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The National Economic Prosecutor’s Office (FNE) filed before the Free Competition Defense Court (TDLC) an injunction against The Walt Disney Company (Disney Parent Company) and its subsidiary TWDC Enterprises 18 Corp. (TWDC) for having provided false information.
The foregoing, in the analysis procedure of the concentration operation by means of which acquired the shares of Twenty-First Century Fox, Inc. (Fox) and for failing to comply with measures adopted during the approval of that process.
The FNE concluded that “TWDC gave false information when notifying the merger with Fox in 2018”, noting that he did not have certain antecedents required by the regulations governing the procedure.
However, in later stages it became clear that the company had such information and that it should have accompanied them in its notification.
These are specifically studies, analyzes, reports or surveys that contained information related to characteristics of the market affected by the operation in Chile, required in the Notification Regulations.
Due to this, the requirement accuses that “the information provided by TWDC when notifying the Operation turned out to be materially inconsistent with actual and credible antecedents that were available to him at that time ”.
Other irregularities
On the other hand, after the approval of this concentration operation, Disney Parent failed to comply with one of the measures it offered in the procedure and to which the approval of the FNE was subject.
This consists of the sending a written communication to all pay television distributors operating in the country, informing them of the details of the mitigation measures that conditioned the approval of the business.
The purpose of this commitment was that the pay television operators were directly aware of the clauses that safeguarded their negotiating position within the framework of the approval of the merger between Disney and Fox.
However, they assure that the company did not send said communication within the stipulated time, as it recognized in the framework of the audit carried out by the FNE.
On the requirement, The Prosecutor’s Office indicates that the accused conducts are serious, which led it to request the TDLC to apply a fine of 558 UTA (US $ 439 thousand) for the Disney Parent Company and 4,754 UTA (US $ 3.7 million) for TWDC. Both sanctions total US $ 4.1 million.
“The fines requested are explained by the seriousness of violating the merger control procedure. The decisions of the FNE in this and other matters depend on receiving truthful and complete information and the effectiveness of our work rests on the measures being carried out in full and in a timely manner, ”said the National Economic Prosecutor, Ricardo Riesco.
Added that “When companies provide false information and do not comply with mitigation measures, they violate the principle of collaboration and cooperation that inspires the merger analysis system.”
In the same vein, it warned that mitigation measures are mandatory, imperative and enforceable and that “not complying with the commitments adopted in the framework of the approval of a concentration operation is serious.”
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