecom’s image. This is why the Authority, on its own initiative, considered Altice/Numericable group “ignored the basic obligations aimed at ensuring the effectiveness of the commitment to divest Outremer Telecom’s mobile telephony” which were essential for maintaining competition.

Therefore, the Authority fined 15 million euros Altice/Numericable group.

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