Fréget Tasso De Panafieu AARPI Olivier Fréget and Charlotte Tasso de Panafieu are proud to publish the European Union: Telecoms chapter to the 2016 edition of The European Antitrust Review. Here they discuss hot topics and developments over the past year.

1. Published by Global Competition Review
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Fréget Tasso De Panafieu AARPI
The European
Antitrust Review 2016
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2. 52 The European Antitrust Review 2016
European Union: Telecoms
From July 2014 to May 2015, the EU Commission’s main focus in
the information and communication sectors has been on mergers:
the Commission has looked over more than 30 concentrations in
this sector, while only dealing with one antitrust case concerning
Slovak Telecom, imposing a fine in October 2014 on the company
and its parent company – Deutsche Telekom – for having developed
an abusive strategy to shut out competitors from the Slovak market
for broadband services for more than five years.
The Commission’s interest in the sector thus concerned mergers
of significant operators of telecom and media markets, as well as
major structural changes in the digital music sector where the
recent acquisition of Beats by Apple led to new dynamics for the
digital industry.
Finally, the beginning of the 2015 has been quite dense from a
competition law standpoint with the issuance of a formal statement
of objections sent by the Commission to Google, the first formal
step taken against the US company in this investigation which has
been ongoing for five years.
Significant mergers in the telecom and media sectors
A wave of telecom mergers closely monitored
In line with EU Antitrust Commissioner Margrethe Vestager’s
statement according to which significant EU telecoms mergers must
not endanger ‘affordable prices for consumers’, the Commission
has closely investigated the mergers that were contemplated in the
telecoms and media sector, in particularly Orange’s acquisition of
Jazztel in Spain. This merger, together with the previous ONO’s
acquisition by Vodafone [mentioned in last year’s GCR Report],
significantly reshuffled the Spanish telecom market structure over
the past year.
Major merger case of the year: Orange’s acquisition of Jazztel
in Spain
Orange notified its intention to acquire sole control of Jazztel, a UK
telecommunication company mainly active in Spain. The amount of
the transaction was of €3.4 billion. The operation was notified to the
Commission in November 2014.
The proposed operation aimed at bringing together the third and
the fourth providers of fixed telecommunication services in Spain.
In Spain, Orange is present through its subsidiary, Orange España,
which operates mobile and fixed telecommunications networks
while Jazztel operates, through its subsidiary Jazz Telecom, a fixed
telecommunications network and offers mobile telecommunications
services on Orange’s network. The other two other major fixed
telecommunications network operators which are active nationwide
are Telefónica and Vodafone.
Although the Spanish competition authority submitted a
referral request to assess the case under Spanish competition law
in November 2014, the EU Commission decided not to refer the
notified operation to the national authority, declaring it was better
placed to deal with the case with ‘a view to ensuring consistency
in the application of the merger control rules in the fixed and
mobile telecommunications’.
On 4 December 2014, the European Commission opened an
in-depth investigation to assess whether the operation was in line
with the EU Merger Regulation. The Commission considered
that, in the retail market for fixed internet access where Orange
and Jazztel were significant competitors, it had concerns that the
proposed transaction would change the merged entity’s incentive
to exercise significant competitive pressure on the remaining two
nationwide competitors.
These concerns were reinforced when considering fixed-mobile
triple-play offers (including fixed voice, fixed internet and mobile
telecommunication services) which became the most popular
telecommunications product in Spain in 2013, thus making it likely
that only integrated providers with fixed and mobile networks
would be able to compete in this potential market.
The Commission was therefore worried that the proposed
takeover, by reducing the number of nationwide providers of fixed
telecommunications services in Spain from four to three, might lead
to a significant loss of competitive pressure for fixed internet access
services and fixed-mobile multiple-play offers, thus potentially
leading to price increase for these services for Spanish customers.
Commission’s findings later highlighted that:
• the remaining major competitors – Telefónica and Vodafone –
were unlikely to replace the competitive pressure Orange and
Jazztel formally exercised;
• new players would have faced significant difficulties to enter the
market due to the high investments needed to enter markets
involving fixed internet access services; and
• consumers would have no countervailing negotiating power to
influence contractual conditions offered by strong operators.
