Cable and telecom group Altice and its French subsidiary SFR have been fined €80 million by the French competition watchdog for “gun-jumping” during the acquisition by Altice of SFR and Virgin Mobile France.
The Autorité de la Concurrence said that the imposition of the fine represented a first in Europe. The move relates to Altice’s acquisition of SFR and Virgin Mobile in 2014. The regulator said that Altice had “jumped the gun” on approval by collaborating ahead of receiving a final green light. It said that documents showed that Altice had exercised a controlling influence over both companies before it received regulatory permission to move forwards.
Specifically in the case of SFR, the regulator found that the participation of an arm of SFR in a public initiative to develop fibre networks in Seine-et-Marne, the sharing of mobile networks between SFR and Bouygues Telecom and pricing policies had all received approval by Altice before it was permitted to take any role.
In the case of Virgin Mobile, the Autoriité said that SFR had communicated its move to take control of the mobile player to Altice management, with Altice taking on the mantle of acquiring company in June.
SFR and Altice said they would not contest the fine. The pair maintained that the practices referred to by the Autorité were aimed at making “the new entity operational as soon as possible” after the go-ahead was secured and that they were “performed in good faith, in the midst of legal uncertainty”.
By not contesting the fine, Altice said it was demonstrating its “ eagerness to restore a constructive dialogue with the regulator” and accepted that the watchdog had now “clarified the rules” that parties to mergers must observe.
That “eagerness” to reset relations with the Autorité de la Concurrence highlights the fact that the ruling comes at a difficult time for Altice on the regulatory front.
Last month the cable and telecom group was prevented by another regulator – markets watchdog the AMF – from taking over all the shares in SFR that it did not already own on the grounds that it had provided insufficient information to shareholders.
Altice CEO Michel Combes condemned that decision in the strongest terms as “incomprehensible” and Altice followed up the rejection of its buyout by acquiring an additional 5.21% of SFR on the open market, taking its stake to 82%. It has also been reported that Altice is considering taking legal action to overturn the AMF’s ruling.
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