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The fine is the latest in a string of sanctions Telefónica has received in relation to the merger
The Spanish National Markets and Competition regulator (CNMC) has fined Telefónica €5 million for failing to adhere to its accepted commitments related to the acquisition of broadcasting company Distribuidora de Televisión Digital (DTS) in 2015.
The deal saw Telefónica fully acquire DTS for around €725 million, a move that made the operator the largest player in the Spanish pay-TV market.
As such, Spanish regulators insisted that Telefónica make numerous commitments to preserving market competition, including maintaining DTS’s existing contracts with other communications operators and making wholesale offers of premium channels (with broadcast access to major sporting events) available to other TV operators.
However, in 2021, Telefónica and streaming service DAZN struck a deal whereby DAZN acquired the exclusive right to broadcast the 2021, 2022 and 2023 Formula 1 seasons, and allowed Telefónica to access all DAZN content.
After a CNMC investigation, the regulator ruled that that this deal breached three of Telefónica’s commitments to maintaining competition in the pay-TV market. The regulator said that the operator had failed to offer premium content to wholesale clients (instead marketing the Formula 1 exclusively via DAZN); had acquired exclusive broadcasting rights for third-party channels, despite this being prohibited; and failed to agree a wholesale pricing structure for premium channels, including Formula 1 content.
Telefónica has two months to appeal the CNMC decision.
This is not the first time that Telefónica has been fined for breaching clauses related to the DTS acquisition. In March this year, the CNMC fined the operator €6 million for having permanence clauses that prevented customers from switching providers. This was in addition to a €5 million fine handed down in September last year for a further lack of compliance with its merger commitments.
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