The Commission therefore issued a statement of objections
on 26 February 2015, leading Orange to work for several months on
a series of concessions aimed at securing EU approval for its planned
acquisition of Jazztel.
According to the Commission, ‘the issuing of a statement of
objections was not unexpected in the context of a Phase II merger
investigation and given the complexity of the Spanish telecoms
market, which is rapidly evolving into a fully convergent market
following the merger between Vodafone and ONO last year.’
In this respect, it can be noted that the EU Commission had
actually already approved in July 2014 the acquisition of the ONO
companybyVodafone,asthetwocompaniesprovidefixedandmobile
telecommunications services in Spain. The Commission stated in
that case that although Vodafone and ONO’s activities overlapped
in several markets in the fixed and mobile telecommunications
markets, the operation was not raising competitive concerns, as the
parties’ activities were largely complementary: ONO’s main activity
was related to fixed telecoms, whereas Vodafone main’s activity was
mobile telecoms.
Olivier Fréget and Charlotte Tasso de Panafieu
Fréget Tasso De Panafieu AARPI

3. TELECOMS
www.globalcompetitionreview.com 53
However, the change that occurred in the Spanish telecom
structure because of this merger clearly influenced the Commission’s
extensive analysis of the Orange/Jazztel merger to make sure effective
competition would remain possible after the transaction.
In May 2015, Orange finally gained conditional approval to buy
Jazztel, this approval depending on Orange’s implementation of a
number of commitments aiming at ensuring that a fourth nationwide
operator could enter and be able to compete effectively on the retail
markets involving fixed internet access services after the takeover.
To gain clearance, Orange agreed to divest an inde-
pendent optical fibre network covering 13 urban districts
representing 700,000 to 800,000 buildings and regarding copper,
to grant the buyer of this fibre network access not only to Jazztel’s
national ADSL network for up to eight years but also to its mobile
network, including 4G services.
Other merger cases in the telecom sector
The Orange/Jazztel merger is not the only case that has been sub-
jected to an in-depth investigation from the EU Commission this
year: the proposed joint venture between the Danish telecom opera-
tors TeliaSonera AB and Telenor ASA has also been under strict
scrutiny since April 2015.
Although both of these companies provide telecommunication
services in several European countries, the Commission’s concerns
focus on the Danish markets where TeliaSonera and Telenor both
provide fixed and mobile telecommunications services as well as
broadband and television services. The proposed venture would
therefore combine the number two and number three operators in
the mobile retail market and would reduce the number of mobile
network operators (MNOs) from four to three. The venture would
therefore be the largest operator both in terms of revenue and
number of subscribers in Denmark.
In this regard, the Commission fears the new venture would
face insufficient competitive constraint from the only two remain-
ing players on the mobile telecommunications markets, thus
potentially leading to higher prices, loss of innovative offers and
lower quality. The proposed operation would also reduce the choice
of alternative host networks and weaken the negotiating position of
MNOs. Finally, the operation would lead to a highly concentrated
market structure dominated by two large operators at the retail and
wholesale level, thus potentially leading to coordination between the
remaining ones. A decision on this case is expected by 2 September.
The European Commission has however cleared, without
resorting to an in-depth investigation, Altice’s acquisition of the
Portuguese telecommunications operator PT Portugal in April 2015,
this decision being conditional upon the divestment of Altice’s
currentPortuguesebusinessesONIandCabovisão.TheCommission
had concerns that the operation, as initially notified, would have
reduced competition in a number of telecommunications markets
in Portugal by removing a significant competitor with the risk of
leading to higher prices and less competition. However, Altice’s
commitment to divest two of its subsidiaries completely removed
the overlap between the companies’ activities in Portugal. Although
this is not a major merger, it is worth mentioning as Altice also took
over one of the mobile operators in France, SFR, a year ago.
Regarding again the mobile sector, the Commission authorised
Facebook to purchase sole control of messaging service WhatsApp
for US$19 billion in October 2014, as part of Facebook’s current
strategy to focus its business on mobile development.
The Commission decided not to oppose the transaction,
therefore following the steps of the US Federal Trade Commission
(FTC) which had previously approved the operation in April 2014.
