On Friday, the Spanish antitrust watchdog imposed a 6-million-euro fine on Telefonica for participating in commercial practices that violated the terms of its 2015 acquisition agreement for cable TV operator DTS. Examples of offending practices included permanence clauses on smart phone leases, Reuters reported.
The CNMC, the regulatory agency for such matters, has determined that Telefonica’s commercial offerings violated certain conditions set at the time of the company’s merger approval. For example, certain lease contracts associated with smart phones featured permanence clauses that limited clients’ ability to change providers.
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Telefonica is committed to fostering competition in the pay-TV market for at least eight years. To this end, the company has agreed not to impede customers from switching to other providers during this period. The duration of this condition was originally set at five years and extended by another three in 2020.
CNMC said clients who contracted the Movistar Fusion package from April 11, 2021 and took on a smartphone lease, were subject to permanence conditions and a penalty for early discharge over a three-year period. With these contracts, Telefonica restricted clients’ ability to contract similar services with other competing operators.
