The Comisión Nacional de los Mercados y la Competencia (CNMC) has opened yet another sanctioning file against Telefónica de España related to the controversial acquisition of DTS (formerly Sogecable) in 2015. This latest investigation highlights alleged violations concerning the permanence contracts associated with pay television services, which the CNMC had explicitly prohibited as part of the conditions for approving the acquisition.
Telefónica's compliance with these commitments is now under scrutiny, as the CNMC investigates whether the company has maintained conditions that infringe upon the commitments it made during the purchase of DTS. The CNMC had previously authorized this acquisition on the condition that Telefónica would not impose permanence obligations on its customers related to pay television services, either directly or indirectly.
According to sources from the telecommunications giant, "Telefónica has rigorously complied with the commitments acquired." However, the CNMC's findings suggest otherwise, particularly regarding the Fusión+Smartphone offer. In July 2021, the CNMC determined that this offer, which included the rental of a smartphone subject to a 36-month permanence condition, violated the commitments set forth during the acquisition process.
The CNMC's investigation is not an isolated incident; it marks the seventh procedure initiated against Telefónica concerning the Sogecable acquisition. The current scrutiny revolves around the commercial policies of Telefónica's Fusión and miMovistar packages, which were in effect between August 30, 2021, and April 30, 2023. During this period, the CNMC alleges that Telefónica included conditions that hindered customer mobility, thereby restricting competition in the market.
In March 2023, the CNMC imposed a fine of 6 million euros on Telefónica for failing to comply with the commitment not to include permanence obligations. This fine was a direct result of the earlier violations linked to the Fusión+Smartphone package. The CNMC had also noted that Telefónica's commercial practices continued to obstruct customer freedom to switch providers, a key factor in maintaining healthy competition.
The regulatory body has now opened a maximum three-month period for the instruction of this latest sanctioning file, during which it will determine whether to propose further sanctions against Telefónica. This ongoing conflict underscores the long-standing tensions between the CNMC and Telefónica regarding the latter's compliance with the conditions attached to the acquisition of Sogecable.
Historically, Telefónica has faced multiple penalties from the CNMC since the acquisition of DTS. The first fine was issued in 2019, amounting to 1.5 million euros, due to improper cost allocations related to the Movistar Partidazo channel, which adversely affected competitors like Vodafone and Orange. Following this, the CNMC imposed additional fines: 5 million euros in 2022 for failing to adequately communicate its offer of premium channels, and several more in 2023, including the aforementioned 6 million euros for applying permanence clauses to its television services.
Despite these sanctions, the financial impact on Telefónica has been relatively limited. The 6 million euro penalty in 2023 represented just 0.015% of the company's global turnover for the previous year, which was nearly 40 billion euros. Under the Law of Defense of Competition, the CNMC has the authority to impose fines of up to 10% of a company's annual revenue for severe violations, which in Telefónica's case could theoretically amount to 4 billion euros. However, such substantial fines have yet to be realized.
This latest chapter in the Telefónica-CNMC saga highlights the ongoing challenges within the telecommunications market in Spain, particularly regarding competition and consumer rights. As the CNMC continues to monitor Telefónica's compliance with its commitments, the outcome of this investigation could have significant implications for both the company and the broader market.
In conclusion, the CNMC's renewed scrutiny of Telefónica's practices reflects a persistent effort to ensure compliance with competitive market regulations. The outcome of this investigation will be crucial in determining the future landscape of pay television services in Spain and whether Telefónica can maintain its market position without infringing upon the rights of consumers.