In its assessment of the case, the Commission focused on three
major areas: consumer communications service, social networking
services and online advertising service. Regarding the first area,
the Commission considered consumers would continue to have a
wide choice of alternative communications apps after the operation.
Regarding social networking services, the Commission stated that
‘Facebook Messenger and WhatsApp are not close competitors’.
Finally, for online advertising the Commission considered there
would continue to be sufficient alternative providers for the supply
of targeted advertising.
Recent telecom mergers under the scrutiny of the Body of
European Regulators for Electronic Communications (BEREC)
The recent telecom mergers have, however, drawn concern from
BEREC. This body was established in 2009 as part of the telecom
reform package to ensure a consistent application of the EU
regulatory framework and to assist the Commission and the national
regulatory authorities in implementing this framework.
The investigation of recent mergers by the body of European
regulators was opened in May 2015 to look at how competition
regulators have assessed the operations and how the market struc-
ture has been impacted at both national and European levels. The
BEREC is especially concerned that these recent deals may have
changed market dynamics, thus reducing competition and making
telecom regulations obsolete.
These concerns radically differ from those of the Groupe Speciale
Mobile Association, an association representing the interests of
mobile operators worldwide, which recently called for the intensi-
fication of telecom mergers, stating they typically encourage invest-
ment in new-generation mobile infrastructure and delivery of mobile
broadband to rural areas and calling for competition authorities to
more readily consider the long-term benefits of mobile mergers.
Mergers in the media sector: a focus on the international cable
operator Liberty Global’s acquisitions
In February 2015, the European Commission approved Liberty
Global’s plan to acquire 50 per cent of De Vijver Media NV, a media
company based in Belgium broadcasting the channels Vier and Vijf.
The operation gave Liberty Global joint control over De Vidjer with
two existing shareholders of the targeted company.
This approval follows an in-depth investigation that started in
September 2014: since Liberty Global has a controlling stake in
the largest TV retailer in Flanders, Telenet, which also owns and
operates a cable network in Flanders and in parts of Brussels, the
Commission was actually concerned that the transaction, by creating
a close relationship between Telenet and De Vivjer, would lead De
Vivjer to refuse to license its channels to TV distributors competing
with Telenet. It was also concerned that competing TV channels
might find it more difficult to access Telenet’s cable platform or that
access conditions for these channels might significantly worsen after
the acquisition.
TheCommission’scompetitionconcernswere,however,removed
when De Vijver and Telenet signed several agreements with other
competing TV distributors during the investigation and when the
two companies agreed to take commitments, and especially to offer
under fair, reasonable and non-discriminatory terms to any inter-
ested TV distributor in Belgium to license the channels Vier and Vijf
and any new basic pay TV channel that De Vijver may launch in the
future, plus linked services. The Commission therefore approved the
modified operation.

4. EUROPEAN UNION
54 The European Antitrust Review 2016
This operation follows Liberty Global’s acquisition of Dutch
operator Ziggo, a cable TV player that also provides fixed and mobile
telecommunications services in the Netherlands. This merger was
also subjected to an in-depth investigation by the Commission, but
was approved in October 2014, subject to the acceptance of commit-
ments by the parties.
Changes in the sector of digital music
At the end of May 2015, the EU Commissioner Margrethe Vestager
announcedthatshewouldopena‘sectorinquiry’intodigitalmarkets
to analyse concerns that contractual barriers might be hindering
cross-border trade in digital content. This statement took place in a
period of significant changes for the online streaming music sector,
especially regarding the recent evolution of Apple’s music strategy to
extend its activity to streaming music services.
Apple’s acquisition of Beats Electronics and Beats Music and its
plan to launch its own music streaming platform, Apple music
Almost a year after Apple’s acquisition of Beats Electronics and
Beats Music, the company announced its wish to introduce its own
subscription streaming service, arising from a common effort by
Apple and Beats. However, this announcement has raised concerns
fortheEuropeanCommissionandAmericancompetitionregulators.
