On 6 March 2008, the acquisition of Scarlet by Belgacom was notified to the Auditorat of the Belgian Competition Council.
The concentration concerns a share purchase agreement where Belgacom would acquire 100% of Scarlet shares and would therefore have sole control over this company.
Belgacom and its subsidiaries are suppliers of several telecommunication services, in particular in Belgium, and offer products and solutions through their brands: Belgacom, Proximus, Telindus/Belgacom ICT, WIN and Skynet. The Belgacom group is active in five markets: fix lines services (FLS), mobile communication services (MCS), international carrier services (ICS), internet services and television. Scarlet is a Dutch telecommunication company that supplies most of the services provided by Belgacom, in Belgium as well as the Netherlands.
In his report, the Auditor came to the conclusion that this concentration raises serious doubts and could result in a significant obstacle to effective competition being created in the Belgian market for fixed lines, mobile services, internet services, television services, data communication services, international carrier services and IT services.
The Competition Council followed the conclusion of the Auditor and found that there would be significant horizontal overlaps, which would result in a combined market share of more than 50 percent in the following markets: fixed lines (national and international services) and broadband internet. Moreover, as Belgacom is present on the television market, the Competition Council also found that the ability and incentive for Belgacom to exclude competitors through triple play (telephone, internet and television) and quadruple play (telephone, fixed and mobile internet, television) should be further investigated. Finally, there were vertical overlaps between the retail leased lines market and wholesale leased lines market. As Scarlet is the owner of communication infrastructure (lines), the Competition Council found that there was a risk that Scarlet would foreclose access to its lines to the competitors of Belgacom which are active on the retail leased lines market.
In order to remedy these competition concerns, Belgacom already took the opportunity to propose commitments during the first phase investigation. These commitments were submitted to a market test and considered insufficient by both the Auditor and the Competition Council. For all the above reasons, the Competition Council decided to initiate a second phase proceeding. The date of the final decision is not clear yet.