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The Competition Authority (AdC) announced on Thursday that it had imposed a fine of 84 million euros on Meo, an Altice Portugal company, due to a cartel with Nowo. The AdC understood that Meo and Nowo combined “prices in the markets for mobile and fixed communications”.
It is a contract between Meo and Nowo, which AdC understands that it promoted a cartel activity between January and November 2018, without respecting competition in the Portuguese telecommunications market. The Competition Law prohibits agreements that significantly restrict competition, in all or part of the national market.
“This cartel concluded between Meo and Nowo implied price increases and a reduction in the quality of the services provided, as well as restrictions on the geographical availability of the same services, which penalized consumers throughout the national territory,” read in the note sent by Competition for writing.
The organization led by Margarida Matos Rosa maintains that, after the conclusion of a contract for the use of the Meo network by Nowo, which is a virtual mobile operator (MVNO), both companies “signed an anti-competitive agreement”. In the aforementioned agreement, Nowo undertook “not to launch mobile services outside the geographic areas where it provided fixed services, so it would not compete with Meo in the Lisbon and Porto areas.”
In addition, Nowo’s predisposition to “not offer mobile offers at five euros or less (or with prices lower than the prices of similar offers on the market)”, on the one hand. On the other hand, Nowo agreed to “implement price increases and reduce the quality of bundled fixed and mobile service offers.”
In return, the subsidiary of Altice Portugal, a company led by Alexandre Fonseca, committed itself, in essence, “to improve the contractual conditions of the MVNO contract signed with Nowo, especially with regard to the prices charged between the two, in the context of use of infrastructures, and resolution of operational problems in the scope of execution of said contract ”.
The AdC fine comes almost a year after the competition regulator issued a note of illegality, publicizing the accusation that fell on Meo and Nowo. A period followed in which both “had the opportunity” to argue the position of AdC. The note of illegality had been the result of the “search and seizure at the facilities” of the two companies in 2018.
In addition to imposing a fine of 84 million euros on Meo, AdC also determined, as an “accessory sanction”, that the Altice company must publish an extract of the final decision taken by the competition regulator in the II Series of the Diário da República and a national newspaper of national reach.
Nowo was exempted from any fine thanks to a “clemency request”. This request for pardon is allowed by the rules of the AdC, which provides for “a special regime for the exemption or reduction of fines in cartel proceedings” for the first company to report the existence of a cartel. “The following may benefit from a progressively lower reduction of the fine”, according to the regulations of the AdC.
The Contest also highlights that Meo and Nowo have had an MVNO contract since January 2016. The contract establishes that Nowo can provide mobile communications services throughout the national territory, through the use of part of the infrastructure that houses the Meo Network. This type of agreement has the advantage of freeing the virtual operator from network infrastructure costs, allowing it to offer services at lower prices.
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