(TendersInfo (India) Via Acquire Media NewsEdge) The European Commission has imposed an overall penalty of EUR 79 million on Portugal Telecom and Telefonica after the telecom companies opted for non-competition agreement.
With this, the Spanish operator Telefonica and Portugal Telecom, the largest telecommunications service provider in Portugal, will have to shell out EUR 66.9 million and EUR 12.3 million respectively.
The EC has stated that the non-competition clause, which had validity between from September 2010 and February 2011, was opposing to the EU regulation, and stressed that it will never accept any anti-competitive moves by the incumbent operators.
The telecom service providers have also decided to refrain from racing against one another in Spain and Portugal while they settled the agreement in 2010 for Telefonica to acquire 100% control of Vivo, the Brazil-based joint venture of the two firms. The EC has added that the non-competition deal was finished in 2011 while the EU launched its anti-trust inquiry.
The Spanish operator has revealed that it has strategy to challenge the EU order to the European Court of Justice, because "it has not, at any time, breached the law". Telefonica has stated that the controversial competition clause had gone through a compliance review, and it was removed from the agreement while it was found that it lacked legal applicability. Moreover, the agreement was presented to the regulatory authorities then and "did not alter in any way the development of the market", added the Spanish telecom company.
Issuing an analogous statement, Portugal Telecom has stated that the penalty was "unjustified" and it will also mull over taking legal action against the verdict.
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