The European Commission’s approval of Apple’s acquisition of
US headphone maker and music business Beats
In July 2014, under the EU Merger Regulation, the European
Commission has cleared Apple’s acquisition of Beats Electronics –
which also sells headphones and audio speakers – and Beats Music,
a company offering a music streaming service in the United States
and Australia since 2013, therefore allowing consumers to receive
streamed music on their mobile device or computer for a monthly or
yearly fee. Apple purchased the company for $3 billion.
The Commission concluded that the combination of the two
businesses did not raise competition concerns since:
• Regarding the distribution of headphones, the combined market
share of Apple and Beats Electronics is low. Moreover, the two
companies are not close competitors because the headphones
they each sell differ markedly in functionality and design and
a large number of global competitors would still remain after
the merger.
• Regarding the distribution of digital music to consumers, the
Commission pointed out that both Apple and Beats Music are
active in this field: Apple offers a music downloading service
through iTunes and Beats Music offers a music streaming service
(although it was not, at the time of the merger, available in the
European Union). The Commission, however, concluded that
Apple faces several competitors in the European Union, such
as Spotify and Deezer: the acquisition of a smaller streaming
service not active in the EU would therefore not be likely to lead
to anti-competitive effects. The Commission also concluded that
this acquisition would not give Apple the ability and incentive
to shut out competing streaming services from access to iOS,
Apple’s operating system for mobile devices.
Apple’s Beats Music streaming plans raise concerns for the
European Commission and other regulators
Apple’s purchase of Beats has enabled the company to embrace
premium music-streaming, which constitutes a significant change
in its music strategy. After launching its own streaming video
service in partnership with HBO in March 2015, Apple is said
to be planning to unveil its own music streaming service, Apple
Music, on 8 June 2015, at the Worlwide Developers Conference in
San Francisco.
This platform, accessible from iTunes store and designed out
of Beats Music, will be a direct rival of streaming music providers
such as Spotify, the word leader in online music services, Deezer or
Google Play Music.
Apple’s ‘on-demand’ streaming music will not only provide
streaming services but also serve as social network. A crucial
difference between Apple Music and Spotify or Deezer is that, unlike
them, the user will be automatically charged a price for its services:
the fact that there will be no free version of Apple Music is a strong
selling argument for the company in the eyes of major music labels
which have been complaining availability of free music has given
consumers little reason to pay for it.
The European Commission is, however, worried that Apple will
use its enormous market share and influence to persuade music
companies to leave competitors such as Spotify. As the biggest
retailer of music, Apple is indeed a crucial marketing partner for the
music industry.
Therefore, the European Commission is currently scrutinising
the deals that Apple has made with record companies ahead of
the potential launch of its streaming platform. In April 2015, the
Commission sent short questionnaires to major record labels and
music companies to seek information on potential agreements
among themselves or with Apple over online paid streaming services.
The Commission is also looking for information on their licensing
policies on free and advertising-supported streaming services.
The European Commission is not the only one looking at
Apple’s plan to launch its own subscription streaming service. The
US Department of Justice and FTC are also asking questions about
Apple’s efforts to line up deals with major labels as it prepares to
launch Apple Music.
These regulators are said to be looking at three main issues:
• First, the question of whether or not Apple is undermining
business models based on ad-supported versions of on-demand
streaming, a business model chosen by Spotify, with music
labels, therefore restricting or even removing its free tier.
• Second concerns over exclusivity: Apple is said to be currently
negotiating with several major labels to make their new
music exclusive to its service, and therefore not available on
competitors’ platforms.
• Finally, concerns on Apple’s app store: competitors allow their
iOS users to pay for their monthly subscriptions as in-app
purchases – meaning that under Apple’s policies, the US
company takes a 30 per cent share of the payments.
In every case, Apple’s decision to launch its own streaming platform
shows that the US company is convinced of the potential for
growth of the streaming music market. This analysis is supported
by the 2015 Digital music report of the International Federation
of the Phonographic Industry, according to which digital music
revenues grew 6.9 per cent globally in 2014, powered by continued
ad-supported streaming growth – up by 38.6 per cent in 2014 – and
subscription streaming growth of 38.6 per cent in 2014.
