The Council of the Spanish Competition Commission (“NCC”) imposed a EUR 61,600 fine on Orange (France Telecom España, S.A.U.) for the execution of the acquisition of Simyo before being notified to and authorised by the NCC. Contrary to what was argued by Orange, the NCC considered that the concentration triggered both the turnover and the market share notification thresholds.
Firstly, Orange alleged that the turnover of the brand “Ortel” (property of Ortel Mobile España, S.L., a wholly owned subsidiary of Simyo) should not be taken into account for the calculation of the turnover of the target, since this company had been sold before the transaction.
Nevertheless, since Ortel was not a fully operative undertaking at the time the transaction was completed, the contracts with Ortel’s end customers were managed and served by Simyo. The NCC stated that, despite customers being served under the “Ortel” brand, the contracts were signed on behalf of Simyo, therefore the corresponding invoices should be allocated to Simyo. In addition, the NCC confirmed that there is no certainty about the subsequent transfer of these customers to Ortel. In conclusion, in the NCC’s view, the transaction exceeded the turnover threshold.
As regards the market share threshold, the NCC affirmed that Orange acquired a 100% share in the call termination and short message wholesale market in Simyo’s network. The NCC not only referred to the numerous precedents on competition grounds, but also to the market definition of the Telecommunications Market Commission.
The Council of the NCC stated that there were no reasonable doubts regarding market definition and that Orange did not provide an alternative definition or an economic analysis that may have differed from the precedents.
Finally, the Council’s Resolution determined that Orange is responsible, at least due to negligence, because on the basis of its position and experience in the market, it could not ignore that the notification was compulsory. However, in order to calculate the fine, the NCC took into consideration Orange’s willingness to cooperate during the investigation and the fact that it notified the transaction voluntarily shortly after its completion. As a result, the fine imposed was set at 0.1% of the total turnover of the acquired business.