Spanish Regulator Imposes Fine on Telefónica for Rule Non-Compliance

Telefónica, the Spanish telecom giant, has been hit with a €5 million fine from the Spanish National Markets and Competition regulator (CNMC) for failing to comply with its commitments following their acquisition of the broadcasting company Distribuidora de Televisión Digital (DTS) in 2015.

According to news outlet Total Telecom, “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.”

The regulators insisted that Telefónica make numerous commitments to preserving market competition, including maintaining DTS’s existing contracts with other communications operators, making wholesale offers of premium channels with access to major sporting events, and agreeing a pricing structure for the channels—all of which it breached regulations.

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The Spanish National Markets and Competition regulator (CNMC) announced that the infractions committed included exclusive broadcasting rights for third party channels, and the failure to agree a pricing structure for premium channels including Formula 1 content. Others included the lack of wholesale offerings to other providers, as well as the deal that Telefónica and streaming service DAZN struck in 2021 to exclusively broadcast the 2021, 2022, and 2023 Formula 1 seasons with the operator gaining access to all DAZN content.

CNMC commented on the issue, “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.”

Telefónica has two months to appeal the CNMC’s decision. The company is yet to issue a response and it remains unclear whether they plan to challenge the sanction or accept it.

If the fine stands, it could set a precedent for other operators. The Spanish government’s efforts in maintaining market competition is clear, and with the hefty fine and ongoing enforcement, the importance of adhering to set regulations is apparent.

Source: Total Tele