CNMC said it violated purchase agreement
The Spanish anti-trust watchdog CNMC imposed a €6 million fine on Spanish telco Telefónica for breaking its promise over mobile phone agreements, one of a number of commercial practices that violated the terms of its 2015 acquisition agreement for cable TV operator DTS. Examples of offending practices included permanence clauses on smart phone leases, Reuters has reported.
The regulatory agency has determined that Telefónica’s commercial offerings violated certain conditions set at the time of the company’s merger approval. Certain lease contracts associated with smart phones, for example, featured permanence clauses that limited clients’ ability to change providers.
Under the terms of the agreement, Telefónica is committed to fostering competition in the pay-TV market for at least eight years. To this end, the company has agreed not to impede customers from switching to other providers during this period. The duration of this condition was originally set at five years and extended by another three in 2020.
CNMC said clients who contracted the Movistar Fusion package from April 11, 2021 and took on a smartphone lease, were subject to permanence conditions and a penalty for early discharge over a three-year period. With these contracts, Telefónica restricted clients’ ability to contract similar services with other competing operators.