The EU Commission’s in-depth investigation into a European
music-licensing venture between PrSfM, STIM and GEMA
The Commission’s inquiry in the online music sector also resulted in
the investigation of a music-licensing venture between three major
European collecting societies.

5. TELECOMS
www.globalcompetitionreview.com 55
In January 2015, the European Commission opened an in-depth
investigation to assess whether the proposed creation of a joint
venture between three collective rights management organisations
in the online licensing of musical works is in accordance with the
EU Merger Regulation.
The three societies – PRS for Music Limited of the United
Kingdom, GEMA of Germany and Stim of Sweden – manage the
copyrights of authors, performers and writers of musical works and
grant licences on their behalf, redistributing the royalties collected
from the exploitation of their copyrights. They also monitor and
detect unauthorised use of licences.
They notified the Commission of the planned venture for
merger approval in November 2014. The three collecting societies
aim to use the venture to:
• pool their national copyright repertoires and offer multi-
territorial licences for using them;
• provide licensing services to other publishers and societies that
hold multi-territorial European online rights; and
• combine their back-office operations, creating a single copyright
database and invoicing service.
PRS, GEMA and Stim therefore hope to create a ‘one-stop shop’,
allowing music platforms active in several member states – such as
Spotify or Deezer – to only negotiate deals with the venture rather
than striking separate deals with several national collecting societies
and publishers as well as to be granted licences valid in several
member states.
However, the Commission’s preliminary investigation pointed
out that, after the creation of the joint venture, digital service provid-
ers could only obtain these licences from the venture since the three
collecting societies would not offer multinational licences for their
repertoire individually. The combination of the music repertoires
controlled by each collecting society, currently among the most
important in the EU, could lead to increased bargaining power for
the jointure, thus enabling them to charge higher prices and to grant
worse commercial terms and conditions to digital service providers.
According to the Commission, this could in turn lead to higher
prices and less choice for European consumers of digital music.
It also highlighted that the deal might reduce competition for
‘copyright administration services provided to certain publishers’
since it would lead to the reduction of the number of meaningful
collecting societies capable of providing these services from four
to two.
After the extension of the in-depth investigation by the
Commission, the three collecting societies submitted remedies in
March 2015 aiming at ensuring that other rival societies can com-
pete and new hubs are created after the joint venture is completed.
Although the European Commission at the time of writing
had until 26 June to complete its investigation, it seems the venture
will be approved, the Commission having refrained from issuing a
formal statement of objections.
Opening of the Google antitrust investigation
On April 2015, the European Commission sent a statement of
objections to Google alleging the company has abused its dominant
position in the markets for general internet search services in the
European Economic Area by systematically favouring, since 2008,
its own comparison shopping product, Google Shopping and its
predecessor service Google Product Search, in its general search
result pages over those of its competitors. Since 2002, Google
provides comparison-shopping services allowing consumers to
search for products on online shopping websites and compare prices
between different sellers.
Given Google’s dominant position in providing general online
search services in the EU, with market shares above 90 per cent in
most member states, the Commission fears such preferential treat-
menthasanadverseimpactoncompetitionandconsumerwellbeing.
The statement of objections follows a five-year investigation
into the company, but it only concerns one of the four issues raised
by the Commission as regards as Google’s conduct (the other three
issues apparently not addressed in the statement of objections being
copying of rivals’ web content, advertising exclusivity and undue
restrictions on advertisers). The EU Commission, however, stated
it would continue to investigate other potential antitrust violations.
The Commission has, on the other hand opened, a separate
antitrust investigation into Google’s conduct regarding the Android
mobile operating system as well as applications and services for
smartphones and tablets to determine if the company has breached
EU antitrust rules. At issue are the partner agreements many smart-
phone and tablets manufacturers have entered into with Google to
install Google’s apps on their devices.
This investigation will focus mainly on:
• claims that Google requires or incentivises manufacturers
to exclusively pre-install its own search engine, apps and
other services;
• complaints that Google is hindering manufacturers from
developing and marketing modified and potentially competing
versions of Android on other devices;
• allegations that Google unfairly insists in tying or bundling
certain Google apps and services distributed on Android devices
with other Google apps, services and application programming
interfaces of Google, therefore hindering the development
and market access of rival mobile – operating systems, mobile
communication apps and services in the European Union.
