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EC alleges Telefonica breached commitments it agreed to when acquiring E-Plus

The EC has sent the company a statement of objections.

Background: In July 2014, following an in-depth investigation, the European Commission approved the proposed acquisition of German mobile operator E-Plus, then owned by KPN, by the German subsidiary of Telefonica Deutschland. The approval was subject to conditions, such as MVNO access, spectrum divestiture, and the offering of wholesale 4G services at ‘best prices’.

Why a statement of objections now? The EC’s objections relate to the offering of wholesale 4G services. The Commission's preliminary view is that Telefonica did not properly implement the wholesale 4G access obligation by not including certain existing wholesale agreements in the benchmark. As a result, the ability of third parties to compete in the German mobile market was reduced.

Next steps: Telefonica now has until 5 April 2019 to respond. If the Commission concludes that Telefonica did not respect its commitment, it could impose a fine of up to 10% of Telefonica Germany's annual worldwide turnover, and/or even revoke the decision to allow the merger in the first place.