This case is obviously high-profile for the EU Commission. Its
very opening has raised some voices, out of which one can mainly
identify three types of issues. First, the investigation against Google
– regularly fed by competitors’ complaints – has already lasted for
nearly five years without any formal charges from the European
Commission issued before today. The length of this investigation
could demonstrate the Commission’s difficulties to prove real anti-
competitive conducts harming consumers. Second, the US FTC did
not find sufficient strong evidence that Google used unfair and anti-
competitive tactics and Google was not fined, although it agreed
to change some of its practices to be more open to competitors in
consideration of the FTC’s investigation. Finally, it seems that the
renewed interest of the Commission for the Google case could be
tied with the change of EU Antitrust Commissioner that occurred
in November 2014, with Margrethe Vestager taking over Joaquín
Alumnia’s position, and the subsequent change of policy, giving up
the attempts of the former Commission to negotiate with Google
several times. Margrethe Vestager has also come under pressure from
the European Parliament to hasten a decision since the Parliament
passed a non-binding resolution in November 2014 calling for the
European commission to consider unbundling Google’s search from
other services as part of antitrust regulation.
In conclusion, the EU Commission seems to have taken a real
interest this past year in the European telecom companies race to
merge with these operators looking to share rising costs as revenues
decrease owing to the intensive competition of low-costs entrants
on the market. In this regard, the Commission’s new president

6. EUROPEAN UNION
56 The European Antitrust Review 2016
Jean-Claude Juncker and the digital commissioner Günther
Oettinger have both called for easing restrictions on mergers to boost
investment. However, this does not mean there is more leniency
from the Commission regarding competition rules: the European
competition authority keeps scrutinising deals in depth and often
imposes remedies to make sure competition remains effective.
These significant mergers have not yet stopped the European
Commission keeping a close eye on the evolution of the digital
music market where the potentialities for growth are significant,
as well as on internet search services sector, with formal inquiries
against Google having finally been issued.
The authors are grateful to Sarah Aït Benali for her valuable
contribution to the preparation of this article.
Olivier Fréget
Fréget Tasso De Panafieu AARPI
Widely acknowledged for his expertise and detailed understand-
ing of new technologies, Olivier Fréget’s services are in particular
demand in the fields of telecommunications, energy, the media and
pharmaceuticals. Before founding Fréget Tasso de Panafieu, Olivier
Fréget was a partner at Allen Overy LLP in Paris, in charge
of the Competition and European law department and jointly
responsible for the group’s Global Competition Law department
between 2012 and 2013. He was previously a partner in charge of
the Competition Law and European Law department at law firm
Bird Bird in Paris. He teaches competition law at Institut d’Etudes
Politiques de Paris.
Charlotte Tasso de Panafieu
Fréget Tasso De Panafieu AARPI
A specialist in French and Community competition law and
regulatory matters, Charlotte has developed in-depth expertise
in the fields of the media, telecommunications, energy and
pharmaceuticals. She is sought after for her ability to handle complex
and strategic issues, by the competition authorities and by French
and European regulatory bodies. Before establishing Freget Tasso
de Panafieu, she was a founding partner of law firm LexCase and
was responsible for the competition department. After Stibble (now
Latham Watkins) and Bird Bird, she worked as legal counsel
from American Chemical group Dupont de Nemours.
9, rue de Chaillot
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Tel: +33 1 85 08 04 01
Olivier Fréget
olivier.freget@ftdp-avocats.fr
Charlotte Tasso de Panafieu
ctp@ftdp-avocats.fr
www.ftdp-avocats.fr
The firm supports clients seeking to define and implement strategies of legal action and influence
in all areas of competition law, both national and European, before the courts, the competition
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involved in the definition of the regulatory dimension of business strategies and in assessment of
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risk management by seeking to diffuse and promote a culture of respect for and understanding of
competition on the merits. We assist them in the deployment of IT tools and operating procedures
that seek to contain the risk of employee violation of competition rules.
Areas and sectors (within competition law) of particular expertise:
• pharmaceuticals – life sciences;
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• land and air transport; and
• media (TV, radio, press).

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